£100 contactless card limit to be lifted from March

The regulator has confirmed that millions of people will be able to set their own contactless card payment limits or even have none at all.

From March, banks and card providers will be given the power to set a maximum or unlimited amount for a one-off payment without having to enter a four-digit PIN.

But the Financial Conduct Authority (FCA) is also calling on them to allow cardholders to set their own individual limits or turn off contactless altogether. Some banks already offer this feature.

The move comes despite the FCA's own research showing a lack of appetite among consumers and industry respondents for a change to the current £100 limit on contactless cards.

The FCA said it does not expect card providers to make immediate changes to the current limit from March, but they have the option to do so.

When contactless card payments were introduced in 2007, the transaction limit was set at £10. The limit was raised gradually, to £15 in 2010, £20 in 2012, then £30 in 2015, before the Covid pandemic caused a jump to £45 in 2020 and then £100 in October 2021.

Although the current limit for contactless card payments is £100, anyone using their smartphone to pay can spend any amount without having to enter a PIN.

Built-in security features such as fingerprints and Face ID provide greater security.

However, there are concerns that the cards will become more attractive to thieves and fraudsters, as large-value payments can be made with just a tap of the card.

Various security measures are already in place, such as requiring you to enter a PIN after making a series of consecutive contactless transactions.

Consumers will still get their money back if it is stolen by fraudsters, according to David Geale, executive director of payments and digital finance at the FCA.

“Contactless payment is a favorite payment method,” he said.

Speaking on the BBC Today programme, Mr Geale said that while the system was working well, tight restrictions could “slow things down”.

“So we want to give banks and payment companies more flexibility to choose their own approach to contactless payments where they see a low risk of fraud,” he said.

In practice, he said, this means banks and payment companies can choose the limit depending on their customers.

“But what we're really excited about is that they will open up that flexibility for customers to set their own limits,” he added.

Other countries, such as Canada, Australia and New Zealand, allow the industry to set limits on contactless cards.

Jana McIntosh, managing director of payments and innovation at UK Finance, which represents banks, said: “Any changes made in the future will be carried out carefully and ensure that strong security measures and fraud controls remain in place.”

The FCA's own survey of the rule changes, published during the consultation, found that 78% of consumers who responded said they did not want any changes to current restrictions.

Consumers and academics suggest the added convenience of unlimited contactless payment limits could also attract shoppers. spend without thinking.

This is said to be a particular problem with credit cards, where people spend borrowed money and accumulate debt.

Financial abuse charities have also warned that unlimited contactless spending could give criminals easy access to empty a victim's bank account without any checks or warnings.

They are also concerned that it could speed up the move to a cashless society, even though notes and coins are a lifeline for many financial abuse survivors whose card transactions are tracked online by their abusers.

One measure to help vulnerable customers access cash following bank branch closures is the development of shared banking centres.

Cash Access UK, the organization set up to protect access to cash across the UK, announced on Friday the official opening of its 200th banking center in Billericay, Essex.

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