Why do contactless payment limits exist?
Because a tap normally proves possession of the card and nothing else. A limit bounds what can be spent that way before the system insists on something only the owner can supply, and the figure itself is set by banking rules that differ by country and change.
A tap proves possession
Presenting a card demonstrates that whoever is standing there has the card. It demonstrates nothing about whether they are entitled to it.
Every other payment method with the same property has a limit for the same reason, and contactless is not a special case.
The limit is therefore a statement about verification rather than about the technology: beyond this amount, possession alone is not enough.
Two limits, not one
A per transaction ceiling, above which verification is demanded for that purchase.
And a cumulative allowance across successive taps, so that a series of small transactions cannot indefinitely avoid verification.
The amounts, how the cumulative allowance is counted, and what resets it are set by the payment schemes and by national rules, and they change. No figure appears here for that reason.
The behaviour to expect is that a card will sometimes ask for a code with no apparent reason, and that this is the cumulative allowance doing its job rather than a fault.
Nothing to do with the radio
A common assumption is that the limit exists because contactless is somehow less secure than inserting the card. It does not.
The exchange is the same strength either way. What differs is that inserting a card is normally accompanied by a code, and tapping is normally not.
So the limit compensates for a missing verification step, not for a weaker channel, and raising the limit changes the size of the exposure rather than its nature.
This is also why a limit rising does not indicate that the technology has improved. It indicates a different judgement about acceptable loss.
Why a phone is treated differently
A phone performs the verification itself before presenting anything, so the step the limit was compensating for has already happened.
Where that is recognised, a phone payment is not subject to the same ceiling, which is the most visible everyday consequence of the difference between the two.
It is also a useful way to understand the whole arrangement: the limit is the price of not verifying, and a device that verifies does not pay it.
If a phone payment is refused for an amount a card would take, the cause is usually the terminal or the merchant configuration rather than the phone.
Frequently asked questions
Why is there a limit at all?
Because tapping proves possession of the card and nothing more. The limit bounds what possession alone can spend.
Why was I asked for a code on a small purchase?
A cumulative allowance across successive taps forces verification periodically. It is working rather than failing.
Is contactless less secure than inserting the card?
The exchange is the same strength. What differs is that inserting is usually accompanied by a code and tapping is not.
Why can a phone pay more?
Because it verified who is holding it before presenting anything, so the step the limit compensates for has already happened.