Millions of consumers are set to experience significant adjustments to contactless payment card limits following recent announcements by the financial regulator.
Currently, the contactless limit stands at £100, requiring a PIN entry for transactions exceeding this amount. However, the Financial Conduct Authority (FCA) has stated that starting March 19, 2026, banks and payment providers will have the authority to establish their own limits.
Moreover, companies are being urged to offer customers the option to customize their limits or deactivate contactless functionality entirely. Many card issuers already permit clients to modify their personal contactless limits or disable the feature altogether.
Under the existing regulations, multiple contactless payments under £100 can typically be made in a day. However, if the cumulative purchases surpass £300, a PIN entry may be requested.
With the upcoming rule adjustment, firms will have the flexibility to potentially revise these thresholds as desired. The FCA initially proposed these changes in a letter to the Prime Minister in January, followed by a consultation period until mid-October.
The inception of contactless technology in 2007 saw a limit of just £10, which gradually increased to £15 in 2010, £20 in 2012, £30 in 2015, £45 in 2020, and eventually reaching £100 in 2021.
Previously, the FCA estimated that 85% of individuals in the UK engage in contactless card transactions monthly.
David Geale, the FCA’s executive director of payments and digital finance, emphasized the popularity of contactless payments among consumers. He highlighted the importance of adaptable rules to accommodate future trends and cater to the preferences of both businesses and customers.
Kate Nicholls, chairwoman of UKHospitality, lauded the FCA’s initiative, noting the positive impact on consumer convenience for hospitality and retail businesses. She highlighted the efficiency and ease that higher contactless limits could bring to consumers.
Jana Mackintosh, managing director of payments and innovation at UK Finance, welcomed the FCA’s decision to grant banks and payment providers greater control over contactless limits. She emphasized the secure and widespread adoption of contactless payments, assuring that any future adjustments would prioritize stringent security measures.
In conclusion, the FCA’s move to enhance flexibility in contactless payment limits has been well-received by industry representatives, signaling a shift towards accommodating evolving consumer preferences and technological advancements.