£100 contactless payment limit under review

The UK’s financial watchdog is considering either scrapping or increasing the £100 contactless payment limit.

According to the Financial Conduct Authority (FCA), 85% of people in the UK make contactless card payments each month.

The regulator believes that either removing or increasing the contactless limit could benefit both consumers and businesses, and give them more choice, flexibility and smoother purchases.

David Geale, executive director of payments and digital assets at the FCA, said: “This is the perfect opportunity to explore whether we can improve and increase trust in the UK’s payments system.”

A consultation on removing the limit is underway and will run until 9 May.

FCA review welcomed

Emma Reynolds, the economic secretary to the Treasury, has called the announcement a “welcome step to ensure that families can safely benefit from more flexibility when making purchases”.

Jana Mackintosh, managing director of payments and innovation at UK Finance, added that while having a contactless limit can help to prevent fraud, it should be industry rather than the regulator setting limits and deciding how many times a customer needs to enter a PIN.

“Banks know their customers and can strike the right balance between protecting them and giving them fast and secure payment options,” she said.

According to figures from the British Retail Consortium, debit and credit card payments accounted for 75% of transactions in 2023, despite an increase in cash usage throughout the year.