Major Contactless Payment Changes Loom for UK Supermarket Shoppers
A significant transformation in how British consumers pay for their groceries is on the horizon, with major supermarkets including Sainsbury's, Tesco, Aldi, Asda, Morrisons and Waitrose potentially affected within weeks. The Financial Conduct Authority (FCA) has confirmed that from March 19, 2026, banks and card providers will gain unprecedented authority to establish their own maximum contactless payment thresholds, potentially removing the current £100 limit that has been in place since October 2021.
How the New System Will Work
Under the forthcoming regulations, financial institutions with robust fraud prevention measures will be empowered to determine their own single transaction limits for contactless payments. This could mean customers paying for their weekly shop might no longer need to insert their card and enter a PIN for purchases exceeding £100. The change comes as rising food prices mean £100 no longer stretches as far in supermarket aisles, making the current limit increasingly impractical for many households.
The FCA has indicated that while card providers will have the option to alter thresholds from March next year, most businesses are expected to maintain the £100 limit initially. However, the fundamental shift represents a major departure from current regulations that strictly cap physical card contactless payments at £100 per transaction.
Evolution of Contactless Payments
Contactless card payments have undergone substantial evolution since their introduction in 2007:
- Initial cap of £10 at launch
- Increased to £15 in 2010
- Raised to £20 in 2012
- Further increased to £30 in 2015
- Pandemic-driven rise to £45 in 2020
- Current £100 threshold established in October 2021
Interestingly, while contactless cards face these limits, smartphone payments through services like Apple Pay and Google Pay already allow unlimited transactions without PIN entry, protected by biometric security measures including thumbprint and facial recognition technology.
Security Concerns and Consumer Protections
Despite the convenience benefits, concerns have emerged about potential security implications. Some experts worry that cards could become more attractive targets for criminals if substantial purchases can be completed with a simple tap. However, the FCA maintains that offering enhanced flexibility will encourage businesses to strengthen their fraud prevention measures, ultimately providing consumers with stronger safeguards.
Current consumer protections will remain in effect, ensuring reimbursement for unauthorised fraud when cards are lost or stolen. Additionally, companies are being encouraged to allow customers to establish their own spending limits or disable contactless functionality entirely - services many high street banks already provide.
Industry Response and Future Implications
Industry leaders have welcomed the regulatory changes while emphasising security considerations. David Geale, executive director of payments and digital finance at the FCA, stated: "Contactless is people's favoured way to pay. We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers."
Kate Nicholls, chairwoman of UKHospitality, commented: "Making life easier for consumers is a positive for any hospitality and high street business. Contactless has increasingly become the preferred payment method of choice for many people and lifting the limit can mean quicker and easier experiences for consumers."
Jana Mackintosh, managing director of payments and innovation at UK Finance, added: "We welcome the FCA's move to give banks and payment providers greater flexibility over contactless limits in the future. While we do not expect to see any immediate change to the £100 contactless limit, any changes made in the future will be done carefully and ensure strong security and fraud controls remain in place."
Current Usage Patterns and Additional Limits
Barclays consumer spending figures reveal that 94.6% of eligible in-store card transactions were contactless in 2024, with monthly contactless transactions increasing tenfold since 2015. Beyond the individual £100 cap, current regulations also include a cumulative threshold of £300 in contactless transactions, or a maximum of five consecutive contactless payments, before requiring additional authentication.
Under the revised regulations, companies will gain freedom to reassess this cumulative methodology should they wish to do so. The examination of contactless thresholds formed part of approximately 50 initiatives the regulator outlined in correspondence to Prime Minister Sir Keir Starmer in January, aimed at bolstering economic expansion through modernised payment systems.
The proposals underwent consultation until October 15, with the regulator drawing on industry responses to shape the final implementation. As Britain's payment landscape continues to evolve, these changes represent a significant step toward adapting to consumer preferences, inflationary pressures, and emerging technologies while maintaining essential security frameworks.
