UK Allows Firms to Set Their Own Limits for Contactless Payments

The United Kingdom’s Financial Conduct Authority (FCA) said rule changes that will take effect in March 2026 will allow banks and payment service providers to set their own limits for contactless payments.

The change may make it easier for people to pay using contactless, as the rules now give these companies greater flexibility, while retaining consumer protections that require companies to reimburse consumers in unauthorized fraud cases, the FCA said in a Friday (Dec. 19) press release.

“Contactless is people’s favored way to pay,” David Geale, executive director of payments and digital finance at the FCA, said in the release. “We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers.”

The FCA currently sets limits on the value and number of contactless payments that consumers can make before authentication, such as a PIN entry, is required.

The regulator proposed removing the current 100-pound (about $134) contactless limit in January, saying the change would allow firms and customers greater flexibility and level the playing field with digital wallets.

It began seeking public comment on the proposal in March after releasing an engagement paper that outlined several ways the FCA could alter its approach to contactless payment limits.

“We’ve worked fast to progress this work, which is one of around 50 measures we put forward at the start of the year to help support economic growth across the U.K. and, in turn, improve lives,” Geale said in a March press release.

After reviewing the feedback it received during the public comment period, the FCA said in September, “we considered that firms have clear incentives to minimize contactless payment fraud and should have more choices available to them in how they achieve that. As part of our work to become a smarter regulator, we believe that this is an area where overly restrictive regulations are not necessary to deliver good outcomes.”

In its Friday press release, the FCA said that based on industry feedback, it expects most banks and payment service providers to maintain their existing contactless limits for some time after the changes are implemented.