The possibility of eliminating the current £100 contactless payment limit is under review, potentially bringing significant changes for consumers. The Financial Conduct Authority (FCA) is contemplating raising or completely removing the limit, as mentioned in a letter to the Prime Minister back in January. In a recent development, the FCA has released an engagement paper seeking input on various options, including abolishing the contactless limit or allowing companies to set their own limits, akin to practices in the United States.
The contactless card payment limit has undergone multiple increases over the years, starting at £10 in 2007, then rising to £15 in 2010, £20 in 2012, £30 in 2015, £45 in 2020, and finally reaching £100 in 2021. While there is currently no restriction on the number of contactless transactions per day as long as each is below £100, exceeding a cumulative total of £300 may prompt the need to input a PIN.
David Geale, the FCA’s executive director of payments and digital assets, highlighted that 85% of UK residents use contactless payments monthly. This move aims to enhance trust in the UK’s payment ecosystem and is part of a broader strategy to boost economic growth and improve living standards. Economic Secretary to the Treasury, Emma Reynolds, praised the FCA’s initiative to review contactless payment limits, emphasizing the potential benefits for families in making secure and flexible transactions.
According to UK Finance data, fraudulent contactless spending in 2023 reached £41.5 million, marking a 19% increase from the previous year. Despite the rise in fraudulent activity, the rate of increase lags behind the growth in transaction volumes and values, indicating a relatively slower escalation in contactless fraud compared to transaction activity levels.
