Contactless cards are going to get rid of one of the most frustrating things about making card payments

Frustrated with card
That minimum spend on card can be annoying. Flickr user B Rosen

Every retailer in the UK is going to have to give customers the option to pay with a contactless card within the next five years, The Telegraph reports.

Under new requirements imposed by Visa and MasterCard, all shops will have to have contactless payment terminals installed by 2020. These tap-and-go payments are becoming an easy alternative to cash payments for transactions under £20. In fact, the total number of contactless payments has doubled every year since 2012. From September 1st, the £20 limit is going to be lifted to £30 too.

So far there has been one thing stopping a seamless transition to card payments. Visa and MasterCard charge merchants a fee every time a transaction is made. In order to counteract these fees, smaller merchants — especially, you’ll have noticed, convenience stores and pubs — require a minimum spend from the customer to make the transaction worthwhile.

But contactless transactions are generally cheaper to process than chip-and-PIN transactions, and quicker too. They can even be several pence cheaper to deal with for small debit transactions under £10. Merchants know this, and will occasionally waive the £5 minimum spend if a customer is paying with a contactless card. If every store in the country is equipped to take contactless payments, they could be encouraged to remove that minimum entirely.

That means it won’t be necessary to buy several cartons of milk at a corner shop to make a card payment, or get a few drinks in at once at your local.

The card processing ecosystem is keen for customers to reduce their use of cash. That’s because at every step of a card payment, someone — acquirers or processors, issuers, card networks, and gateway providers — takes a fee for their services. That cost ultimately trickles down to shop owners and their customers, which is why the EU is capping the fees retailers pay to process debit and credit card transactions.

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