The UK’s Financial Conduct Authority (FCA) has concluded a public consultation that may result in lifting the current £100 cap on contactless payments, potentially transforming how shoppers make everyday purchases.
This development could have a far-reaching impact on millions of customers who rely on contactless cards at supermarkets such as Tesco, Sainsbury’s, Asda, and Morrisons.
According to Birmingham Live, the proposed change is part of a broader effort to modernize payment systems and increase consumer convenience. The FCA is now assessing whether technology-based fraud prevention could allow retailers to operate without a fixed national limit.
End of the Contactless Payment Ceiling Under Review
The FCA’s review aims to modernize the framework around contactless transactions. The existing £100 limit was introduced to streamline payments while minimizing fraud risks. According to David Geale, executive director of payments and digital assets at the FCA,
Currently 85 per cent of people in the UK make contactless card payments each month. This is the perfect opportunity to explore whether we can improve and increase trust in the UK’s payments system.
The consultation considers whether more dynamic and technology-driven models could replace the fixed ceiling. Such a shift would potentially allow for a more flexible payment infrastructure aligned with modern consumer habits.
Political and Institutional Reactions
Emma Reynolds, Economic Secretary for the Labour Party, welcomed the review. She described it as a “welcome step” that could offer families “more flexibility when making purchases safely.”
Her comment reflects broader political support for measures that give consumers greater control, particularly as household spending continues to be a focal point in economic discussions.
Industry Perspectives on Fraud, Flexibility, and Autonomy
From an industry standpoint, Jana Mackintosh, managing director of payments and innovation at UK Finance, emphasized the balance between convenience and security. She stated:
Having a contactless limit is important in terms of fraud prevention, but we believe overall limits and the number of times a customer needs to enter a PIN should be determined by industry rather than the regulator.
She also noted institutional support for the FCA’s efforts, saying:
We welcome today’s announcement from the FCA seeking views on how we can improve payments.
Mackintosh added:
Banks know their customers and can strike the right balance between protecting them and giving them fast and secure payment options.
The industry’s preference is for self-regulated thresholds backed by fraud analytics and consumer behavior monitoring.
Consumer Impact and Regulatory Framework
If the current cap is lifted, the impact would be significant. It would affect millions of transactions daily, streamlining the checkout experience across the UK. Retailers and banks would gain greater autonomy to apply adaptive fraud prevention measures using technological tools.
Still, the FCA underlined that any changes must adhere to the principles of the Consumer Duty, ensuring that the outcomes serve the best interests of the public.
The proposed model would resemble that of the United States, where firms that demonstrate strong fraud controls can define their own transaction limits.
This initiative forms part of a larger drive to foster innovation within the UK’s financial services. The consultation was followed by a formal communication from FCA Chief Executive Nikhil Rathi to Prime Minister Sir Keir Starmer, outlining strategies to support digital transformation and regulatory adaptability.
