The UK’s financial watchdog has decided to scrap the £100 limit on contactless card payments, allowing banks and payment companies to set their own limits instead. The change, announced by the Financial Conduct Authority (FCA), will come into force in March 2026.
Under the new rules, banks can raise or keep contactless limits as they see fit, as long as they have strong systems in place to stop fraud. Customers will also get more control, including the option to turn contactless payments off completely if they want to.
The FCA says the decision was motivated by how people now pay for things and is meant to update the payments system without reducing protections for consumers.
Contactless payments are now the most common way to pay in shops across the UK. Figures from Barclays show that in 2024, around 95% of in-person card payments were made using contactless, up from 87% just two years earlier. Many businesses have argued that the £100 cap, last raised in 2021, no longer made sense as prices have gone up, especially in places like supermarkets, pubs, and restaurants.
The decision follows a public consultation held earlier this year and fits with wider government efforts to modernise digital payments. In a letter sent to the Prime Minister in January, the FCA outlined dozens of proposals aimed at boosting economic growth, with payments reform high on the list.
Banks will not be forced to increase their limits. But those that do will need to show they can manage the extra risk, using tools such as real-time fraud checks, location data, and spending pattern analysis. Importantly, existing legal protections stay in place. If a card is lost or stolen and used without permission, customers are still entitled to a full refund under current law, and the bank remains responsible.
Similar systems already exist in other countries. Canada and Australia, for example, allow banks to adjust contactless limits depending on the situation. The European Union still sticks to a €50 limit, although banks there can set lower limits if they choose.
Businesses have mostly welcomed the change. UKHospitality, which represents pubs, restaurants and hotels, said higher limits could mean shorter queues and smoother payments. Major banks like NatWest and Barclays already let customers manage contactless settings through their apps, suggesting much of the technology is already in place.
Consumer groups have also sounded a note of caution. Rocio Concha, director of policy and advocacy at Which?, said that while some shoppers may welcome the added convenience of higher or more flexible contactless limits, many others are likely to be concerned about the risk of scams. She warned that fraudsters would “inevitably” try to exploit the changes, stressing that regulators and the payments industry must work closely together to ensure fraud controls are properly applied and consumers are adequately protected.
There are also wider concerns about fairness. Digital-only banks and fintech firms, which rely heavily on real-time data, may be able to offer higher and smarter limits. Older high-street banks, still using legacy systems, could fall behind, potentially widening gaps in the banking market.
While the Bank of England did not set the rules, it has previously warned about the risks of relying too heavily on automated systems. In a 2024 report, it noted that if fraud detection tools become too concentrated or overly complex, failures could have serious knock-on effects.
The FCA says it will keep a close eye on how the new system works in practice, especially when it comes to fraud levels and customer complaints. If problems emerge, the rules could be reviewed again.
