Contactless card payments to see major change in just months - what does it mean for you

From March 2026, bank, building society and card providers will have the power to set a new maximum or unlimited single payment amount without the requirement to enter a four-digit PIN code.

However, the FCA is urging banking groups and financial institutions to permit cardholders to set their own individual limits, or turn off contactless entirely.

It should be noted that some banks already offer customers the opportunity to do this, but they are not legally obligated to do so.

This latest move from the FCA comes after the regulator's own survey found little demand among customers and the banking industry to change the current £100 contactless card limit.

Notably, the FCA shared it did not expect card providers to make immediate changes to the current threshold from next March, however they will now have the more flexibility to do so.

Initially, the contactless card payment limit was set at £10 when introduced in 2007 but was gradually raised over the years when it become more popular.

The limit jumped to £15 in 2010, to £20 in 2012, then to £30 in 2015. The Covid-19 pandemic saw the threshold increase to £45 in 2020, rising to the current £100 in October 2021.

Despite contactless cards having a £100 payment limit, Britons who pay using their smartphone to pay can spend any amount without the need for a PIN code.

Analysts cite in-built security features in phones, including thumbprints and face ID, as providing greater security for consumers.

However, there has been growing concerns over contactless payments being more attractive to scammers and fraudsters who can make expensive payments with a stolen card.

Under current consumer protection laws, Britons would still get their money back if their card was stolen by a scammer up to a certain amount.

David Geale, the executive director of payments and digital finance at the FCA, shared: "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."

In other countries, including Canada, New Zealand and Australia, the banking industry is allowed to set its own contactless card limits.

Jana Mackintosh, managing director of payments and innovation at industry body UK Finance, said: "Any changes made in the future will be done carefully and ensure strong security and fraud controls remain in place."

Jana Mackintosh, managing director of payments and innovation at UK Finance, said: “We welcome the FCA’s move to give banks and payment providers greater flexibility over contactless limits in the future. Contactless is a very popular and secure way to pay.

"While we do not expect to see any immediate change to the £100 contactless limit, any changes made in the future will be done carefully and ensure strong security and fraud controls remain in place."