Governments are raising contactless transaction value limits during the coronavirus pandemic

A number of countries and industries are encouraging noncash payment options at merchants and tolls - and in some cases preventing cash transactions entirely - in an effort to combat the spread of the coronavirus.

Global Contactless Volume

  • Several countries have increased their contactless transaction value limit to push consumers to use the payment method. To help fight fraud, contactless card payments generally have a value threshold at which consumers must authenticate the transaction - this can include steps like inserting the card's chip and entering a PIN, in addition to tapping their card. But in the wake of the coronavirus pandemic, countries including Egypt, Greece, Ireland, Poland, Malta, Norway, Turkey, and the UK are moving to raise their contactless limits, per NFC World. This move, which was already in demand in a number of markets, will make contactless transactions more convenient for consumers and may lead them to use the payment method more regularly. And with Visa praising local governments for raising their contactless limits, more countries may follow suit soon.
  • Many tolls have stopped accepting cash, forcing consumers to use other payment options. Tolls on several roads, tunnels, and bridges in the US, including the Lincoln Tunnel in New York and the Pennsylvania Turnpike, can no longer be paid in cash, per Digital Transactions. Consumers can instead pay some of these tolls with the E-ZPass electronic toll system, look up toll booth information and pay online, or pay bills assigned to their license plate number. Other markets, including New Zealand and the UK, have also restricted cash payments for some transit as authorities look to stem the spread of the virus through cash transactions.

These efforts can limit cash transactions and push consumers to make payments that include less contact, which might be appealing during the pandemic. The World Health Organization (WHO) said it was previously misrepresented when discussing cash's ability to spread infection, and now simply states that consumers should wash their hands after handling cash to practice good hygiene, per MarketWatch.

But even if cash itself doesn't carry a major risk of spreading infection, cash transactions still see consumers hand money to another person, often from a close distance. Similarly, noncontactless card payments can include customers handing a card back and forth to a cashier or touching a shared terminal. Contactless payments and alternative toll payment options can speed up these transactions and limit consumers' exposure to other people, so they may prove popular.

Discouraging cash payments during the pandemic may shift consumer habits so that they remain unpopular once it subsides, while alternatives like contactless payments could see their volume surge. If consumers adopt contactless payments and digital toll payment options, they may not switch back to cash in the years to come because of habit or a new preference for their speed, boosting noncash transaction volume. This could prove particularly true for contactless payments if countries maintain their raised transaction value limits, potentially propelling contactless volume to new heights.

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