A significant fraud warning has been issued to UK households as a major payment rule change is set to take effect in 2026. The Financial Conduct Authority (FCA) is scrapping the fixed £100 limit for contactless card payments, a cap that was first introduced in 2021.
The Shift in Responsibility and Risk
According to payment experts, this move is about much more than simply allowing higher tap-and-go payments. Chris Jones, managing director at PSE Consulting, explains that the change represents a fundamental shift in how payment fraud risk is managed. The FCA is moving away from a blanket rule and placing the responsibility on banks and card providers to control their own exposure.
"By lifting the contactless cap, the FCA is stepping away from a blunt, one-size-fits-all rule," said Jones. He emphasised that this significantly raises the bar for the industry, requiring them to implement more sophisticated risk management systems.
Potential for Increased Fraud and Criminal Shifts
While the change offers greater convenience, it carries notable risks. Jonathan Frost, director of Global Advisory for EMEA at BioCatch, highlighted that FCA estimates project the change could lead to an additional £31.3 million per year in contactless fraud. This figure represents a staggering 131 percent increase.
Frost warned that the core question is whether the raised limits will trigger long-term shifts in criminal behaviour. There is also a concern that some retailers, wary of increased chargeback fraud, may become reluctant to accept contactless payments, undermining the convenience the policy aims to deliver.
What This Means for Consumers and Banks
For the public, the real benefit may not be higher limits but greater personal control. Chris Jones pointed out that the win for consumers is the ability to set personal thresholds, switch contactless on or off instantly, and manage settings via banking apps.
However, the onus is now firmly on banks to respond appropriately. Jones stated that institutions treating this as a trust-building opportunity will strengthen customer relationships. Conversely, those that rush to increase limits without clear safeguards and communication risk eroding confidence and attracting scrutiny from both regulators and customers.
Experts agree that banks must prioritise implementing and continuously improving real-time fraud detection systems that analyse customer behaviour patterns, not just individual transactions. The rule change is scheduled for March 2026, giving the industry and consumers time to prepare for the new payments landscape.
