The UK government has praised the Financial Conduct Authority’s (FCA) invite for feedback on removing the £100 contactless limit.
In January, the financial watchdog trialled the removal of a maximum spending limit of £100 on contactless payments. The regulator is now asking for feedback.
David Geale, Executive Director of Payments and Digital Assets at the FCA, said: “Currently 85% of people in the UK make contactless card payments each month. This is the perfect opportunity to explore whether we can improve and increase trust in the UK’s payments system.
“We’ve worked fast to progress this work which is one of around 50 measures we put forward at the start of the year to help support economic growth across the UK and, in turn, improve lives.”
The UK is currently undergoing significant regulatory reform, with Prime Minister Keir Starmer aiming to promote growth. This has led to the Payment Systems Regulator (PSR) being combined with the FCA, while Starmer himself has become more critical of the work some regulators are doing.
According to the FCA, its review of the £100 contactless limit is intended to give consumers more flexibility while also providing merchants with greater control. The limit has been inreased before, rising from £45 in 2021
It remains undecided whether the £100 contactless payment limit will be kept or permanently removed. However, the FCA has acknowledged one suggestion: adopting a model similar to the US, where merchants can set their own limits.
The original £100 limit was introduced to help prevent fraud. Since contactless payments can be accessed through a card or mobile phone, a limit reduces potential damage in the event of theft. Despite this, the government seems to be leaning toward removing the limit.
Economic Secretary to the Treasury, Emma Reynolds, added: ”Every regulator has a part to play in the collective mission to drive growth through our Plan for Change, which puts more money into working people’s pockets.
“The FCA’s review of the contactless payment limits, including removing the £100 limit on individual payments, is a welcome step to ensure that families can safely benefit from more flexibility when making purchases.”
