The Financial Conduct Authority (FCA) has abolished the £100 limit on contactless card payments, allowing banks to set their own restrictions. The regulator stated that this change enables financial institutions to adapt to evolving consumer preferences, inflationary pressures, and technological advancements.
Previously, contactless transactions were capped at £100 in the UK, a limit introduced in 2020. The FCA's decision removes this blanket restriction, giving banks the flexibility to increase or decrease limits based on their risk assessments and customer needs.
Consumers may see higher contactless limits, potentially reducing the need to use PINs for moderate-value purchases. However, banks will need to balance convenience with security, as higher limits could increase fraud risks. Some institutions may opt to keep lower limits or introduce dynamic limits based on spending patterns.
The move reflects a broader trend towards digital payments and reduced reliance on cash. The FCA emphasized that the change is part of ongoing efforts to modernize payment regulations and support innovation in the financial sector.
