Millions of consumers are set to experience significant adjustments to contactless payment card limits as per the latest announcement from the financial regulator.
Currently capped at £100, the contactless limit typically necessitates a four-digit PIN for transactions exceeding this amount. However, the Financial Conduct Authority (FCA) has disclosed that starting March 19, 2026, banks and payment providers will have the autonomy to establish their own limits.
In a bid to offer more flexibility, businesses are being prompted to allow customers to self-impose limits or deactivate contactless payments entirely. Many card issuers already permit customers to customize their individual contactless limits or disable the feature altogether.
Under the existing regulations, multiple contactless transactions under £100 can usually be made in a day. Nevertheless, if the cumulative total surpasses £300, the system may prompt the entry of a PIN.
With the upcoming rule modification, companies will also have the option to reconsider this threshold at their discretion. The FCA initially introduced these proposals in a letter to the Prime Minister in January, followed by a consultation period until mid-October.
The evolution of the contactless limit saw it begin at £10 upon its inception in 2007, progressively increasing to £15 in 2010, £20 in 2012, £30 in 2015, £45 in 2020, and finally reaching £100 in 2021.
According to prior estimates by the FCA, approximately 85% of UK residents engage in contactless card transactions on a monthly basis.
David Geale, the FCA’s executive director of payments and digital finance, emphasized the popularity of contactless payments among the public. He underscored the importance of rules that cater to future needs while offering choices to both businesses and consumers.
Kate Nicholls, chairwoman of UKHospitality, hailed the upcoming alteration as a boon for consumers and businesses alike, particularly in the hospitality and retail sectors. She lauded the FCA for facilitating smoother transactions through this change.
Jana Mackintosh, managing director of payments and innovation at UK Finance, welcomed the FCA’s decision to grant greater flexibility to banks and payment providers regarding contactless limits. She stressed the enduring appeal and security of contactless payments, assuring that any future adjustments would prioritize robust security measures.
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