UK consumers may soon see contactless payment limits raised above £100, as proposals from the UK financial watchdog are under consideration. These changes would remove the minimum transaction floor empowering banks and payment providers to set their own transaction limits. This would make contactless payments a whole lot more convenient for users. If approved, the proposals could go into effect as soon as next year.
Contactless card payments first arrived in the UK in 2007, with an initial transaction limit of £10. The limit increased gradually over the years: to £15 in 2010, £20 in 2012, and £30 in 2015. In 2020 the limit was increased to £45, and most recently, it was increased to £100 in October 2021.
The UK financial regulator, the Financial Conduct Authority (FCA), has been consulting since March on whether to raise or eliminate the £100 cap. Customer feedback has already pointed to the cap being raised to as much as £150 to £250 per transaction. At present, consumers are limited to £300 worth of contactless payments in one day.
Under the new proposals, banks and other payment providers would have the flexibility to adjust limits according to their customers’ needs. This could lead to a more tailored experience for users, allowing them to make larger purchases without the inconvenience of entering a PIN.
David Geale, director of policy at the UK’s financial regulator, said these amendments were needed.
“Even with contactless, firms will refund your money if your card is used fraudulently.” – David Geale
He continued that though no immediate changes would be made, that flexibility would allow for improved customer convenience.
“While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers.” – David Geale
Geale sounded optimistic about the timing for these updates, pointing to a wave of new payment technology and fraud prevention measures employed across the financial system.
“We’re seeing smarter payment technology and more well-established fraud controls, so it’s the right time to let firms tailor contactless payments to fit their customers’ needs and drive innovation,” – David Geale
As the discussions evolve, stakeholders remain attentive to how these changes might impact consumer behavior and security in financial transactions. Fraud without consent is now at 6p in every £100. This creates an additional layer of urgency for banks as they review the need to decrease contactless payment limits.