Consumers across the United Kingdom are being urged to stay vigilant as a significant shift in contactless payment regulations approaches. The Financial Conduct Authority (FCA) has confirmed that from March 2025, banks and card providers will gain new powers to allow customers to set custom transaction limits, or even have no limit at all, for single contactless payments.
New Flexibility Brings New Responsibilities
Under the forthcoming changes, the rigid, system-wide cap on contactless card payments will be removed. This means financial institutions will be empowered to let their customers choose a maximum amount for a single tap-and-go transaction, potentially removing the need for a PIN entirely for larger sums. David Geale, the FCA's Executive Director of Payments and Digital Finance, emphasised the move is designed to reflect how people prefer to pay. "Contactless is people's favoured way to pay," he stated during an interview on the BBC's Today programme.
He explained that while the current system functions well, the existing fixed limits could "slow things down." The regulator's goal is to "give banks and payment firms greater flexibility to set their own approach to contactless payment, where they see a low risk of fraud."
Security Experts Urge Caution
Financial services experts have welcomed the convenience but issued a stark warning about security. Nicola Morgan, a specialist at the comparison site confused.com, highlighted the critical balance users must now manage. "For many, contactless has become the simplest way to pay, and giving banks and customers more flexibility... could make everyday purchases quicker and more convenient," she said.
However, she cautioned: "It’s important to balance convenience with security. Contactless payments don't require a PIN, which means they’re easy to use, but that also means it’s vital to manage your own settings carefully." Ms Morgan pointed out that mobile payments via Apple Pay or Google Pay often include an extra layer of biometric security, like fingerprint or face ID, which can offer more protection for larger spends.
Her advice was clear: consumers should proactively check their bank's fraud protection policies and monitor their accounts regularly. "Many banks already reimburse unauthorised contactless transactions, but it’s worth double-checking what’s covered and how quickly you'd be refunded," she advised, adding that checking transactions regularly, especially after shopping trips, is essential to spot any unusual activity quickly.
Industry Pledges Robust Security Measures
The banking industry has sought to reassure the public that security will not be compromised. Jana Mackintosh, Managing Director of Payments and Innovation at UK Finance, stated: "Any changes made in the future will be done carefully and ensure strong security and fraud controls remain in place."
Furthermore, the FCA's David Geale confirmed that consumer protections against fraud will remain robust. Consumers will still be entitled to get their money back if it is stolen by fraudsters, maintaining a key safeguard in the system. The push for personalisation is strong, with Mr Geale adding, "What we're really encouraging is that they'll open up that flexibility for customers to set their own limits."
With over one in three (35%) UK adults already using Apple Pay or Google Pay for daily spending, according to confused.com's research, these changes are poised to affect the financial habits of millions. As March approaches, the message from regulators and experts is unified: embrace the new convenience, but do so with your eyes wide open to the security settings now in your hands.
