Credit cards Updated:
Customers who have contactless cards or phones with Near Field Communication (NFC) will be able to pay £20 using contactless terminals, up from the previous limit of £15.
The increase brings the UK into line with the eurozone, where consumers can pay for goods worth up to 25 euros using the technology.
The take-up of contactless technology has been slow in the UK , compared with other parts of the world, but the number of people using it is predicted to soar in the next few years.
There are already some 21 million contactless Visa cards in the UK , while new smartphones are increasingly including NFC technology, enabling customers to pay for goods and services using their mobiles.
The increase comes as the Post Office has announced it has become Europe's largest adopter of contactless technology. It is to roll out 30,000 contactless payment terminals across its network of 11,500 branches.
The programme is to begin on 6 June and is expected to end in October 2012.
"We are delighted to be delivering cutting edge technology through the Post Office network," Lesley Sewell, chief information officer, Post Office Limited, said.
"Contactless will bring huge benefits to our customers by increasing choice and reducing transaction times.
"Over the next few years, many Post Office branches will be transformed, becoming more customer focused, opening for longer and providing services in a convenient and efficient manner."
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