UK shoppers poised for major card payment change as 'restriction' may be removed
Families and businesses across the country could benefit from greater choice, flexibility and smoother purchases, the Financial Conduct Authority has claimed.
The contactless card payment limit, currently £100, could be removed or increased as part of plans to stimulate UK economic growth. The Financial Conduct Authority (FCA) said it was looking at the benefit of changing the amount people could spend using contactless payments for consumers, retailers and UK economic growth.
In a letter sent to Prime Minster Keir Starmer in January, the FCA outlined proposals to change the payment limit; this week, it issued an update saying it was consulting with the financial industry between now and the beginning of May on the plans. The plans could mean that companies who can prove they have strong fraud controls are allowed to set their own limits.
The FCA noted this already happens in the United States.
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.”
Don't miss: Fury as supermarket petrol stations make key change to payment policy
Don't miss: Warning as Tesco, Asda and Sainsbury’s stop accepting cash payments
Don't miss: Martin Lewis' advice for anyone with £1,000 in savings and credit card debt
In 2023 the independent Future of Payments Review said increasing contactless limits or eliminating the 'occasional PIN prompt' would lead to less frustration and a better experience for Brits.
The Government’s National Payments Vision later backed up this proposal
Emma Reynolds, economic secretary to the Treasury, 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."
The FCA said it would neeed to make sure consumers were protected in the case of any changes to contactless limits and that existing legislation requiring firms to reimburse consumers in cases of unauthorised payment fraud, for example when their cards are lost or stolen, remains in place.
Contactless payment fraud, where a contactless card is lost or stolen and then used by someone other than the cardholder to pay for goods and services at a contactless terminal, remains a very small part of overall payments fraud, and a relatively small part of unauthorised payment fraud.
According to published UK Finance analysis, fraudulent contactless spend totalled £41.5 million in 2023; an increase of 19% on 2022.
It also found that rises in contactless fraud have been increasing at a much slower pace than the expansion in transactions volumes and values, and the fraud to turnover ratio for contactless fraud remains below that for unauthorised card fraud overall.
The Mirror has reported that 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.
