The possibility of eliminating the contactless payment limit on cards is being considered, signaling a significant change for consumers. Currently set at £100, the contactless limit may be increased or completely removed, as proposed by the Financial Conduct Authority (FCA) in a communication to the Prime Minister earlier this year.
In a recent update, the FCA released a new engagement paper seeking feedback on potential options, which include abolishing the contactless limit entirely or allowing companies to set their own limits, similar to practices in the United States. The contactless payment limit has been progressively raised over the years, starting at £10 in 2007, and reaching £100 in 2021. While multiple contactless payments under £100 are typically allowed in a day, exceeding a cumulative total of £300 may prompt the need to enter a PIN.
David Geale, the FCA’s executive director of payments and digital assets, emphasized the importance of enhancing trust in the UK’s payment system, especially considering that 85% of UK residents make monthly contactless payments. This initiative is part of a broader strategy to support economic growth and enhance the quality of life for individuals.
Economic Secretary to the Treasury, Emma Reynolds, praised the FCA’s review of contactless payment limits, highlighting the potential benefits of removing the £100 cap on individual transactions for families seeking greater purchasing flexibility.
According to UK Finance data, fraudulent contactless transactions in 2023 amounted to £41.5 million, marking a 19% increase from the previous year. However, the rise in fraudulent activity has not kept pace with the growth in transaction volumes and values, indicating a slower increase in fraudulent contactless spend relative to legitimate transactions.