The Financial Conduct Authority (FCA) is consulting on whether to raise the £100 limit on contactless payments.

The regulator said that consumers could benefit from the convenience of contactless payments when making larger purchases.

The FCA said that it wants to give card providers the flexibility to decide the right limit for them and their customers.

Many card providers already offer customers the ability to adjust their personal contactless limits or turn off contactless functionality on their card altogether, with the FCA encouraging firms to continue to offer their customers this choice.

Based on industry feedback, the UK watchdog said it anticipates most firms will continue to implement the £100 limit in the time being.

Contactless card payments come with the same protection as any other card payment, meaning banks and payment firms must reimburse unauthorised fraud cases, such as when somebody’s card has been lost or stolen.

The FCA said that contactless fraud rates are currently low, citing UK Finance’s Annual Fraud Report 2025 which estimates levels at 1.3p per £100 spent on contactless transactions, compared to 6p per £100 for all unauthorised fraud.

David Geale, executive director of payments and digital finance at the FCA, said that people will still be protected from fraud and firms will refund money if customers’ cards are used fraudulently.

“We‘re seeing smarter payment technology and more well-established fraud controls, so it’s the right time to let firms tailor contactless payments to fit their customers’ needs and drive innovation,” he added. “While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers.”

Sam Riordan, executive director of banking & payments at consultancy Capco, said that while the changes are positive, they could leave users more vulnerable to fraud as they do not use two-factor authentication like digital wallets. He also said that spending limits act as important safeguard against fraud.

“With the FCA making clear that firms must reimburse consumers for unauthorised transactions and take ownership of fraud prevention strategies, it is important that they match any increase in flexibility with stronger fraud detection and monitoring, along with a review of fraud and dispute rules,” he added. “As with previous payment innovations - from chip and PIN to contactless, and the early rollout of digital wallets - shaking the inertia of old habits is crucial to encourage the safer and more convenient forms of payment as there is particular risk of confusion or misunderstanding if different limits apply across payment methods, making clear communication and guidance essential.”

Edvards Margevis, co chief executive & partner of FinTech payments company CONCRYT, said that the FCA’s proposal reflected the “natural evolution” of consumer behaviour.

“Shoppers increasingly expect fast, frictionless experiences at the checkout, and this move would bring physical cards in line with digital wallets, where no such restrictions apply,” he added. “While convenience is the clear win for consumers, particularly for larger everyday purchases like weekly groceries or family meals, it will be important that banks and providers balance this with robust fraud prevention and strong customer protection.”

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