We sat down with Chris Jones, Managing Director at PSE Consulting, to discuss the UK’s removal of the GBP 100 contactless limit and what this shift means for payment behaviour, fraud risk, and the broader payments ecosystem.
With the UK removing the GBP 100 contactless limit from 19 March, how do you expect this change to impact payment behaviour?
In reality, this is more of an evolution than a revolution. If you’re already paying with your phone, nothing really changes. Higher-value contactless has been possible for a while. The difference is when you reach for your physical card.
What the change in rules does is give banks more flexibility and consumers more choice. Instead of a one-size-fits-all GBP 100 cap, issuers can tailor limits to different customer needs and risk profiles.
That said, we’re unlikely to see a big shift in day-to-day spending. Most contactless transactions are still relatively low value, and tapping to pay is already second nature in the UK. This is really about making the checkout experience a bit smoother and allowing issuers more flexibility, rather than changing how much people spend.
Why do mobile wallets like Apple Pay and Google Pay already support higher-value transactions?
It comes down to security. Mobile wallets can support higher-value payments because they add an extra layer of authentication – whether that’s Face ID, a fingerprint, or a passcode. That’s a big step up from tapping a physical card, where no verification is required below certain thresholds. On top of that, mobile wallets use tokenisation, so your actual card details are never shared with the merchant.
Put simply, you’re getting both stronger authentication and better data protection – which is why issuers are more comfortable allowing higher-value transactions on mobile devices.
What are the key risks of higher-value contactless payments on physical cards?
The risk is fairly straightforward: if a physical card is lost or stolen, higher limits mean more could potentially be spent before it’s blocked. That said, contactless fraud remains low, and issuers already have strong protections in place. Real-time monitoring, behavioural analytics, and risk-based controls are constantly monitoring for anything unusual and can step in quickly.
There are also built-in safeguards like cumulative spend limits and occasional PIN prompts. And importantly, customers are typically protected and refunded for unauthorised transactions.
The challenge for issuers is balancing convenience with control – making payments seamless without increasing exposure to fraud.
From a merchant perspective, what operational challenges could arise with higher contactless limits?
One area that doesn’t get enough attention is resilience. Contactless might feel effortless, but it relies on a complex chain of systems, and merchants ultimately control what’s accepted at the till. If there’s a technical issue or a cyber incident, retailers may switch off contactless altogether. When that happens, customers need to fall back on chip and PIN.
So even as contactless becomes more prominent, merchants need to ensure backup options are always available and staff are prepared. It also means reviewing risk settings and transaction processes to make sure they’re aligned with higher-value payments.
How does the UK’s approach to higher-value contactless payments compare with other markets in terms of limits, PIN usage, and overall risk management?
The UK is definitely pushing ahead in terms of flexibility. In many other markets, fixed contactless limits are still the norm, and PIN entry is required more often for higher-value transactions. That creates a slightly different experience for UK consumers when they travel – tapping might not always be enough, and PINs come back into play more quickly.
From a risk perspective, the UK leans more heavily on sophisticated fraud detection and issuer controls to enable this flexibility. Other markets tend to rely more on upfront verification, like PIN, at lower thresholds.
As the UK moves in this direction, maintaining strong risk controls will be key. And for consumers, there’s a simple takeaway: even in a contactless world, your PIN still matters, so make sure you remember it!
About the author
Chris Jones manages PSE Consulting’s business and is well known in the UK and EU for his regular insights into payments innovation. He has spent the last 20+ years leading assignments for major clients during his time at PSE and Accenture. His specialisations include customer proposition development, market entry strategies, and enterprise value creation. Chris is a highly effective communicator, with very strong analytical skills and able to deliver recommendations to C-level clients and company boards. Chris regularly supports major enterprises, corporates, and global digital merchants’ payments, bringing new market perspectives and identifying fresh opportunities for innovation and expansion. He has also delivered payment assignments for fintechs, banks, and processors on topics such as regulatory impacts, new acceptance methods, open banking, BNPL, gateway/acquirer convergence, and opportunities for M&A and inorganic growth.
About PSE Consulting
PSE Consulting is a leading global provider of payment advisory services to players across the payments landscape. PSE’s expertise has enabled it to deliver actionable market insights and operational optimisation to senior payments leaders for over 30 years. To learn more, visit: https://pseconsulting.com/
