Contactless payment technology is in the midst of disrupting how UK consumers make every purchase. Yet even the recent discussions around implementing transaction caps have caused alarm over the prospect of extravagant spending sprees and economic vandalism. Contactless cards first appeared in the UK in 2007 at a £10 limit. Since then, they have developed drastically, doubling the limit to £45 in 2020 and soon increasing it to £100 in October 2021. Regulators are considering allowing banks and card companies to eliminate spending caps altogether. This decision has been met with increasing alarm over its effect on consumer spending patterns and financial stability.
The regulator, the Financial Conduct Authority (FCA), is calling for a move to such a model. This model would empower providers—to the benefit of consumers—not regulators to determine contactless limits, as is the case in the US and Singapore. This proposal has sparked discussions about personal choice, with some consumers advocating for the ability to set their own limits on contactless transactions. Ben, a consumer, expressed his view on the matter:
“The most important principle here is personal choice. I would like to set my own personal limit.”
Independent statistics from the payments industry confirm that, on average, contactless credit card payments are growing. It leapt from £6.36 in January 2015 to an astonishing £21.94 by June 2025. In April 2020, the average debit card payment more than doubled from £6.64 to £18.79. Given that this wave came just after the contactless limit was raised, these numbers reflect a sea change in consumer habits, as more and more consumers are choosing to go digital with digital wallets on their smartphones.
Stuart Mills, an industry expert, noted the potential consequences of removing transaction limits:
“Removing such frictions, while offering some convenience benefits, is also likely to see many more people realising they’ve spent an awful lot more than they ever planned to.”
The rise of contactless spending can encourage consumers to make impulse buys they otherwise wouldn’t have. Richard Whittle emphasized this risk, stating:
“If this ease of payment leads to consumers spending without thinking, they may be more likely to buy what they don’t really want or need.”
For one, consumers have quickly embraced the convenience of contactless payments. Some advocates are raising urgent alarms that this technology could be used to perpetuate economic abuse, particularly to exploit vulnerable people. Sam Smethers, chief executive of Surviving Economic Abuse, warned that unlimited contactless spending could have dire consequences for survivors of economic abuse:
“Unlimited contactless spending could give abusers free access to drain a survivor’s bank account with no checks or alerts.”
The UK’s attitude toward contactless payments is all changing. In Canada, it’s the payment networks that establish contactless limits instead of regulators. Meanwhile, Lloyds, Halifax, and Bank of Scotland customers can already adjust their contactless payment limits directly through banking apps, offering flexibility in increments of £5 up to £100. Gabby Collins from Lloyds emphasized their commitment to providing customers with this option:
“This could leave a survivor without the money they need to flee and reach safety, while pushing them even further into debt.”
As regulators wrestle with these challenges, people that want to see democracy thrive should advocate for recommended reforms that improve security while considering the end-user experience. As UK Finance has reiterated, if changes are needed they will be implemented “carefully with safety at the heart.”
“Lloyds, Halifax and Bank of Scotland customers can already set their own contactless payment limits in our apps – in £5 steps, up to £100 – and we’re absolutely committed to keeping that flexibility.”
Consumer sentiment toward spending habits and payment method convenience is still in flux. Robert Ryan highlighted the importance of maintaining some degree of oversight:
Hannah Fitzsimons remarked on the evolution of payment methods and how regulators are beginning to align with consumer behaviors:
“Does give me a bit of a prompt to make sure I’m not overspending on my tap-and-go.”
Stakeholders are deeply engaged in trying to figure out how far contactless payments should go. It’s a balancing act of their convenience benefits against the threat of unlimited spending and possible economic coercion. As technology advances and consumer preferences shift, it remains essential for both regulators and financial institutions to balance innovation with responsible practices.
“Regulators are finally catching up with how people actually pay.”
The debate over contactless payment limits continues as stakeholders weigh the benefits of convenience against the risks of unchecked spending and potential economic abuse. As technology advances and consumer preferences shift, it remains essential for both regulators and financial institutions to balance innovation with responsible practices.