UK FCA Proposes Raising Contactless Payment Limit to Enhance Consumer Flexibility and Economic Growth
The Financial Conduct Authority (FCA) has proposed lifting the £100 contactless payment limit, allowing banks with strong fraud controls to set their own limits starting 19 March. This change also opens the possibility for consumers to set their own contactless limits or disable the feature entirely.
This proposal is part of roughly 50 reforms suggested in a January letter from the FCA to Prime Minister Keir Starmer, aiming to stimulate economic growth.
Currently, contactless payments are capped at a £100 single transaction limit, with a cumulative limit of £300 across up to five consecutive tap-only payments. The reforms may also change this cumulative cap to accommodate evolving consumer behavior.
The FCA's intent is to enable larger payments via tap, catering to inflation, new technology, and shifting consumer demands while maintaining the existing fraud protections.
Data from Barclays indicates that in 2024, an overwhelming 94.6% of eligible in-store card transactions were contactless, with the number of monthly contactless transactions being ten times higher than in 2015.
Industry representatives have reacted positively: Kate Nicholls from UK Hospitality noted that the changes simplify payment processes for consumers and high street businesses. Jana Mackintosh from UK Finance emphasized that contactless payments remain popular and secure, with safeguards firmly in place.
Importantly, consumer protections continue unchanged, mandating banks to reimburse customers for any unauthorized fraud, thereby preserving existing fraud-reimbursement obligations.
