Contactless card alert as increased £100 limit threatens ‘money memory’ of Britons | Personal Finance | Finance
Contactless card payments are secure, meaning Britons have the same fraud protections as they would expect from Chip and PIN transactions. However, the method is easier as individuals can simply make payments by tapping their card on a reader, rather than having to enter a four-digit number for verification. The limit on contactless card payments is increasing to £100 from £45, after a decision made by HM Treasury and the Financial Conduct Authority (FCA) alongside a public consultation.
The Chancellor Rishi Sunak has said the increase will make it “easier than ever” to pay in a safe and secure manner, providing a “welcome boost” to both retailers and shoppers.
Consumers will start to see retailers accepting contactless payments up to the new £100 limit, which is specifically designed to make it easier and more flexible for Britons.
Despite reassurances about the safety of the payment method, there is potentially a problem which could develop with contactless, according to some.
Personal finance experts at Ocean Finance have expressed worry about the idea of “money memory”, after a survey uncovered Britons are becoming financially forgetful due to reliance on tech such as contactless payments.
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Sarah Neate, Editor-in-Chief of Ocean Finance, said: “While rise in fintech has made us more reliant on it than ever – from using contactless payments to auto-password fill – unfortunately, our research has found that this is affecting our ability to remember and recite our own important financial details.
“Our research found that over half of Brits couldn’t remember the last payment they made on their debit or credit card.
“It’s important to stay on top of this info – to better budget and avoid getting into any financial difficulty due to lack of available funds.
“One piece of financial information you’d expect Brits to know is their card’s PIN number, but the shift towards online-first purchasing has meant there isn’t as much emphasis on remembering those four magic digits.
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“For example, almost two out of five Brits have experienced a total blank on their PIN number, likely due to the convenience of contactless payments as well as it not being needed to shop online.
“Another interesting point raised during our research was that 41 percent of those surveyed said that it has become easier to remember their CVV (the three-digit number on the back of payment cards) than their PIN because of our increased reliance on online shopping.”
However, as Ms Neate highlighted, there are a number of ways for Britons to improve their “money memory”, particularly helpful amongst forgetful people.
This can help Britons to get on top of their finances and avoid the stress of dealing with these matters in a hurry.
The first is to get into a regular habit of budgeting and setting goals, and can be followed up by cancelling any unused subscriptions and getting rid of unnecessary outgoings.
Next, is to check one’s payslip as not only does this help keep track of how much a person can spend, but also allows individuals to check for any unexpected changes which need to be flagged with an employer.
In a similar way to keeping a PIN in mind, Britons are also encouraged to limit reliance on auto-fill passwords. This can also make a person less susceptible to fraud.
To trigger memories of important tasks such as paying direct debits and utilities, Ocean Finance also recommends setting up a reminder schedule.
Individuals can also plan for contingencies, setting up a monthly direct debit to an account dedicated to essentials.
This ensures a person never misses a bill, and also develops a buffer over time.
The seventh tip shared with people is to get familiar with one’s credit rating. A healthy credit score could mean paying less interest, saving money on insurance and making it easier to rent or buy a property.
Finally, Britons can also use tools to help keep themselves on track, whether this is through websites or budgeting apps people can download onto their phone.
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