UK to Remove Around USD134 Contactless Payment Cap
The FCA stated on Friday that beginning March 19, banks and card issuers will be permitted to establish their own maximum limits for contactless purchases.
At present, card-based contactless payments are restricted, whereas mobile phone transactions are not subject to the same cap. Additionally, there is a cumulative threshold of £300 or five consecutive contactless payments, after which customers must input their PIN.
Under the revised framework, providers will have the option to eliminate this restriction entirely.
The regulator explained that these adjustments are intended to help financial institutions adapt to evolving consumer preferences, inflationary pressures, and technological advancements. It also emphasized that customers should retain the ability to set personal limits or disable contactless payments altogether.
In the immediate future, the FCA expects most institutions to maintain their existing restrictions.
Contactless payments were first introduced in 2007 with a £10 limit, which has steadily increased over time. The threshold was raised to £45 during the COVID-19 pandemic in 2020 and later to £100 in October 2021. A consultation on the latest modifications was conducted earlier this year.
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