FCA Proposes Raising £100 Contactless Payment Limit to Boost Convenience and Security
The Financial Conduct Authority (FCA) has proposed lifting the £100 limit on contactless card payments, with new rules expected to take effect from 19 March. Under the proposed changes, banks with strong fraud controls will be allowed to set their own limits, enabling consumers to potentially pay larger sums by tapping their cards without the need to enter a PIN.
The reform aims to respond to evolving consumer demands, inflation, and advances in technology. It would also give consumers the flexibility to set their own transaction limits or disable contactless payments entirely if they wish. Currently, contactless transactions are capped at £100 per transaction with a £300 cumulative limit. The proposal would allow firms to adjust the cumulative cap accordingly.
Despite these changes, banks would remain responsible for reimbursing consumers in cases of unauthorized fraud. This proposal is part of a wider set of about 50 measures outlined by the FCA in a letter to Prime Minister Keir Starmer in January, aimed at boosting economic growth.
Data from Barclays shows that in 2024, 94.6% of eligible in-store card transactions were contactless. Furthermore, the average monthly number of contactless transactions in 2024 has grown to about ten times that of 2015, highlighting the increased consumer reliance on contactless payment methods.
