Contactless card payments could soon become unlimited as the UK’s financial service regulator looks to allow banks and other providers to scrap the £100 cap.
The Financial Conduct Authority (FCA) announced the proposal on Wednesday, which aims to give card providers the flexibility to set transaction limits and decide the right limits for their customers.
Previous transaction limit increases have raised concerns about fraud and theft, but the FCA has stated that banks are required to reimburse unauthorised fraud cases if a card has been lost or stolen.
David Geale, executive director of payments and digital finance at the FCA, said: “People are still protected; even with contactless, firms will refund your money if your card is used fraudulently.
“We’re seeing smarter payment technology and more well-established fraud controls, so it’s the right time to let firms tailor contactless payments to fit their customers’ needs and drive innovation.”
The changes could come early next year. Mr Geale said: “While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers.”
The transaction limit began at £10 when contactless card payments were introduced in 2007. It was raised to £15 in 2010, to £20 in 2012, to £30 in 2015, to £45 in 2020, and then to £100 in October 2021, where it has sat since.
It would see debit and credit cards used similarly to payments made through digital wallets, which have no limit. It may also make the requirement to enter a four-digit PIN obsolete, with shoppers able to tap their card for any purchase.
But while card providers would have flexibility to set their own limit, they would only allow higher payments for low-risk transactions, the FDA said.
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Card providers already offer customers the option to change their transaction limit or turn off contactless payments entirely. The FCA said it would encourage providers to continue to offer this option.
The proposal was one of 50 measures that the FCA set out in a letter to prime minister Sir Keir Starmer in January, which aim to support economic growth.
The letter said the FCA wanted to “remove the £100 contactless limit, allowing firms and customers greater flexibility, drawing on US experience, and levelling the playing field with digital wallets”.
The proposals are out for consultation until mid-October.
