UPDATE 1-Britain raises contactless limit as COVID accelerates electronic payments

(Adds more detail)

LONDON, March 3 (Reuters) - Britain is more than doubling to
100 pounds ($139.75) the limit on contactless payments made with
debit or credit cards, the finance ministry said on Wednesday,
as COVID-19 accelerates a shift to electronic payments from
cash.

The finance ministry said that while legally in force from
Wednesday, the changes to limits from the current ceiling of 45
pounds will not happen in practice immediately, as firms will
need to make the necessary systems changes.

The banking industry is due to implement the new 100 pound
limit later this year, it said.

Britain is no longer bound by the 45 pound cap on
contactless payments that was applied by the European Union,
whose single market the country left on Dec. 31, the finance
ministry added.

Britain's Financial Conduct Authority had already flagged
that the limit would be raised to 100 pounds.

Shops have encouraged contactless payments to minimise
physical interaction between people during the COVID-19
pandemic.

The proportion of debit card payments using contactless rose
from four out of 10 in 2019 to six out of 10 in September 2020,
the finance ministry said.

But lawmakers have expressed concerns that more financially
vulnerable people may find it difficult to pay by card. Banks
have also been warned about reducing the number of cash machines
and branches.

The finance ministry said the government is committed to
protecting access to cash, and set out proposals last October,
including seeing cashback offered at shops without consumers
having to make a purchase.
($1 = 0.7156 pounds)
(Reporting by James Davey and Huw Jones; Editing by David
Milliken and Catherine Evans)