By Sarah Clark
The UK’s Financial Conduct Authority (FCA) has begun a public consultation on proposed plans either to significantly increase or remove altogether the current £100 (US$129.83) limit on contactless card transactions.
The FCA has set out its thinking in an engagement paper on contactless payment limits. The associated call for feedback is open until 9 May 2025.
“The FCA is looking at whether removing or increasing the contactless limit could benefit consumers, merchants and economic growth in the UK,” the regulator explains.
“Families and businesses across the country could benefit from greater choice, flexibility and smoother purchases, under proposals being considered by the FCA.
“Making regulation less prescriptive would also give firms greater control and could promote innovative payment methods or fraud prevention solutions.”
“One option put forward is to allow firms, who use technology to reinforce strong fraud controls, to set their own limits as happens in the United States.”
“The FCA will focus on how consumers are protected in the case of any changes to contactless limits,” the FCA adds.
“Existing legislation requiring firms to reimburse consumers in cases of unauthorised payment fraud, for example when their cards are lost or stolen, will remain in place.”
“According to published UK Finance analysis, fraudulent contactless spend totalled £41.5m [US$53.89m] in 2023; an increase of 19 per cent on 2022; they state however that recent rises in contactless fraud have been increasing at a much slower pace than the expansion in transactions volumes and values, and the fraud to turnover ratio for contactless fraud remains below that for unauthorised card fraud overall.”
“Currently 85 per cent of people in the UK make contactless card payments each month,” executive director of payments and digital assets at the FCA, David Geale says.
“This is the perfect opportunity to explore whether we can improve and increase trust in the UK’s payments system.”
