FCA Considers Scrapping Contactless Card Payment Limit

The Financial Conduct Authority (FCA) is reviewing the contactless card payment limit in the United Kingdom. The rule currently stops customers from using contactless payments for amounts over £100. The FCA said it wants to know if changing this rule could help the economy. The regulator is now asking the public to share their opinions.

FCA Hopes To Support Businesses And Families

The FCA sent a letter to Prime Minister Keir Starmer in January. In the letter, it talked about removing some rules that may not be needed. It said these changes could help the UK economy grow. The contactless payment limit is one of the rules the FCA is looking at.

The regulator said most adults in the UK use contactless payments often. According to the FCA, 85% of adults in the country use contactless cards every month. It added that changing the rules could give businesses and families more flexibility when they pay for goods and services.

Some financial experts support the idea of raising the limit. The founder of fintech company Pockit and Monese leader, Virraj Jatania, said increasing the limit in a responsible way could be good for the economy. He explained that it could benefit both consumers and businesses.

However, Jatania warned that security measures must be strong. He said fraud protection is very important, especially for customers who are financially vulnerable. He also noted that most fraud happens online, but theft and impersonation in stores still remain a problem.

Government Supports FCA’s Plans

Economic Secretary to the Treasury, Emma Reynolds, commented on the review. She said that every regulator has a role in helping the UK economy grow. She stated that the government’s Plan for Change is focused on putting more money in working families’ pockets.

Reynolds added that the FCA’s review of the contactless payment limit is an important step. She said that removing the £100 limit on single payments could give families more flexibility. However, she also said that safety should remain a top priority.

The FCA said it will accept feedback from the public until May 9. The regulator is asking for views on whether removing the £100 limit is a good idea. It also wants to know what changes would be best for businesses and customers.

The FCA review comes after the government announced changes to the Payment System Regulator (PSR). On Tuesday, Prime Minister Keir Starmer and Chancellor Rachel Reeves said the PSR would be removed. Its duties will now be handled by the FCA.

This is part of the government’s plan to simplify financial regulations. The goal is to improve efficiency and make it easier for businesses and consumers to manage payments. The FCA will continue reviewing rules and making adjustments that could help the economy.