Contactless card payments in the UK are on the brink of a major transformation, as the Financial Conduct Authority (FCA) has proposed new rules that could see the current £100 transaction cap lifted—or even scrapped entirely. If these changes go ahead, shoppers may soon find themselves able to pay for everything from a weekly supermarket haul to a new television with just a tap, no PIN required.
On September 10, 2025, the FCA announced its intention to let banks and payment providers set their own contactless limits, a move that could make the notion of a maximum spend per tap a thing of the past. According to The Independent, this proposal is part of a broader effort to reduce financial regulation and stimulate economic growth, echoing calls from the Prime Minister for regulators to remove barriers that might be holding back UK businesses.
David Geale, executive director of payments and digital finance at the FCA, explained the rationale behind the shift: “We’re seeing smarter payment technology and more well-established fraud controls, so it’s the right time to let firms tailor contactless payments to fit their customers’ needs and drive innovation. While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers.”
Contactless payments have come a long way since their introduction in 2007, when the limit was set at just £10. Over the years, the cap has risen gradually—to £15 in 2010, £20 in 2012, £30 in 2015, then £45 during the Covid-19 pandemic, and finally £100 in October 2021, as reported by BBC News. Each increase has brought concerns about fraud and theft, but the FCA maintains that robust protections remain in place for consumers. “People are still protected. Even with contactless, firms will refund your money if your card is used fraudulently,” Geale reiterated in statements featured by multiple outlets.
Indeed, the FCA has emphasized that banks and payment firms are required to reimburse customers for unauthorised fraud cases, such as when a card is lost or stolen. UK Finance’s Annual Fraud Report 2025 estimates that fraud rates for contactless payments are notably low—around 1.3p per £100 spent—compared to 6p per £100 for all unauthorized fraud. This relatively low risk is a key factor in the FCA’s confidence that higher or unlimited limits can be managed safely, provided that banks and providers implement strong fraud prevention systems.
Despite these assurances, the FCA’s own analysis acknowledges that raising the limits would likely result in some increase in fraud losses. However, the agency argues that detection is improving and will continue to do so, especially as providers invest in advanced real-time monitoring and behavioral analytics. According to Susannah Streeter, head of money at Hargreaves Lansdown, “There is the potential for increased fraud, but consumers will still have their money protected in the same way, when flagged to a bank. It’s the merchants who ultimately pay the price for fraudulent transactions, via the Chargeback process. So, investment in more advanced detection and prevention methods will be even more crucial, including real time monitoring and behavioural analytics to mitigate risks.” Streeter also noted that while larger retailers may be able to invest in such technologies, small businesses could be more cautious about waving through big payments without extra checks.
Currently, several safeguards are in place to limit risk. For instance, many banks require a PIN if a series of contactless transactions exceeds £300, or after five consecutive taps. Some banks even allow customers to set their own contactless limits below £100, or to switch off contactless payments entirely. The FCA expects this flexibility to become more widespread if the new rules are adopted.
The proposed changes come at a time when the way people pay is already shifting rapidly. Smartphones, which use biometric security such as thumbprints or facial recognition, have no spending limits for digital wallet transactions. According to industry research cited by BBC News, nearly three-quarters of 16 to 24-year-olds regularly use mobile payments. For many, especially younger consumers, carrying a physical card is increasingly unnecessary. As 24-year-old Demi Grady put it, “I was in London the other day, my phone died and I couldn’t pay for stuff because I couldn’t remember my card details.”
Not everyone is convinced that removing the cap is a good idea. The FCA’s own consultation found that 78% of consumers who responded preferred to keep the current limits. Some, like Carrie Grady, worry that higher or unlimited limits could make theft or fraud more damaging. “It would worry me more than be of benefit if they were to lose the limit of £100,” she told BBC News. Others, like Robert Ryan, appreciate the existing prompts to enter a PIN as a way to keep spending in check: “I feel more secure in what I’m buying and it does give me a bit of a prompt to make sure I’m not overspending on my tap-and-go.”
Retailers, too, have a stake in how the rules evolve. Richard Staplehurst, owner of Harveys Menswear in Sevenoaks, noted that most of his customers now pay via device, and removing obstacles to payment can be a boon for business. However, he also expressed concern about being held responsible for fraudulent transactions.
The FCA’s consultation on the proposals will run until October 15, 2025, with a decision and potential implementation expected early next year. If approved, payment terminals across the country would need to be reprogrammed, as most are currently set to refuse card payments over £100. While the FCA does not anticipate immediate changes, it expects banks and providers to gradually adjust their offerings as technology advances and prices rise.
Internationally, the UK’s move would bring it in line with countries like Canada, Australia, and New Zealand, where contactless payment limits are set by industry rather than regulators. The FCA hopes that greater flexibility will reduce “payment friction,” make transactions more efficient, and help stimulate economic growth—a priority as the UK faces ongoing economic challenges and strives to boost consumer spending.
Ultimately, the future of contactless payments in the UK will depend not just on regulatory decisions, but on how banks, retailers, and consumers navigate the balance between convenience and security. For now, the debate continues, with the promise of a more seamless, tap-and-go future just around the corner.
