There has been a £100 limit to contactless payments up until now – but that’s set to change
How we pay by contactless may be about to change(Image: Shared Content Unit)
Within days a significant shift will take place that could affect anyone shopping in supermarkets and other retail outlets across the UK. Banks and card providers will be granted the authority to establish a maximum – or unlimited – contactless single payment amount without requiring a four-digit PIN.
Under amendments being implemented next year by the Financial Conduct Authority (FCA), banks and payment providers with robust fraud controls will have the freedom to determine their own limits. The date this will come into effect is March 19, 2026.
If your weekly shop amounts to more than £100, currently you must insert your card into the chip and pin machine and input the number on the keypad. For the biggest stories in Wales first sign up to our daily newsletter here
But with food inflation rates skyrocketing, £100 doesn’t stretch as far as it once did in supermarkets like Sainsbury’s, Tesco, Aldi, Asda, Morrisons and Waitrose.
The FCA stated it did not anticipate card providers making immediate alterations to the current limit from March, but they possessed the flexibility to do so.
When contactless card payments were launched in 2007, the transaction limit was fixed at £10. This limit was incrementally increased, to £15 in 2010, £20 in 2012, then £30 in 2015, before the Covid pandemic triggered a leap to £45 in 2020, and then to £100 in October, 2021, reports Wales Online.
However, those using their smartphone to pay face no spending restrictions without requiring a PIN. Built-in security measures, including thumbprints and face ID, offer enhanced protection.
The objective is to enable companies to respond more effectively to evolving consumer preferences, inflation and emerging technology.
Companies are also being urged to allow customers to establish their own threshold, or disable contactless functionality entirely, as numerous high street banks currently do.
However, worries have been voiced about cards becoming increasingly tempting to criminals and fraudsters, when high-value payments can be processed with a simple card tap.
Based on consumer spending figures from Barclays, 94.6% of eligible in-store card transactions were contactless in 2024. Throughout 2024 there were 10 times as many contactless transactions monthly compared to 2015, according to Barclays.
Alongside a £100 threshold for an individual contactless card transaction, there’s also a combined total of £300 in contactless transactions, or a maximum of five consecutive contactless transactions, since the most recent application of “strong customer authentication” to verify a payment was completed.
Under the regulatory amendment, companies will also have the flexibility to consider altering the cumulative contactless methodology should they wish to.
The FCA believes offering greater flexibilities will encourage firms to enhance their fraud prevention measures, providing consumers with stronger protection.
Current protections will remain in force, meaning consumers must be reimbursed in cases of unauthorised fraud, such as when their card is lost or stolen.
The examination of the contactless card threshold was amongst approximately 50 initiatives the regulator set out in correspondence to Prime Minister Sir Keir Starmer in January to help bolster economic growth.
The proposals were open for consultation until October 15. The regulator has previously indicated that, according to industry feedback, it expected most firms would continue to implement the £100 threshold for the foreseeable future.
David Geale, executive director of payments and digital finance at the FCA, said: “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, said: “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. Whilst 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. Whilst 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.”