When UK citizens wake up on 19 March, there will no longer be a regulation that limits how much they can spend in a single transaction on a contactless card, but changes will take time.
The Financial Conduct Authority’s (FCA) rule change on contactless payments means the £100 limit will no longer exist, allowing banks to set their own limits.
Contactless payment functionality was first introduced in 2007, with a £10 spending limit on individual payments. The limit increased gradually over time, rising from £30 to £45 in 2020 during the early stages of the pandemic, and reaching £100 in 2021.
A limit has always been in place because, unlike other two-factor authenticated contactless payments, such as Apple Pay, for which a face scan is needed, contactless cards do not verify whether the person making the payment is the card owner.
Customer flexibility
But in a letter to the prime minister in January 2025, the FCA proposed a change to contactless spending limits. It wrote that it could “remove the £100 contactless limit, allowing firms and customers greater flexibility, drawing on US experience, and levelling the playing field with digital wallets”.
In December 2025, David Geale, executive director of payments and digital finance at the FCA, said: “Contactless is people’s favoured way to pay. We want to make sure our rules provide flexibility for the future, and choice for both [finance] firms and consumers.”
But one seasoned banking IT professional, who wished to remain anonymous, questioned the logic of removing the £100 limit. “I genuinely can’t understand why anybody – customers, banks or regulators – would want to change the contactless limit. It just doesn’t make sense, and I can’t see an advantage.”
He said the use of a PIN for larger sums, which is the case today, is ideal. “I think people do generally have to remember their PIN if they’re using cards, so I can’t see who would gain from this. I can see risk being introduced, but I can’t see a change in revenue, or income, or transaction volume, or values, or anything else.”
He said there might be cases where unlimited payments are advantageous, such as for people with disabilities who are unable to type a PIN number, in which case, banks could remove the limit for individuals.
Business discretion
According to the source, banks will make a calculation before deciding what limits to set, which could mean no increase at all.
“It’s not a decision that’s made in isolation, because it depends on how good each bank is at detecting unauthorised use and who’s liable if a card is misused,” he said.
Contactless card fraud increased by 19% to 27% last year, and criminals are increasingly targeting lost or stolen cards, [hence] banks are likely to still limit contactless transactions
Chris Skinner, The Finanser
“If the bank has very strong security and can block suspicious payments, and it’s not liable for suspicious payments, they might get rid of the limit completely. Or, if they do not have such good detection systems to prevent misuse, and they’re also liable to repay customers, they might even reduce the limit to zero.”
He added that banks might let customers choose their own limits.
Chris Skinner, fintech industry expert and CEO at The Finanser, said the biggest question everyone in finance is grappling with today is fraud.
“There are rising tides of fraud in everything digital, and contactless is one key area. While total losses are relatively low – around 1.3p for every £100 spent – the volume of fraudulent cases is rising alongside increased usage. Contactless card fraud increased by 19% to 27% last year, and criminals are increasingly targeting lost or stolen cards,” he said. “This is why banks are likely to still limit contactless transactions.”
According to the British Retail Consortium (BRC), as of December 2025, 67% of credit card and 76% of debit card transactions were contactless. It said 19.2 billion contactless debit and credit card payments were made in 2025, with a total value of £311bn, and the average value of a contactless payment was just under £18.
The BRC advised members: “As the FCA noted, most banks are likely to maintain their existing contactless limits for the time being. Any changes will be communicated to customers.”
It added that changes will need to be made to card acceptance terminals and the industry rules that govern them, to allow the processing of contactless payments above £100. “This means that customers are unlikely to see any immediate change to how they currently make contactless card payments,” said the BRC.
Diane Brocklebank, executive director at the not-for-profit Payments Innovation Forum (PIF), said the risk has now shifted. “The £100 cap was a blunt tool, yes, but it was one that consumers understood,” she added.
PIF raised concerns with the FCA in October 2025, asking: “What happens when that clarity disappears – particularly for people who don’t manage their finances through a banking app, or who wouldn’t necessarily detect a fraudulent transaction until real damage was done?
“The FCA has been clear that it doesn’t expect payment service providers to rush into raising limits, and we think that caution is well-placed. For firms serving vulnerable customers – people with lower digital confidence, or those without easy access to card controls – the practical reality is that higher limits may simply not be appropriate. The Consumer Duty means those firms can’t just flip a switch and move on.”
Infrastructure investment
Monica Eaton, CEO of fintech Chargebacks911, said giving providers more flexibility reflects a market that has grown quickly and confidently. “For consumers and businesses, faster checkout is now the baseline expectation,” she said.
Every time the contactless limit has been raised, the predicted crises or waves of fraud simply never materialised. We’ve seen no fallout in the past because the industry’s fraud controls are robust, and this time will be no different. This is a natural evolution of the technology
Hannah Fitzsimons, Cashflows
But Eaton warned that the payments infrastructure must “keep pace” with the changes. “We are already seeing how frictionless payments can create more detailed and sometimes more contested disputes. That does not mean the model is flawed. It means the supporting infrastructure has to keep pace with how people actually pay today. Increasingly, AI [artificial intelligence] and machine learning are helping merchants and issuers spot risk signals earlier, organise evidence more intelligently and respond to disputes with far greater precision,” she said.
“As the FCA moves to give firms more flexibility on contactless limits, maintaining consumer trust will depend on clear safeguards and strong evidence trails. Merchants that treat transaction data as a priority now will be in a much stronger position as scrutiny around contactless continues to build,” Eaton added.
Hannah Fitzsimons, CEO of fintech Cashflows, which provides payment services to finance firms, is in support of the removal of the payment limit. “The rule change is more than a technical update, it’s a decisive step toward a pro-growth framework that trusts providers and consumers to manage their own financial lives,” she said.
“The past two decades have shown that every time the contactless limit has been raised, the predicted crises or waves of fraud simply never materialised,” she added. “We’ve seen no fallout in the past because the industry’s fraud controls are robust, and this time will be no different. This is a natural evolution of the technology.”
But she added that retaining confidence depends on “clear safeguards, effective oversight and transparency around how limits are applied”.
