Proposed contactless changes could help customers

The Financial Conduct Authority (FCA) is consulting on proposals to give card providers the flexibility to decide what contactless limit would be most suitable for their customers, which could bring greater convenience to people making larger purchases. Many card providers already offer the ability to adjust a personal contactless limit, or to turn off contact functionality for a customer’s card, and the FCA is encouraging more card companies to offer this choice. David Geale, Executive Director of Payments and Digital Finance at the FCA, said: “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. 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. “People are still protected; even with contactless, firms will refund your money if your card is used fraudulently.”

Are contactless protections the same as regular card payments?

Contactless payments have the same protections as other card payments, so customers will be reimbursed by banks and payment firms if they are the victim of unauthorised fraud. This would include if someone’s card has been lost or stolen and is used by someone other than the cardholder. UK Finance’s Annual Fraud Report 2025 estimates that contactless fraud currently runs at around 1.3p per £100 spent via contactless payments, while traditional payments run at 6p per £100 spend for all unauthorised fraud. The current limit for most contactless payments is £100, and many card providers are expected to keep this limit, even if the consultation response suggests a higher limit could be more appropriate.

When does the consultation end?

Responses to the consultation should be returned to the FCA by October 15, but the FCA has already had nearly 1,300 responses to the contactless payments Engagement Paper. This is one of around 50 measures outlined in a letter to the Prime Minster in January, which are designed to support economic growth and prioritise digital solutions. The FCA Quarterly Consultation Paper states: “Currently, the FCA sets regulatory limits on the value and number of contactless payments that can be made before requiring authentication, typically via a personal identification number (PIN) entry. These requirements are set out in an exemption to the Strong Customer Authentication (SCA) requirements in the Payment Services Regulations 2017 (PSRs), within the Strong Customer Authentication Regulatory Technical Standards (SCA-RTS) (see ‘Current regulatory framework’). “We propose to replace these regulatory limits with a new exemption, which would allow [Payment Services Providers (PSPs)] to process contactless payments without asking the payer to authenticate the payment, where PSPs identify the risk of a transaction to be low. It is important to note that under the proposed approach, and subject to compliance with all requirements under the rule, PSPs will be able to set their own contactless limits, including at current levels. We will continue to monitor and supervise firms to ensure they are achieving good outcomes, such as low levels of fraud, under the new exemption.”

We can help you meet your obligations

If you or your business wants to find out more about how any new contactless payment limits might affect you, then please get in touch and we would be happy to give you the guidance you need.