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UK Contactless Payment limits to Rise as FCA Eases Restrictions
Table of Contents
What Happened
The UK’s Financial Conduct Authority (FCA) announced on December 19, 2024, that it will grant banks more flexibility in setting future contactless payment limits. This move aims to streamline the payment process and better align with evolving consumer needs and technological advancements.
The official announcement stated that the removal of regulatory red tape will make contactless payments easier for the public.
The Benefits of Lifting the Limit
The FCA explained that banks and payment providers with robust fraud controls will now be empowered to determine their own contactless payment limits. This allows them to react more effectively to factors like inflation, changing consumer behavior, and the introduction of new payment technologies.
Furthermore, the FCA is encouraging banks to offer customers the ability to personalize their contactless limits or even disable the feature entirely – a capability already available with many UK high street banks.
The FCA highlighted the growing popularity of contactless payments, a trend supported by a Barclays report which revealed that nearly 95% of eligible in-store card transactions were made via contactless in 2024.
Why is This Happening Now?
Several factors contributed to the FCA’s decision:
- Increased Contactless Usage: The dramatic rise in contactless payments demonstrates consumer preference for this convenient method.
- Technological Advancements: New technologies are enhancing the security of contactless transactions.
- Inflationary Pressures: Higher prices necessitate higher transaction limits for everyday purchases.
- Competitive Landscape: Allowing banks to set their own limits fosters innovation and competition within the payment industry.
Current Contactless Limits & Potential Changes
Currently, the standard contactless payment limit in the UK is £100. However, with the FCA’s new guidance, banks can potentially raise this limit significantly. While no specific upper limit has been set, it’s anticipated that some banks may introduce limits of £250 or even higher.
| Bank | Current Contactless limit (as of Feb 2025) | Potential New Limit |
|---|---|---|
| Barclays | £100 | £250 (expected) |
| Lloyds | £100 | £150 (expected) |
| NatWest | £100 | £200 (expected) |
| HSBC | £100 | £250 ( |