UK Banks Get Freedom to Set Higher Contactless Limits
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The UK financial regulator, the Financial Conduct Authority (FCA), announced last Friday, December 19, that it will grant greater flexibility to the country’s banks when it comes to setting future contactless limits.
The announcement said that people could find it easier to pay using contactless thanks to the removal of red tape by the FCA.
The Benefits Of Lifting The Limit
Explaining the decision, the country’s financial watchdog said that banks and payment providers with strong fraud controls will now be able to set their own limits for contactless payments. That way, they will be able to better respond to changing consumer demands, inflation, and new technology.
Furthermore, they are also being encouraged to let customers choose their own limits, or even turn contactless off altogether, which is already the case when it comes to many high street banks in the UK.
Right now, people are using contactless as the go-to way to make payments, the FCA said. This was also backed by a report published by Barclays, which conducted research that found that almost 95% of all eligible in-store card transactions were contactless in 2024.
The FCA noted that banks and payment providers need to have strong fraud controls in place when processing contactless transactions. However, they also noted that greater flexibility will incentivise firms to step up their fraud prevention, which will give consumers greater protection and peace of mind.
User Protections Must Stay In Place
The crucial thing, according to the regulator’s statement, is for existing consumer protections to remain in place. Consumers must be reimbursed in unauthorized fraud cases, including situations where their cards get lost or stolen.
FCA’s executive director of payments and digital finance, David Geale, commented on the matter, saying that contactless payments are the way people prefer to pay for their purchases.
“We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers,” he noted.
Meanwhile, the chair of UKHospitality, Kate Nicholls, also commented by saying: “Making life easier for consumers is a positive for any hospitality and high street business, and I’m pleased the FCA is bringing forward this change.”
Nicholls went on to say that 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. For now, many still prefer to use cash or chip and PIN, but this change could add some much-needed flexibility for both providers and consumers.
