Do contactless payments encourage excessive spending?

With the contactless payment limit set to rise to £30 in the UK, will the increase encourage reckless spending?

Do contactless payments encourage excessive spending?

It appears that we are progressively moving towards a cashless society. Digital payments have grown exponentially over the last few years through mediums such as online payments, mobile NFC and digital wallets. Contactless payments certainly make the purchase of goods quicker and easier. However, outgoings can be harder to keep track off without physical cash and the grim reality of a lighter wallet.

Contactless Convenience

UK spending using contactless cards trebled in 2014. £2.32bn ($3.57bn) was spent by tapping on a reader. The UK Cards Association said that there was a 255% increase on the previous year’s figure of £653m, with the average transaction being £8.26 in December.

The current contactless payment cap stands at £20. However, the UK Cards Association said that the average UK credit and debit card spend in a supermarket is worth just over £25. Raising the payment limit to £30 would allow for the most common consumer transactions.

The original purpose for contactless payments was to allow for small and insignificant payments, so raising the cap is understandable to meet consumer demand. The convenience of tapping a card on a reader is undeniable, but all these small transactions can easily stack up. Not having to enter a pin code or hand over hard cash can make spending money seem rather whimsical. The sheer speed with which a contactless transaction can take place, feels as if money is not really being handed over.

The popularity of contactless payments in London can largely be attributed to the Oyster Card, the payment system used for travel on London’s transport network. Using contactless for travel purposes has certainly trickled down into normal consumer spending. Commuters can no longer use cash on London buses, so perhaps this restriction has warmed the general public to the idea of tapping their credit or debit cards.


It’s certainly harder to keep track of your spending when physical cash is not coming out of your wallet. Budgeting can potentially become difficult if you are totally reliant on card payments. Personally, I find it far easier to keep control over my finances if I take out a lump sum of cash at the start of the week. I can physically see if my spending is becoming too frivolous. I’m not forced into looking at my mobile banking app, regardless of how convenient it may be. However, I wish I could heed my own advice. Like the majority of consumers, I too seem to be a slave to my debit card.

However, digital banking does allow consumers to keep tabs on their spending, as long as they are prepared to face the reality of all their small transactions.

Contactless future

Contactless payments are still a relative novelty, and careless spending can be attributed to not being used to this form of payment. Payments using a contactless card still only account for 2.7% of card transactions in the UK, and time will tell how consumers adopt the new technology as it continues to enter the mainstream.