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The Financial Conduct Authority (FCA) has unveiled proposals that could see the current £100 cap on contactless card payments increased – or potentially removed altogether. If approved, this would mean shoppers could soon pay for larger supermarket shops or restaurant bills with a simple tap, without needing to enter their PIN.
Why now?
When contactless payments were first introduced in 2007, the limit was just £10. It has risen gradually over the years, most recently reaching £100 in October 2021.
According to the FCA, the new proposal reflects both rising living costs and changes in how people choose to pay. Digital wallets on smartphones already allow unlimited contactless spending because of added security features such as fingerprint or facial recognition. As a result, many consumers are turning to their phones instead of cards when paying.
How it could work
Under the plans, the FCA would not directly set the new limits. Instead, banks and card issuers would decide whether to raise them. Some may even allow customers to set their own cap or keep the limit at a lower level if preferred. Payment terminals would also need to be updated to process higher-value contactless transactions.
Although many people remain cautious – 78% of respondents to an FCA consultation wanted the £100 cap to remain – providers argue that higher limits would speed up transactions and reduce interruptions at the checkout.
Fraud and security concerns
Each time the limit has been raised, concerns have been raised about security. This latest proposal has been put forward despite consultation responses suggesting most consumers and industry participants prefer the current rules.
The FCA acknowledges in its analysis that higher limits could increase fraud-related losses, but highlights that detection systems are continually improving. It also stresses that customers are protected and would receive refunds if their card is used fraudulently.
Safeguards are already in place. For instance, a PIN is required if consecutive contactless payments exceed £300 or if more than five are made in a row. Many banks also give customers the option to reduce their own contactless limit or disable it entirely.
What happens next?
The FCA’s consultation runs until 15 October, with changes potentially coming into effect early next year. If adopted, the familiar four-digit PIN could become a much rarer feature of everyday shopping.
For now, the £100 limit still applies, but businesses may want to prepare for a potential shift in how their customers prefer to pay.
