Banks and card providers could gain flexibility to set their own contactless payment limits from March 19
People using contactless payments will see a change coming soon(Image: Getty Images/iStockphoto)
A significant alteration that could affect shoppers in supermarkets and other retail outlets across the UK has been scheduled. From March, banks and card providers will be granted the authority to establish a maximum – or even unlimited – single payment amount without requiring a four-digit PIN.
The Financial Conduct Authority (FCA) is implementing changes next year whereby banks and payment providers with robust fraud controls can determine their own limits. The date for this change to take effect is March 19, 2026.
Currently, if your weekly shop exceeds £100, you are required to insert your card into the chip and pin machine and input your PIN. However, with food inflation on the rise, £100 doesn’t stretch as far as it once did in supermarkets such as Sainsbury’s, Tesco, Aldi, Asda, Morrisons and Waitrose.
Under existing regulations, individuals can make payments of up to £100 per transaction using physical contactless cards. The FCA stated that it does not anticipate card providers to immediately alter the current limit from March, but they have the discretion to do so.
When contactless card payments were first introduced in 2007, the transaction limit was set at £10. This limit has gradually increased over time, rising to £15 in 2010, £20 in 2012, then £30 in 2015, reports Wales Online.
The Covid pandemic prompted a leap to £45 in 2020, followed by an increase to £100 in October 2021.
Whilst contactless cards presently operate under a £100 transaction ceiling, those utilising smartphones for payments face no such restrictions and can complete purchases of any value without requiring a PIN. Enhanced security measures, including fingerprint recognition and facial identification technology, offer superior safeguarding.
The objective is to enable businesses to adapt more effectively to evolving customer preferences, inflationary pressures and emerging technological developments.
Companies are additionally being urged to permit customers to establish their own thresholds, or disable contactless functionality entirely, a service already offered by numerous high street banking institutions. The appeal of contactless payments has grown in recent years, with transaction ceilings having been progressively raised through incremental adjustments.
However, apprehensions have emerged regarding cards becoming increasingly tempting targets for criminals and fraudsters, particularly when substantial sums can be transferred with a simple card tap.
Consumer expenditure figures from Barclays reveal that 94.6% of qualifying in-store card payments were contactless throughout 2024. In 2024 there were 10 times the volume of contactless transactions per month compared with 2015, Barclays data indicates.
Alongside the £100 ceiling for individual contactless card payments, there exists a combined threshold of £300 in contactless purchases, or a maximum of five successive contactless transactions, before “strong customer authentication” must be applied to validate a payment. Under the revised regulations, companies will additionally possess the freedom to contemplate adjusting the cumulative contactless methodology should they wish to do so.
The FCA is of the view that providing enhanced flexibility options will encourage businesses to bolster their fraud prevention measures, thereby affording consumers stronger safeguards.
Current protections shall continue to apply, ensuring consumers receive reimbursement in instances of unauthorised fraud, such as when their card goes missing or is taken.
The examination of the contactless card threshold formed part of approximately 50 initiatives the regulator set out in correspondence to Prime Minister Sir Keir Starmer this past January, aimed at bolstering economic expansion.
The proposals remained open for consultation through to 15 October. The regulator has stated previously that, drawing on sector feedback, it expects the majority of businesses to maintain the £100 threshold for now.
David Geale, executive director of payments and digital finance at the FCA, commented: “Contactless is people’s favoured way to pay. We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers.”
Kate Nicholls, chairwoman of UKHospitality, remarked: “Making life easier for consumers is a positive for any hospitality and high street business, and I’m pleased the FCA is bringing forward this change.
“Contactless has increasingly become the preferred payment method of choice for many people and lifting the limit can mean quicker and easier experiences for consumers. While many people still prefer to use cash or chip and pin, this change adds much-needed flexibility for providers and consumers.”
Jana Mackintosh, managing director of payments and innovation at UK Finance, commented: “We welcome the FCA’s move to give banks and payment providers greater flexibility over contactless limits in the future.
“Contactless is a very popular and secure way to pay. While we do not expect to see any immediate change to the £100 contactless limit, any changes made in the future will be done carefully and ensure strong security and fraud controls remain in place.”
Jana Mackintosh, who represents banks as the managing director of payments and innovation at UK Finance, reiterated: “Any changes made in the future will be done carefully and ensure strong security and fraud controls remain in place.”