Plans Could Allow Unlimited Contactless Card Payments
The Financial Conduct Authority proposes letting banks and providers set their own limits, potentially removing the £100 cap on contactless transactions and reducing the use of PINs.
Contactless card payments could soon exceed £100, or even become unlimited, under new proposals from the Financial Conduct Authority (FCA) that would allow banks and other providers to set their own limits.
The move aims to align contactless cards with smartphone digital wallets, which currently have no transaction cap, reflecting evolving consumer payment habits.
History of Contactless Limits
Since their 2007 debut with a £10 limit, contactless payments have risen to £15 in 2010, £20 in 2012, £30 in 2015, £45 in 2020 and £100 in 2021. If approved, providers could raise or remove the limit early next year.
Fraud Protections and Consumer Safeguards
Despite concerns about theft and fraud, the FCA says providers must only allow higher-value transactions that pose low risk, using advanced fraud prevention systems. Consumers would still be protected and reimbursed for unauthorized transactions.
Moreover, banks could give customers the option to set their own contactless limits or disable the feature entirely.
Industry and Public Reactions
While 78% of consumers in an FCA consultation opposed changing the limits, banks welcome the flexibility as technology advances and prices rise. Retailers must also update payment terminals currently programmed to reject card transactions over £100.
Experiences from Shoppers
Some customers, especially younger ones, already rely on mobile payments secured by biometrics and view the convenience as essential. Others appreciate entering a PIN as a budgeting tool and for added security.
Retailers say simplifying payments can boost sales, but they worry about liability if fraud occurs.
Boosting the UK Economy
The FCA’s proposal responds to government calls to remove barriers to economic growth, joining countries like Canada and Australia that let industry set contactless limits. The consultation closes on 15 October.
Allowing providers to raise or remove contactless limits could streamline payments and phase out PIN requirements, provided robust fraud safeguards remain in place.
This topic was reported by BBC News.
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