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According to the FCA, consumers are using contactless as the go-to way to pay. Research by Barclays found that almost 95% of all eligible in-store card transactions were contactless in 2024.
Back in September we wrote that the FCA was consulting on removing regulatory contactless limits and instead allowing banks and other payment service providers to deliver contactless payments if they identify that a transaction poses a low level of risk.
It has now announced the outcome of the consultation. Banks and payment providers with strong fraud controls will be able to set their own limit for contactless payments.
They are also being encouraged to let customers set their own limit, or turn contactless off altogether, as many high street banks already do.
Banks and payment providers must have strong fraud controls when processing contactless transactions. The FCA thinks that the greater flexibility will be an incentive for firms to improve their fraud prevention.
Existing consumer protections remain in place. Consumers must be reimbursed in unauthorised fraud cases, such as if their card is lost or stolen.
The rule changes take effect in March 2026, after which it will be up to firms if and when they take up the greater flexibility to change any contactless limits. Based on industry feedback, the FCA understands that most banks and payment service providers are likely to maintain their existing contactless limits for the foreseeable future, even after the changes come in. However, those who do make changes, will need to communicate them clearly to their customers under the Consumer Duty.
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