UK Contactless Payment Rules to Change as FCA Removes £100 Cap

The UK is set to remove the £100 limit on contactless card payments from 19 March, giving banks and card providers the freedom to set their own maximum transaction limits. The change was announced by the Financial Conduct Authority (FCA), which said the update reflects evolving consumer habits, inflation and advances in payment technology.

Currently, contactless card payments are capped at £100 per transaction, with an additional cumulative limit of £300 or five transactions before customers must enter their PIN. Under the new rules, providers will also be allowed to remove these cumulative limits if they wish, provided they have strong fraud controls in place.

The FCA emphasized that customers will still retain control, as banks must allow users to set personal limits or disable contactless payments entirely. In the short term, regulators expect most providers to keep existing limits.

Contactless payments were first introduced in the UK in 2007 with a £10 limit. This threshold increased gradually over the years, reaching £100 in October 2021 following a sharp rise during the Covid-19 pandemic.

According to Barclays Bank, 95% of eligible in-store payments are now made using contactless technology. However, an FCA survey found that 76% of consumers believe the limit should remain at £100 or below.

The FCA confirmed that consumer protection rules will remain unchanged, meaning customers will continue to be reimbursed in cases of unauthorised fraud. While business groups welcomed the move as a boost for high street retailers, some economists warned that higher limits could encourage overspending, particularly on credit cards.