Today, upgrades begin across UK retailers and vending machines to raise the contactless card payment limit to £20 from £15. The cards, of which there are 23 million in the UK, give customers a fast and easy-to-use alternative to cash when making low-value payments in participating stores, and at vending machines, festivals and other events. Contactless enables customers to pay simply by holding their card up to a reader for low value transactions rather than tapping in their PIN.

This is the second time the contactless transaction limit has been increased – it was first raised from £10 to £15 in 2010. Over 17.7 billion of all consumer cash payments are for amounts under £20 – with a majority of these being for purchasing groceries, followed by payments made for dining out. This latest rise should broaden the appeal of contactless, increasing the situations where using the technology is of benefit – for example, making it possible to pay for a small basket of shopping in a supermarket rather than just for sandwiches or coffees.

Fifty national retailers now use the system in their stores, including Greggs, Boots and McDonald's.

The limit increase comes shortly before the Post Office starts to add the contactless payment terminals to all of its 11,500 branches.

More banks add contactless technology to their cards
HSBC recently announced plans to follow Barclays Bank by embedding contactless technology as a standard feature on all new debit cards in circulation. Other banks are following suit. According to VISA, the number of contactless cards in UK will rise to 30 million by the year end.

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There are now 42m payment cards in the UK, so by year end 75% of these will have embedded contactless technology. The problem is that most of the UK cardholders are not willing to try 'contactless transactions'. The banks and the card companies have much to do to change their behaviour. It is nowhere near being essential for your POS terminals to be contactless enabled.