The potential removal of the £100 contactless payment limit could bring significant changes for consumers. The Financial Conduct Authority (FCA) is contemplating either increasing or eliminating the current limit. This consideration follows the FCA’s initial announcement in January to review the contactless limit.
In a recent development, the FCA released an engagement paper seeking feedback on various options, including the possibility of scrapping the contactless limit altogether or allowing individual firms to set their own limits, akin to the system in the United States.
Over the years, the contactless card payment limit has seen several increments, starting from £10 in 2007 and reaching £100 in 2021. Despite the increase, users can typically make multiple contactless transactions in a day under the current limit, with a possible requirement to enter a PIN for cumulative purchases exceeding £300.
David Geale, the FCA’s executive director of payments and digital assets, highlighted the importance of enhancing trust in the UK’s payments system, with 85% of UK residents already engaging in contactless payments monthly. The FCA’s review aligns with broader efforts to support economic growth and enhance consumer experiences.
Economic Secretary to the Treasury, Emma Reynolds, lauded the FCA’s initiative as a positive step towards empowering families with greater flexibility in payment options. While contactless fraud figures have shown a 19% increase to £41.5 million in 2023 compared to the previous year, the rise in fraudulent activities has not kept pace with the growth in transaction volumes and values, as per UK Finance analysis.