The contactless limit for card payments could soon be removed in a major shake-up for shoppers.
The contactless limit is currently set at £100 but the financial regulator is considering increasing this, or removing this limit entirely. The Financial Conduct Authority (FCA) first announced its intention to explore changing the contactless limit in a letter to the Prime Minister back in January.
In an update today, the FCA published a new engagement paper on the possible options it could take and is asking for feedback on any changes. As well as increasing or scrapping the contactless limit altogether, another option is to allow firms to set their own limits, like they do in the United States.
The contactless card payment limit has been raised several times over the years. It was set at just £10 when it was introduced in 2007, before rising to £15 in 2010, then £20 in 2012, to £30 in 2015, then to £45 in 2020 and £100 in 2021. You can normally make as many contactless payments as you like in a single day, as long as each one is under £100 – however, you may be asked to enter your PIN if you make a lot of purchases that add up to over £300.
David Geale, executive director of payments and digital assets at the FCA, said: “Currently 85% of people in the UK make contactless card payments each month. This is the perfect opportunity to explore whether we can improve and increase trust in the UK’s payments system. We’ve worked fast to progress this work which is one of around 50 measures we put forward at the start of the year to help support economic growth across the UK and, in turn, improve lives.”
Economic Secretary to the Treasury, Emma Reynolds, said: “Every regulator has a part to play in the collective mission to drive growth through our Plan for Change, which puts more money into working people’s pockets. The FCA’s review of the contactless payment limits, including removing the £100 limit on individual payments, is a welcome step to ensure that families can safely benefit from more flexibility when making purchases.”
Analysis from UK Finance analysis shows fraudulent contactless spend totalled £41.5million in 2023, an increase of 19% compared to 2022. However, the research noted that recent rises in contactless fraud have been increasing at a much slower pace than the amount of transactions volumes and values.
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