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Contactless card payments could go above £100 and potentially become unlimited under proposals to allow banks and other providers to set their own limits for customers.
The Financial Conduct Authority (FCA) said on Wednesday that the proposal to scrap the current limit would provide shoppers with more convenience and card providers “the flexibility to decide the right limit for them and customers”.
The UK financial watchdog has been consulting on giving banks the option of raising or removing the £100 cap, which would mean shoppers no longer need to enter a four-digit pin to authorise big purchases, since March.
Customers are also currently unable to make more than £300 of touch-free payments in a single day.
The FCA consultation on the proposals closes in October. If approved, the plans could be put in place as soon as early next year.
“We’re seeing smarter payment technology and more well-established fraud controls, so it’s the right time to let firms tailor contactless payments to fit their customers’ needs and drive innovation,” said David Geale, the executive director of payments and digital finance at the FCA.
“While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers.”
The move would bring cards in line with payments made through digital wallets on smartphones, which have no restriction, and reflects the changes in the way people pay amid a wider shift away from cash.
The FCA said there was unlikely to be an increase in the scale of fraudulent transactions if consumers lose their cards or they are stolen.
“People are still protected,” Geale said. “Even with contactless, firms will refund your money if your card is used fraudulently.
“While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers.”
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According to UK Finance’s annual fraud report, contactless fraud rates are currently low at about 1.3p per £100 spent on transactions. This compares with 6p per £100 for all unauthorised fraud.
Public feedback from an engagement paper launched in March suggested that the cap per transaction should rise to a figure between £150 and £250.
When contactless card payments were introduced in 2007, the transaction limit was set at £10. The limit was raised gradually, to £15 in 2010, to £20 in 2012, then to £30 in 2015, before the Covid pandemic prompted a jump to £45 in 2020, then to £100 in October 2021.
