The limit on contactless payments will rise from £45 to £100 from October 15, in a bid to get people to spend more in shops.
It is the second time in less than two years the limit has been increased - in March 2020 the limit on contactless payments was increased from £30 to £45 amid the coronavirus pandemic.
The increase had already been announced by the government earlier this year, but banks had not yet decided when to implement it.
Concerns about crime
But the latest rise caused concern among some that it could be easier for fraudsters to spend people’s money.
In March Gareth Shaw, head of money at consumer research and advice body Which?, said: “The risk of falling victim to contactless card fraud is currently low, but there is potential for thefts to rise if criminals take advantage of the increased spending limit to maximise the amount they can steal.”
What can you do to protect yourself?
With concerns about fraud and theft, UK Finance have debunked some of these fears on their website.
One of the concerns is that criminals are able to steal details from contactless cards.
In response to this, UK Finance said this was a false claim.
They said: "You must be extremely close to someone for them to be able to read your card.
"Even then, they would only get the card number and expiry date which is the same information you see by simply looking at the front of any card.
"There’s no way anyone can access to the important details such as the security code on the back of the card."
Another fear that they addressed was that thieves would be able to take money from contactless cards by bumping into people on the street.
"There has never been any verified report of this ever happening in the UK. It’s not possible to simply ‘steal’ cash from a contactless card. All money must go through the card system," UK Finance said.
Equifax, a consumer reporting agency, advise people on how to avoid and report contactless fraud on their website.
They said: "Don't keep your cards in easily accessible pockets or bags which will draw pickpockets' attention."
They also advise consumers to line wallets or cardholders with tin foil to block scamming devices, and to never let their card out of their sight while making a payment.
Shoppers can also ensure they ask for a receipt to make sure they were charged the right amount, and keep a close eye on bank statements to spot any unusual activity, Equifax said.
When it comes to reporting fraud, Equifax said on their website that people should report any lost or stolen cards as quickly as possible, and to report the fraud to Action Fraud - the UK's national reporting centre for fraud and cyber crime.
Meanwhile some shops might take longer to introduce the new limit, because they need to update their terminals.
Why has the limit been increased?
David Postings, chief executive of trade body UK Finance, said: “Contactless payment has proved very popular with consumers and an increasing number of transactions are being made using contactless technology.
“The increase in the limit to £100 will allow people to pay for higher value transactions like their weekly shop or filling up their car with fuel.
“The payments industry has worked hard to put in place the infrastructure to enable retailers to update their payments systems so they can start to offer their customers this new higher limit.”
When contactless cards were first introduced in 2007, payments were capped at £10. This rose to £15 in 2010, £20 in 2012, £30 in 2015 and £45 in April last year in the early days of the pandemic.
Chancellor Rishi Sunak said: “Increasing the contactless limit will make it easier than ever to pay safely and securely, whether that’s at the local shops, or your favourite pub and restaurant.
“As people get back to the high street, millions of payments will made be simpler, providing a welcome boost for retailers and shoppers.”