Contactless limit raised

Yeah the disputes team have their ways.

Banks are held to quite a high standard when it comes to determining fraudulent behaviour, it makes sure banks can’t use it to wiggle out of reimbursing their customers. If you’re interested I would recommend reading the Payment Services Regulations 2017. It’s pretty easy to understand, and it’ll scare the living daylights out of any bank if you start quoting it at them (assuming they’re giving you the run around).

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In that case I’m surprised that banks have been moving nearly all cards to contactless. With Monzo linked to my phone I know instantly if someone else has used it and can stop it immediately. If I lost any of my other cards, there could be many contactless transactions before I realised it. If a bank makes a card contactless, it is easier to use a lost or stolen card and increases their exposure to fraud. Why are they doing it?

call me cynical , but banks and merchants want us to spend money , the easier they can make that the better , so contactless makes the customer break their relationship with actually handing money over or being faffed with putting a PIN in , Banks then realised how much fraud was being committed by this contactless ease using stolen / cloned cards …so the powers that be decided lets limit the number of transactions before we ask you to verify your identity which in turn will still keep us (me and you ) spending relatively easily but protect us ( the banks ) from excessive fraud which we ( the banks ) are on the hook for reimbursing

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Because the gains (from greater use) outweigh the losses, presumably.

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The introduction of contactless tech predate me (and Monzo) by quite a bit, so I don’t know why contactless has become a big thing. But I can speculate based on what I know about banks, merchants and card networks.

I suspect the original contactless cards were pushed by merchants, card networks and credit cards. All of these parties stand to win quite a lot from more spending, even with higher fraud rates.

Merchants win simply due to more sales, so do card networks (who take a cut of every transaction). Credit cards also win from more spending, more spending means more interest. (Barclaycard where the first to intro contactless in the UK).

In the early days I don’t think there would have been much incentive for putting contactless on debit cards. While it increases spending, the extra earned for banks from interchange almost certainly doesn’t make it worth while.

Longer term I suspect that banks started issuing contactless cards as a method to bring in new customers. So providing contactless to existing customers probably wasn’t worth much, but providing it to new customer and getting them to switch almost certainly was. (Banks are happy to pay you £100 to switch, that should show you how much money they think they’ll make off you before you leave again).

Given enough time providing contactless cards just becomes expected. It’s no longer a competitive advantage, but just table stakes (like unlimited SMSs on a phone contract).

I don’t think the banks had any interest in driving this change. Ultimately if providing a feature costs money, a bank will find a way to recuperate that money. Indeed most banks had contactless limits long before SCA forced them. Especially as most banks do offline contactless, rather than online contactless like Monzo (which is why Monzo contactless is slower that other banks). Without limits every card they printed would be able to perform an unlimited number of contactless transactions the bank would have to pay for, and no way to disable the card.

The SCA requirements are very much about protecting customers, not banks. You can see this if you compare the interchange rates (the money the bank and card network make on each transaction) between the EU and the US.

In the EU they’re capped by the EU, in the US they’re not. Interchange in the US is almost 10x the EU, and this extra money is used to pay for all the extra fraud in the US.

With SCA the EU quite explicitly said that they expect banks to keep fraud rates low. They can’t just collude with merchants and card networks to add the cost of fraud to every transaction.

In short the EU demands that financial transactions are cheap, and it demands that banks reduce fraud, rather that passing on the cost as hidden fees.

So while the contactless limits may feel annoying and misguided, protecting customers from costs that banks pay anyway. That only applies if you look at SCA from an individual level. If you take a broader view, you can see the PSD2 and SCA should force fraud rates down, and pass those savings onto customers, not banks.

If you take some time to read the regulations (and not just short news articles), then it’s quite clear what the intent of SCA is, and in my opinion it does quite a good job of realising that intent. Even though there are a couple of slightly rough edges.

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I’m not seeing any contactless before chip and pin limit any more in the app:

It’s gone from my Personal account (Android, v3.34.0) but it is still there in our Joint Account ! :man_shrugging:

that’s strange mine is showing contactless details

It’s there on mine - Personal Account, iOS TestFlight

Just to add to this comment, contactless came around in the UK as pressure from TFL (ie. mostly tubes in London). Instead of topping up Oyster cards, it’s a lot faster and more convenient to use a card.

And about “why” banks would want to provide this - besides the user experience - is a bit more selfish than you would think. People are more likely to spend more and more often via contactless. Anything in the payment world that involves a tiny bit of friction (such as chip + pin) means losing a surprising amount of sales. And most banks will want you to spend more on their cards, as they make interchange on it

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It’s certainly true that TfL wants customers to move from Oyster to contactless (Oyster is outdated and can’t be expanded in the way TfL wants). But there was a 7 year gap between contactless being introduced and TfL accepting it. I think I got my first card in 2009.

2007: contactless cards introduced in the UK
Sept 2014: TfL accepts contactless

Yes. In fact the first truly commercially available contactless card was the OnePulse from Barclaycard, which had an Oystercard combined in the same chip, which was operationally separate from the “cashless” payment system.

It was launched in 2007.

Yep, that was my first contactless card.

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I’ve hit the contactless limit (£225), and I need to do a chip and pin transaction to reset it. If I put my card into an ATM and do a balance check, will that do the trick?

yes that will reset the contactless payment as well

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I’m pretty certain that you have to do it on an actual chip and pin machine at the next transaction, no way round it other than using Google Pay or Apple pay

A bit of Googling suggests that it might work (for other providers, at any rate).

The Monzo help page doesn’t say that, though.

Maybe it just needs to be clearer.

it does reset the contactless limit as well if you use your card in a ATM, i know because i’ve done it myself

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Great! Thanks :slight_smile: and even if I just do a balance check instead of actually withdrawing cash?

You can look at your limits in the app and check it worked

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