FCA consults on scrapping contactless limits
The UK’s Financial Conduct Authority (FCA) has launched a consultation on potentially removing the current £100 contactless payment limit. This move could open the door for higher-value tap-and-go transactions. The regulator first hinted at this change in January, aiming to assess whether greater flexibility could benefit consumers, merchants, and the wider economy by making purchases smoother and more efficient.
Historical Context and Current Review
The current £100 limit was raised from £45 in 2021, following an earlier increase from £30. Both previous increases responded to the surge in contactless adoption during the pandemic when demand for touch-free transactions spiked significantly. After 14 years of growth in contactless payments and with advanced fraud prevention tools now available, the FCA believes it may be time to reconsider restrictions.
One option under review would allow firms using stronger fraud controls and biometric security to set their own limits. This approach would mirror practices already established in the United States. Digital wallets already offer higher thresholds through fingerprint or facial recognition, and a policy change could put physical cards on equal footing with these digital alternatives.
Industry Perspective and Security Considerations
David Geale, executive director of payments and digital finance at the FCA, explained their position: “We’re seeing smarter payment technology and stronger fraud controls, so it’s the right time to let firms tailor contactless payments to fit their customers’ needs and drive innovation.” He noted that while widespread changes may not happen immediately, giving firms flexibility to adapt will encourage innovation in the payments sector.
Fraud data supports the FCA’s position. UK Finance’s 2025 Annual Fraud Report shows contactless fraud rates remain relatively low at 1.3p per £100 spent, compared to 6p per £100 across all unauthorized fraud. However, the regulator acknowledges that higher transaction limits could become more attractive targets for criminals. Consumers remain protected regardless, as firms must refund fraudulent transactions under current regulations.
Next Steps and Decision Timeline
The consultation has already received nearly 1,300 responses, reflecting strong industry and consumer interest in the potential changes. Submissions remain open until 15 October 2025, after which the FCA will decide whether UK firms can remove the cap and design their own contactless payment models. This decision could significantly reshape the UK’s payment landscape, providing more flexibility while maintaining security standards that protect both consumers and merchants in an increasingly digital economy.
