In a significant overhaul of payment rules, the UK is set to abolish the fixed £100 limit for contactless card transactions. The Financial Conduct Authority (FCA) has confirmed that from 19 March 2025, banks and payment providers will be given the power to set their own transaction caps.
What the New Rules Mean for Consumers
The current system, which restricts single tap-and-go payments to a maximum of £100, will be replaced by a more flexible framework. This move is designed to future-proof the payments landscape, offering greater choice for both financial firms and their customers. David Geale, the FCA's Executive Director of Payments and Digital Finance, stated: "Contactless is people's favoured way to pay. We want to make sure our rules provide flexibility for the future."
However, this does not mean a free-for-all. Under the regulator's Consumer Duty rules, any bank that opts to increase its contactless limit must clearly communicate the change to its account holders. Furthermore, existing security features, such as cumulative spending limits that require a PIN after a certain amount is spent, will remain a crucial backstop. A spokesperson for UK Finance emphasised: "That is a protection measure in place."
Fraud Prevention at the Heart of the Change
The FCA believes that granting firms this flexibility will act as an incentive for them to invest in and strengthen their fraud prevention systems. The logic is that with higher potential transaction values at stake, banks will be more motivated to deploy advanced security measures to protect customers.
Public reaction to the announcement has been mixed. Some welcome the added convenience, while others express deep concern over security. One Brit commented, "I think that customers should also have the option to limit the amount if they choose," highlighting a desire for personal control. Another warned starkly of a "thief's paradise," and a third revealed they had proactively reduced their own limit back to £30 for added security, stating, "I'd rather that than have £100 stolen each time."
Looking Ahead: A New Era for Payments
This regulatory shift marks the next step in the evolution of contactless payments in the UK, which began with small limits and has progressively increased. The change empowers financial institutions to tailor their offerings but also places a renewed onus on them to safeguard customers. As the March 19 implementation date approaches, consumers are advised to look out for communications from their own bank or card provider regarding any changes to their specific spending limits.
