Despite the Financial Conduct Authority (FCA) scrapping the official £100 cap on contactless card payments, major UK banks have opted to retain the limit for now. Barclays, HSBC, Lloyds, Nationwide, NatWest, and Santander have all confirmed they will keep the £100 ceiling, while digital-only banks like Monzo have also decided against immediate changes.
The FCA removed the cap to allow banks flexibility in response to consumer demand, inflation, and new technology. However, UK Finance, the banking lobby group, stated that lenders are holding off due to a lack of widespread consumer demand and the need for retailers to update card terminals to accept higher amounts.
Contactless payments remain the most popular method, accounting for 67% of credit card and 76% of debit card transactions, with the average payment value just under £18. Banks like Lloyds and Santander already allow customers to set their own limits in £5 increments up to £100.
The FCA emphasised that any changes must be clearly communicated to consumers, with strong fraud controls in place. Concerns have been raised about higher limits enabling criminals to make larger purchases on stolen cards, as well as potential difficulties for consumers in managing their budgets.
Notably, payments via digital wallets such as Apple Pay, which use biometric verification, have no transaction limit and are unaffected by the rule change.
