Millions of people could soon be able to spend more than £100 with a single tap of their bank card after the Financial Conduct Authority confirmed plans to lift the current limit on contactless payments.
From March, banks and card providers will be able to set their own limits for contactless payments, including the ability to remove the limit entirely without requiring customers to enter their PIN. The Financial Conduct Authority (FCA) has also encouraged businesses to give their customers more control, for example by allowing them to set their own limits or turn off contactless payments entirely.
The move represents a significant departure from the long-standing £100 cap, although the FCA stressed that it does not expect banks to raise limits immediately. Instead, companies are given the flexibility to adapt their products over time to consumer demand and technological change.
Contactless payments were first introduced in the UK in 2007 with a limit of £10. This cap has risen steadily over the years, reaching £100 in 2021 after the Covid pandemic accelerated a series of increases. In contrast, smartphone payments with biometric security such as fingerprint or facial recognition already enable unlimited spending.
Despite the regulatory change, the desire for higher limits appears to be muted. An FCA survey carried out during the consultation found that 78 per cent of consumers did not want the £100 limit to change. Many respondents expressed concerns about fraud, theft and accidental overspending.
These concerns were echoed by academics and consumer groups, who warned that higher or unlimited limits on contactless payments could make cards more attractive to criminals. While security measures already exist – such as entering a PIN after a series of contactless transactions – critics argue that removing the cap could increase the risk, particularly if a card is stolen.
There are also concerns about spending patterns. Unlimited contactless payments could encourage impulse purchases, especially on credit cards where consumers borrow money instead of spending their own money. Financial abuse charities have warned that higher limits could make it easier for perpetrators to drain victims’ accounts without immediate detection, while accelerating the move towards a cashless society.
The FCA said consumers would continue to be protected from losses caused by fraud. David Geale, the regulator’s executive director of payments and digital finance, said the aim was to balance flexibility and security.
“Contactless is the most popular way to pay,” he said. “We want to ensure our rules provide flexibility for the future and choice for both businesses and consumers.”
Industry groups have tried to reassure customers that any changes require caution. Jana Mackintosh, managing director of payments and innovation at UK Finance, said banks would ensure “strong security and fraud controls remain in place”.
Several other countries, including Canada, Australia and New Zealand, already allow card providers to set their own contactless payment limits.
The announcement comes as efforts continue to ensure access to cash for those who need it. Cash Access UK announced this week that it has opened its 200th shared banking hub, offering face-to-face services in communities affected by branch closures.
While the £100 cap may soon be a thing of the past, it remains to be seen to what extent banks decide to expand the limits on contactless payments – and how many customers choose to do so.
