The Financial Conduct Authority (FCA) is contemplating a significant shift in the UK’s payment landscape by proposing the removal of the current £100 limit on contactless card transactions. This move aims to provide consumers and businesses with greater flexibility and align the UK with countries like the United States, where such limits are not imposed.
Contactless payments have become an integral part of daily life in the UK, with 85% of people using them each month. The convenience of tapping a card or device to make a payment has led to a surge in usage. More businesses and services, from retail to hospitality, are adapting to meet this demand, making contactless payments nearly ubiquitous. The limit was last increased in October 2021 from £45 to £100, reflecting the growing reliance on this payment method.
The surge in contactless payments isn’t limited to in-store purchases. Online platforms like streaming services and gaming platforms across the globe, have also capitalised on the ease and security of these payment methods. For instance, players at the best UK non GamStop casinos enjoy a wide range of payment options that include not just traditional cards but also digital wallets and other contactless methods. These casinos know the value of smooth transactions: they offer fast and secure deposits, easy withdrawals, and seamless account management, all of which appeal to users looking for convenience and reliability. This adaptability shows how digital payment flexibility has become essential across industries, from entertainment to shopping.
The FCA’s proposal is part of a broader initiative to update the UK’s payment system and stimulate economic growth. By removing the cap, the FCA believes it can enhance consumer choice, promote innovation in payment methods, and provide businesses with more control over transaction processes. This approach is similar to the US model, where firms with fraud controls set their own limits.
However, the proposal has created a debate over potential risks. Critics argue that eliminating the limit could increase vulnerability to fraud and overspending. In 2023, fraudulent contactless spending in the UK totalled £41.5 million, a 19% increase from the previous year. While this is a small fraction of overall contactless transactions, concerns remain about the potential for higher losses if cards are lost or stolen. The FCA has assured that existing consumer protections, including reimbursement for unauthorised transactions, will remain in place.
Another concern is the impact on vulnerable populations, such as the elderly and those reliant on cash. As the UK moves toward a more digital economy, there’s a risk that these groups could be left behind. Campaigners have warned that reducing the emphasis on cash could marginalise individuals who are less comfortable with or have limited access to digital payment methods.
Despite these concerns, many retailers support the potential change, citing benefits like reduced queue times and enhanced customer experience. The Treasury has also expressed support, viewing the proposal as a step toward providing families with more flexibility and aligning with the broader “Plan for Change” to drive economic growth.
The FCA’s consultation on this proposal closed on 9 May 2025, and a decision is expected later in the year. If implemented, the change could significantly alter payment behaviours, making transactions faster and more convenient. However, it also necessitates a careful balance between embracing innovation and ensuring robust consumer protections.
As the UK stands at this crossroads, the decision to remove the contactless payment limit will have far-reaching implications. It represents a move toward a more flexible and modern payment syste,m but also underscores the need to address potential risks and ensure inclusivity for all consumers.
