Customers who are paying by debit or credit card on contactless can now spend up to €50.
The move was previously announced as part of measures associated with the coronavirus to help limit the number of cash transactions.
The contactless payment limit on cards has gone up, as of April 1st, from €30.
Banks, retailers and technology companies have worked together to facilitate the increase.
The new limit applies to all contactless transactions made in store with a physical debit or credit card across most essential retail outlets in Ireland.
The Banking & Payments Federation Ireland (BPFI) said that consumers made more than 1.5 million contactless payments a day during the fourth quarter of last year.
The number of contactless credit and debit card payments grew by 26% year-on-year, with nearly 141 million payments valued at more than €1.7bn.
In volume terms, an estimated 41% of all credit and debit card payments were contactless in the fourth quater - while 11% of the value of card payments were contactless.
Demand for cash dropped by 20%.
This is a combination of reduced overall spending, but also a consumer choice to use cards instead of cash.
Peter Roebben, chief executive officer at KBC Bank Ireland, has welcomed the change.
He said: "As Irish people continue to navigate the challenges presented by the coronavirus, it is critical that we, as an industry, remain focused on their best interests and offer the necessary supports to make life a little bit easier and safer.
"The increase to the contactless limit will encourage more consumers to tap and pay for goods and services, thereby limiting the exchange of cash and reducing physical contact in stores."
Consumers are also being asked to be extra careful and alert to scams of any kind, as online shopping increases.