We propose a smooth pseudopotential for the contact interaction acting between ultracold atoms confined to two dimensions. The pseudopotential reproduces the scattering properties of the repulsive contact interaction up to 200 times more accurately than a hard disk potential, and in the attractive branch gives a 10-fold improvement in accuracy over the square well potential. Furthermore, the new potential enables diffusion Monte Carlo simulations of the ultracold gas to be run 15 times quicker than was previously possible.