4 minute read
Editor's note: This article was updated on August 31, 2023, from its original publish date of September 30, 2021.
The world is becoming more and more contactless. That includes the way people pay. Over the past few years, consumers have switched to contactless payment methods at an accelerated rate. Contactless payments are popular because they offer a mix of speed, convenience, security and safety.
In response to consumer demand, governments and issuers have increased limits on contactless payment cards to reduce friction at the point of sale (POS) and keep commerce moving at a faster speed. It's important for businesses to keep up with the latest guidance on contactless payment limits to ensure regulatory compliance—and deliver a smooth customer experience.
What are contactless payment limits?
A contactless payment limit—also referred to as a cardholder verification method (CVM) limit—is the maximum amount your customers can pay with a contactless card before they're prompted for a signature or PIN verification. These contactless payment limits are in place to protect consumers from fraud. Each country sets its own limit or leaves it up to the issuing or acquiring bank to determine. (When your customers make a contactless payment from a mobile phone with their digital wallet, two-factor authentication is generally used and there is no contactless payment limit.)
Contactless payment limits around the world
Contactless payment limits are subject to change and can vary by country, financial institution and payment card provider. In some regions, limits may be increased or adjusted as technology and security evolve, and not all countries (like the US and Venezuela) have set contactless payment limits.
Here's a deeper look at contactless payment limits around the world.
Countries within the Asia-Pacific (AP) region have the highest rates of contactless payment adoption. There isn't a standard contactless limit across borders in the region. Each country sets its own rules or lets financial institutions, businesses or cardholders determine their own limits.
Here are some current contactless payment limits for key AP countries:
- China—CNY 1000
- Hong Kong—HKD$1,000
- India—INR 5,000
- New Zealand—NZD $200
Contactless limits vary across Europe. Here are some contactless payment limits in European countries.
Western Europe limits
Eastern Europe limits
- Czech Republic—500 CZK
- Hungary—15,000 HUF
PSD2 and SCA in the European Union
Countries in the European Union (EU) have been more proactive in placing limits on contactless payments because of the Payment Services Directive (PSD2). Under PSD2 regulations, Strong Customer Authentication (SCA) adds a required extra layer of security to electronic payments across the EU.
Payment service providers can apply for exemptions from SCA requirements, enacted as part of PSD2. SCA exemptions remove the added customer friction that comes from requiring multi-factor authentication with contactless payments.
- Low-value transactions: An exemption can be applied to a certain number of low-value transactions before requiring authentication—or when the value of multiple payments exceeds €100.
- Low-risk transactions: Payment providers with low fraud rates—as defined by PSD2—can use real-time transaction risk analysis to apply for exemptions on behalf of their its sellers up to €500.
- Recurring payments: For subscriptions or other recurring transactions that are the exact amount each time, customers only need to authorize the payment the first time.
- Trusted seller status: A consumer can request to whitelist a business as safe, removing the need to authenticate additional transactions once approved by the issuer.
In Latin America, here are the current contactless payments across key countries.
- Brazil—BRL 200
- Chile—15,000 CLP
- Colombia—100,000 COP
- Mexico—500 MXN
- Venezuela—Contactless limits are subject to change in Venezuela due to a fluctuating market and government.
Contactless payment limits vary across North America.
- Canada—Interac, Mastercard, Visa and American Express have set limits at CA$250.
- US—Contactless payment limits vary by financial institution or payment card provider and are always subject to change; in 2020, most contactless payment limits were increased to USD $100-$250 per transaction.
Ensure compliance—and keep customers happy
As contactless payments continue to grow in popularity, understanding how contactless limits affect your business will be increasingly important.
If you're looking for support with contactless payment limits in the countries you sell in, contact us. Or check out our cloud-based POS solutions or commerce and payment trends. We make commerce easy.