FCA Allows Banks to Set Own Contactless Payment Limits

The Financial Conduct Authority has announced plans to allow UK banks and payment providers to set their own limits for contactless card transactions, potentially enabling shoppers to make larger payments without entering a PIN. The changes, aimed at providing greater flexibility amid rising consumer demand, will take effect on March 19, 2026.

Under the current rules, contactless payments using physical cards are capped at £100 per transaction. Users can make multiple such payments in a day, but if the total exceeds £300 or reaches five consecutive transactions since the last PIN entry, authentication is required. The new regulations will permit firms with robust fraud controls to adjust these thresholds, including the cumulative limits, as they see fit. Providers must clearly communicate any alterations to customers and are encouraged to offer individuals the option to personalize their limits or disable contactless functionality entirely. Many banks already provide these customization features.

The reforms stem from a broader review of financial regulations to support economic growth, following a government directive issued on December 24, 2024. In January, the FCA outlined...