What is the limit of contactless usage?

Tap and Go, But Know Your Limit: Understanding Contactless Payment Restrictions

Contactless payments have revolutionized how we shop, offering a quick and convenient alternative to cash and traditional chip-and-PIN transactions. The ease of simply tapping your card or phone against a reader has made it a popular choice for everyday purchases. However, this convenience comes with certain limitations designed to protect consumers from potential fraud.

While the exact limits can vary depending on your bank and region, there’s a common framework in place, particularly for smaller transactions. In many countries, including India, contactless payments are subject to both a per-transaction limit and a daily transaction limit before requiring a PIN.

For instance, in India, the current contactless limit is often capped at five consecutive transactions, with each individual transaction limited to ₹5,000. This means you can make up to five contactless purchases under ₹5,000 each without needing to enter your PIN. However, once you exceed either of these limits – either the five-transaction limit or a single transaction surpassing ₹5,000 – you’ll be prompted to enter your PIN for the next purchase. This effectively resets the contactless counter.

This two-tiered limit serves as a security measure. By requiring PIN authentication after a certain number of transactions or a higher value purchase, the system adds a layer of protection against unauthorized use should your card or phone be lost or stolen. Imagine a scenario where someone finds your card. They could potentially make several small contactless purchases before you even realize it’s missing. The transaction limit helps minimize potential losses in such situations.

Furthermore, these limits can be dynamically adjusted by your bank based on your spending patterns and risk profile. While the standard limits are generally sufficient for everyday purchases, your bank might impose stricter limits if they detect unusual activity. Conversely, they might offer higher limits after a period of consistent and secure usage.

It’s also important to note that these limits apply specifically to contactless transactions. You can still make purchases above ₹5,000 using your card and PIN, even after reaching your contactless limit. The restriction is solely on the consecutive use of the contactless feature without authentication.

In conclusion, while contactless payments provide unparalleled convenience, it’s crucial to be aware of the associated limits. Understanding these restrictions not only allows you to manage your spending effectively but also ensures you’re leveraging the security features built into the system. Check with your bank for the specific limits applicable to your card and stay informed about any updates or changes.