FCA to Allow Removal of £100 Contactless Payment Limit from March 2026
From March 2026, the Financial Conduct Authority (FCA) will permit banks to remove the £100 single-transaction limit and the £300 cumulative spending limit on contactless card payments. While banks will be allowed to set their own restrictions, widespread changes are not expected immediately as most consumers are reportedly content with current limits.
Currently, contactless payments are capped at £100 per single transaction with a cumulative limit of £300 or five taps before a PIN is required. These limits reset when a PIN is used or when the card is used online. Notably, digital wallets such as Apple Pay do not have any such spending limits.
The FCA warns that removing or raising limits could lead to an increase in fraud, with a worst-case scenario projecting a potential 131% rise in fraud if limits were raised to £150 per transaction and £450 cumulative. To mitigate this, banks are advised to implement fraud checks, such as alerts or blocks on unusual activities, and to allow customers to set their own spending limits to guard against fraud or overspending.
In cases of loss or theft, customers should promptly report and cancel their cards. Failure to report may result in a liability up to £35. Unauthorised payments will be reimbursed if reported within 13 months, except where customers were complicit or failed to protect their card details.
Despite being a frictionless payment method, contactless payments have not led to significant overspending; average contactless transactions in 2024 were £16.10, based on Barclays data. Customers retain control by having the option to set their own limits or disable contactless payments altogether.
Additionally, banks may contact customers regarding large payments or suspend cards if suspicious activity is detected to enhance security.
