The regulator notes that families and businesses alike across the country could benefit from greater choice, flexibility, and more convenient purchases. Modifying the regulation to be less prescriptive would also give firms greater control and could promote innovative payment methods or fraud prevention solutions.
This initiative is part of the work announced in January in a letter to the Prime Minister to support growth. One option put forward is to allow firms who use technology to reinforce fraud controls to set their own limits as happens in the US. Any changes would need to support good customer outcomes as required by the Consumer Duty.
Currently, 85% of people in the UK make contactless card payments each month, according to representatives from the FCA. The regulator wants to explore whether it can improve and increase trust in the UK’s payment system. This work is one of around 50 measures the FCA put forward at the start of 2025 to help support economic growth across the region and improve experiences and lives.
A representative of the Treasury noted that every regulator has a part to play in the collective mission to drive growth through the Plan of Change, which aims to support working people with more money. The FCA’s review of the contactless payment limits, including removing the GBP 100 limit on individual payments, is a move that ensures that families can safely benefit from more flexibility when making purchases.
The FCA will focus on the protection of customers in case of any changes to contactless limits. Existing legislation that requires firms to reimburse consumers in cases of unauthorised payment fraud will remain in place.
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