Chip and Pin vs Contactless vs Mobile Payments: What’s the Difference and Which Is Best for Your Business?
Chip and PIN, contactless or mobile payments, which is right for your business? For most UK businesses the honest answer is all three, and the method your customer chooses matters far less than the deal you are on. This plain English guide explains the difference between chip and PIN, contactless and mobile payments, how each one works, and what actually affects what you pay.
What is the difference between chip and PIN, contactless and mobile payments?
Chip and PIN means inserting the card and entering a PIN. Contactless means tapping the card. Mobile means tapping a phone or watch using Apple Pay, Google Pay or Samsung Pay. All three settle into your account in the same way.
According to UK Finance, more than 60% of all card transactions in the UK are now contactless, so for most businesses contactless and mobile will be the bulk of what you take, with chip and PIN as the fallback for higher-value payments or when a bank requests a PIN check.
| Method | How it works | Speed | Limit | Security |
|---|---|---|---|---|
| Chip and PIN | Card inserted, customer enters PIN | 5 to 10 seconds | No upper limit, the PIN authorises it | Very secure, slightly lower fraud risk on high-value sales |
| Contactless (card) | Card tapped on the reader | 1 to 2 seconds | No legal cap since March 2026, but most banks still apply £100 | Very secure, UK fraud rates extremely low |
| Mobile (Apple, Google, Samsung Pay) | Phone or watch tapped on the reader | 1 to 2 seconds | No fixed limit, device authorises it | Arguably the most secure, needs biometric confirmation every time |
What is the contactless limit in the UK?
There is no longer a single legal £100 limit. The FCA removed the mandatory cap on 19 March 2026, so banks and payment providers can now set their own. In practice most major banks have kept £100 as their default for now, so that is still what most customers will reach on a single tap.
The cap is now a commercial decision rather than a legal one, and it is expected to rise gradually over time as banks and terminals are updated, rather than all at once. Most terminals and acquirers still cannot process above £100 contactless today, so for the moment little changes day to day. There has never been a fixed limit on Apple Pay or Google Pay, because the customer's device handles authentication with a fingerprint or face scan. Banks also still ask for a PIN periodically, usually after around five taps or once spending reaches roughly £300, as a security check.
What are mobile payments?
Mobile payments are payments made with a smartphone, smartwatch or other wearable instead of a physical card. Apple Pay, Google Pay and Samsung Pay are the common examples in the UK.
To the customer it feels identical to a contactless tap. To your business it settles exactly the same way, so there is nothing extra to set up as long as your terminal is NFC-enabled, which almost all modern machines are.
Is contactless safe for my business to accept?
Yes. Contactless is very secure, and for everyday purchase values UK contactless fraud rates are extremely low.
Chip and PIN carries a slightly lower fraud risk on high-value transactions because it requires the customer to know their PIN. Mobile payments through Apple Pay and Google Pay are arguably the most secure of all, since every transaction needs biometric authentication from the customer's device before it is processed. If a contactless tap is declined, that decision comes from the customer's bank, not your terminal, so it simply means they need to try another card or method.
Which payment method is best for your business?
None of them, and all of them. You need a card machine that accepts chip and PIN, contactless and mobile as standard, because your customers will expect to use whichever they prefer.
Here is the part that saves you money. Whether a customer pays by chip and PIN, contactless or mobile makes no difference to your transaction fee. What does make a difference is whether you are on a flat rate or a tiered structure, and whether your provider is transparent about what you are actually being charged. If you have never checked, our guide to card machine fees and what a PCI compliance fee is are the two worth reading next, and if you suspect you are overpaying it may be time to switch your card machine provider.
Chip and PIN vs contactless vs mobile: FAQs
What is the difference between chip and PIN and contactless?
Chip and PIN needs the card inserted and a PIN entered. Contactless lets the customer tap the card and go. Contactless is faster, while chip and PIN is used for higher-value sales or when a bank requests a PIN check.
What is the contactless limit in the UK?
There is no longer a single legal limit. The FCA removed the mandatory £100 cap on 19 March 2026, so banks can now set their own. Most major banks have kept £100 as their default for now, so that is still what most customers will reach. There is no fixed limit on Apple Pay or Google Pay, which use device biometrics.
Is contactless safe for businesses to accept?
Yes. UK contactless fraud rates are very low and every method is protected by bank-level security. Mobile payments are arguably the most secure, because each one needs biometric confirmation on the customer's device.
What happens if a customer's contactless does not work?
Banks periodically ask customers to insert their card and enter their PIN as a security check, even on low-value taps. The customer simply inserts the card and enters their PIN, or tries another card.
Does the payment method change what I pay in fees?
No. Whether a customer pays by chip and PIN, contactless or mobile makes no difference to your transaction fee. What changes your costs is whether you are on a flat or tiered pricing structure and how transparent your provider is.
Do I need a special card machine to take all three?
No. Most modern terminals accept chip and PIN, contactless, Apple Pay and Google Pay as standard. The thing worth checking is your pricing and contract, not whether the hardware can handle it.
Not sure if you are overpaying? The payment method never changes your fee, but your pricing structure does. Get a free, no-obligation statement review and we will show you exactly what you are paying and where you could save.
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