This news comes after the UK regulator set out plans to accelerate digital innovation, reduce regulatory burden and support economic growth in response to Prime Minister Keir Starmer's letter in January 2025. This, in turn, followed Joe Garner's Future of Payments Review in 2023 where opportunities for optimising the UK consumer experience for in-person spending, such as eliminating the occasional PIN prompt, were explored. The UK Government's National Payments Vision policy paper also bolstered views on the lack of flexibility of contactless limits and introduced commitments to revoke payments authentication regulations related to Strong Customer Authentication (SCA) in the Payment Services Regulations (PSRs). In March 2025, the FCA asked for views on removing the £100 contactless limit and whether families and businesses across the UK would benefit from benefits such as greater choice, flexibility and smoother purchases. Canada, Australia and New Zealand currently allow the industry to set contactless card limits. Despite the 2025 survey revealing minimal desire from consumers and industry leaders to change the contactless limit, bank and card providers will be permitted to set a maximum, set an unlimited single payment amount without the customer needing to enter a PIN, or turn the contactless option off altogether. On this announcement, the FCA has said that the "greater flexibility will incentivise firms to step up their fraud prevention, giving consumers greater protection and peace of mind. Crucially, existing consumer protections remain in place. Consumers must be reimbursed in unauthorised fraud cases, such as if their card is lost or stolen." In line with Consumer Duty - the governance of products and services, price and value, consumer understanding and consumer support - the FCA makes clear that firms will need to communicate any contactless limit change to consumers. However, the regulator also states that industry feedback has revealed to them that "most banks and payment service providers are likely to maintain their existing contactless limits for the foreseeable future, even after the changes come in." Consumers are able to spend any amount through mobile payments without the need for a PIN. Security features such as thumbprints and face ID have provided greater protection, but concerns remain about thieves and fraudsters being able to make high-value payments with just a tap of a card. David Geale, executive director of payments and digital finance at the FCA, said: "Contactless is people’s favoured way to pay. We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers."
By on 2025-12-19 08:00:00
Original link