Contactless card limit to rise

The £100 cap on contactless card payments is to be lifted – under changes that will allow some shoppers to set their own limits.

Under the plans, from the Financial Conduct Authority (FCA), banks and other card providers with strong fraud controls will be able to set their own rules for such transactions from 19 March. They are also being encouraged to let consumers set their own limits or be granted the ability to turn off contactless payments altogether, as many banks already do.

The shake-up aims to make it easier for shoppers to pay larger sums by tapping their card without using a pin code. Money latest: HMRC urges workers to check payslips over festive season The current rules set the limit for contactless card payments at £100 per transaction.

The FCA said the method had become consumers' preferred way to pay. It hopes that the greater flexibility will "incentivise firms to step up their fraud prevention, giving consumers greater protection and peace of mind".

The reforms will also allow firms to better respond to changing consumer demands, inflation and new technology, the regulator said. The popularity of paying with the tap of a card has surged in recent years.

Consumer spending data from Barclays showed that 94.6% of eligible in-store card transactions were contactless in 2024. There were also 10 times more contactless transactions per month last year than there were in 2015, the bank said.

Changes to such limits were among about 50 proposals suggested by the regulator in a letter to Prime Minster Sir Keir Starmer in January after the government asked for ideas to boost economic growth. Changes 'make life easier for consumers' David Geale, the FCA's executive director of payments and digital finance, said: "Contactless is people's favoured way to pay.

We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers." Kate Nicholls, chairwoman of UKHospitality, said: "Making life easier for consumers is a positive for any hospitality and high street business. "Contactless has increasingly become the preferred payment method of choice for many people, and lifting the limit can mean quicker and easier experiences for consumers." Read more from Sky News:WH Smith faces watchdog probeRetailers rues tough Black Friday Ms Nicholls added: "While many people still prefer to use cash or chip and pin, this change adds much-needed flexibility for providers and consumers." Jana Mackintosh, from industry body UK Finance, also backed the reforms.

She said: "Contactless is a very popular and secure way to pay. "While we do not expect to see any immediate change to the £100 contactless limit, any changes made in the future will be done carefully and ensure strong security and fraud controls remain in place." Under current rules, banks and card providers also impose a £300 cumulative limit for contactless transactions, with the number of tap-only payments capped at five consecutively.

Firms will have the scope to change the cumulative cap as well under the shake-up. The FCA said existing protections would remain in place, requiring banks to reimburse consumers in unauthorised fraud cases, such as if their card is lost or stolen..