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Plans to scrap the £100 contactless limit could boost revenue and innovation, but would also require investment in security and compliance.
Under the proposals, contactless card payments could even be made for unlimited amounts, bringing them into line with digital wallets.
The Financial Conduct Authority (FCA) opened a consultation on the plans on September 10, 2025, and is seeking feedback by October 15.
They are among a raft of proposals to remove restrictions on contactless payments, which the regulator believes carry a low risk of fraud.
The regulator proposes replacing contactless limits with a system where banks and other payment service providers (PSPs) process payments whenever a transaction is assessed as low risk.
The FCA acknowledged that contactless transactions also carry risks, such as fraudulent use if a card is lost or stolen. However, it noted they account for only a small share of total unauthorised fraud, and that fraud-prevention technologies are both sophisticated and improving.
In addition, many card providers already allow customers to adjust their personal contactless limits or turn off contactless functionality on their card altogether. The regulator is encouraging firms to continue offering this choice.
Right time for change
David Geale, executive director of payments and digital finance at the FCA, said smarter payment technology and well-established fraud controls mean now is the right time to let firms tailor contactless payments to customers’ needs and drive innovation.
“While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers,” Geale added.
“People are still protected; even with contactless, firms will refund your money if your card is used fraudulently.”
The FCA currently sets limits on the value and number of contactless payments that can be made before requiring authentication, typically via personal identification number (PIN) entry.
It proposes replacing these limits with a new exemption, allowing PSPs to process contactless payments without authentication in instances where they deem the risk to be low.
Under the proposed approach, PSPs would be able to set their own contactless limits, including at current levels.
Respondents to an FCA engagement paper issued in March 2025 supported introducing a new risk-based exemption for in-person transactions, saying it could reduce fraud through stronger controls on and within firms.
They noted that it would also let firms align contactless limits with their own risk appetite and reward those with low levels of fraud through increased flexibility, all while fostering technological innovation.
Respondents to the engagement paper also stressed that the risk-based exemption should not impose additional burdens or complexity on firms, such as new reporting requirements.
Payments modernisation and growth
Payments modernisation is at the heart of the UK government’s growth agenda, a project that has acquired increasing urgency as GDP has remained sluggish.
Yet ironically, at this point, the drive to sweep away restrictions on contactless payments could make the UK seem less rather than more agile.
Mobile payments, which already bypass the £100 contactless cap thanks to biometric authentication, are proving popular with all demographics and have especially high engagement rates among younger consumers.
The trend towards online and mobile transactions, where spending limits are often dictated by account balances rather than regulatory caps, suggests that physical card contactless limits may be losing relevance.
With sales increasingly taking place via digital wallets and other channels, the effect of scrapping the contactless limit on economic growth may prove limited.
Impact on payments firms
PSPs will need to ensure compliance with any new regulations arising from the removal of the contactless cap. They may also need to invest in advanced security technologies, such as real-time transaction monitoring and biometric authentication, to mitigate the risk of unauthorised transactions, meaning an increase in operational costs.
However, the removal of the cap could lead to higher transaction volumes, especially for high-value purchases. This would benefit payment processors, card networks and fintech companies by increasing their transaction-based revenue streams.
In addition, firms that can offer customisable contactless payment limits, tailored to individual customer needs, may gain a competitive edge. This flexibility could attract consumers seeking personalised payment solutions, thereby enhancing customer loyalty and satisfaction.
The impact of scrapping the £100 limit could be varied, but as the FCA considers the risk of fraud in contactless payments extremely limited, the benefits are likely to outweigh the drawbacks.
