The FCA has changed its mind about contactless limits, offering card providers the flexibility to decide their own contactless limit for their customers.
Many card providers allow their customers to adjust their personal contactless limits or turn off the contactless function altogether. The FCA is now encouraging firms to continue to do so, a change from its announcement form March, when it considered removing the GBP 100 limit.
More convenience for customers
FCA sees smarter payment tech and more modern fraud controls, so it decided to let firms have free rein over their contactless payment limits, allowing them to tailor the functionality to fit their customers’ needs and demands. While the regulator does not expect to see immediate changes, it wants financial institutions to offer flexible and innovative solutions in the UK, making payments more convenient for customers.
Even if a user’s card is used fraudulently, they will still be protected, as firms will refund the amount lost. Contactless payments offer the same protection as any other card payment, and banks and companies must reimburse unauthorised fraud cases, such as when somebody’s card has been lost or stolen. The UK Finance’s Annual Fraud Report 2025 estimates that contactless fraud rates are currently low, at circa GBP 1.3 per GBP 100 spent on contactless transactions, when compared to GBP 6 per GBP 100 for all unauthorised fraud.
The initiative is one of the 50 measures that the FCA mentioned in its letter to the Prime Minister in January, aimed at supporting economic growth and prioritising digital solutions. The proposals are out for consultation until 15 October 2025. One option put forward is to allow firms that 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.
