£100 contactless card limit to be lifted

Millions of people will be able to set their own contactless card payment limits or even have no limit at all, a regulator has confirmed.

Banks and card providers will be given the power, from March, to set a maximum - or unlimited - single payment amount without the need to enter a four-digit PIN.

But they are also being encouraged by the Financial Conduct Authority (FCA) to allow cardholders to set their own individual limits, or switch off contactless entirely. Some banks already offer this function.

The move comes despite the FCA's own survey showing little appetite among consumers and industry respondents for a change from the current £100 limit on contactless cards.

The FCA said it did not expect card providers to make immediate changes to the current limit from March, but they had the flexibility to do so.

When contactless card payments were introduced in 2007, the transaction limit was set at £10. The limit was raised gradually, to £15 in 2010, to £20 in 2012, then to £30 in 2015, before the Covid pandemic prompted a jump to £45 in 2020, then to £100 in October 2021.

While contactless cards currently have a £100 payment limit, anyone using their smartphone to pay can spend any amount without the need for a PIN.

In-built security features, such as thumbprints and face ID, provide greater protection.

The FCA's own survey on changing the rules, released during consultation, showed that 78% of consumers who responded said they did not want any change to the current limits.

Consumers and academics have suggested that the extra convenience of unlimited contactless payment limits could also lead to shoppers spending without thinking.

This is said to be a particular issue with credit cards, when people are spending borrowed money and accumulating debt.

Financial abuse charities have also warned that unlimited contactless spending could give abusers free access to drain a survivor's bank account with no checks or alerts.

They also worry it could also hasten the shift towards a cashless society, despite notes and coins being a lifeline to many financial abuse survivors whose card transactions are monitored online by their abusers.

One policy to help vulnerable customers access cash, as bank branches close, is the development of shared banking hubs.

Cash Access UK, the organisation set up to protect access to cash across the UK, announced the official opening of its 200th banking hub in Billericay, Essex, on Friday.

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