Seven UK Banks to Keep £100 Contactless Limit Despite Regulatory Change
The Financial Conduct Authority (FCA) has recently amended its rules to allow banks greater flexibility in setting contactless payment limits, responding to evolving consumer demands. However, seven major UK financial institutions have announced they will continue to maintain the existing £100 cap, ensuring consistency for customers.
Banks Retaining the Current Limit
Traditional high-street banks including Barclays, HSBC, Lloyds, Nationwide, NatWest, and Santander have confirmed they will not alter their £100 contactless limit. Among digital-only providers, Monzo has also stated it will keep the current threshold. Meanwhile, other neobanks like Starling and Revolut are still evaluating their options and have not yet reached a final decision on any potential changes.
FCA's Rationale for the Rule Change
An FCA spokesperson explained that the regulatory adjustment aims to provide flexibility for the future and choice for firms, merchants, and consumers. David Geale, executive director of payments and digital finance at the FCA, emphasized that contactless payments are the preferred method for many, and the new rules are designed to foster innovation while maintaining robust consumer protections. He noted that with strong fraud controls and advancing payment technology, this move allows firms to adapt without compromising security.
Public Opinion and Industry Response
Following the FCA's announcement before Christmas, Martin Lewis, founder of MoneySavingExpert.com, conducted a poll on social media platform X to gauge public preference. Out of over 9,500 respondents, a majority of 57% favored keeping the limit at £100. Smaller percentages supported increases to £200 (22%) or £500 (9%), while 12% preferred a decrease to £40.
Kate Nicholls, chair of UKHospitality, welcomed the change, stating that simplifying payments benefits hospitality and high-street businesses by enhancing customer experiences. She highlighted that while some consumers still opt for cash or chip and PIN, the updated regulations offer much-needed flexibility for both providers and users.
The decision by these seven banks to retain the £100 limit reflects a cautious approach, balancing consumer familiarity with the potential for future adjustments as market trends and technological advancements evolve.
