The potential elimination of the £100 contactless payment limit is under consideration, signaling a significant change for consumers. The Financial Conduct Authority (FCA) is exploring the option of raising or completely removing the current contactless payment limit, as detailed in a communication to the Prime Minister earlier this year.
In a recent development, the FCA released a new document seeking input on various strategies, including the possibility of scrapping the contactless limit entirely or allowing individual businesses to establish their own limits, a practice common in the United States.
The contactless payment limit has undergone multiple adjustments over the years, starting from £10 in 2007 and progressively increasing to £100 in 2021. Although users can typically make multiple contactless transactions in a day, each under £100, exceeding a cumulative total of £300 might prompt the need for a PIN entry.
David Geale, the FCA’s executive director of payments and digital assets, highlighted the opportunity to enhance trust in the UK’s payment system, given that 85% of UK residents engage in monthly contactless card transactions. This initiative is part of a broader scheme aimed at bolstering economic growth and improving the quality of life across the UK.
Economic Secretary to the Treasury, Emma Reynolds, lauded the FCA’s review of contactless payment limits, emphasizing the importance of providing families with increased purchasing flexibility by potentially removing the £100 limit per transaction.
Recent data from UK Finance reveals that fraudulent contactless spending reached £41.5 million in 2023, marking a 19% rise from the previous year. Despite this increase, the rate of contactless fraud growth has been slower compared to transaction volumes and values, suggesting a relative stability in fraudulent activity within the contactless payment sector.