Britain’s financial regulator is considering sweeping changes to contactless payments that could see the £100 limit scrapped.
The Financial Conduct Authority (FCA) has launched a consultation, running until October 15, on whether banks and card companies should be allowed to set their own contactless spending limits.
Banks and card providers may soon be allowed to set their own thresholds, in what would be the biggest shake-up of tap-and-go spending since its launch.
An FCA paper earlier this year revealed that many in the industry want the current cap lifted from £100 to somewhere between £150 and £250.
The regulator says this would give banks more flexibility to update limits in future as technology improves and prices rise.
For now, no changes are expected immediately. Customers using Apple Pay or Google Wallet can already spend above £100 by verifying transactions with a fingerprint, face scan or passcode.
The FCA admits higher limits could mean more fraud, but points to stronger security checks and smarter systems that are designed to spot suspicious activity.
David Geale, the FCA's executive director of payments and digital finance, stated: "While we wouldn't expect to see immediate changes to the limits by firms, they would have the flexibility to make payments more convenient."
The regulator emphasises that existing consumer safeguards would remain intact, with cardholders receiving full reimbursement for any fraudulent activity on their accounts.
Many retailers have all launched card-only retail outlets | PA"People are still protected. Even with contactless, firms will refund your money if your card is used fraudulently," Mr Geale confirmed.
Currently, shoppers are asked to enter their PIN if they’ve spent more than £300 through contactless in a row, or after five quick tap payments.
The FCA says banks would only be allowed to raise limits if they can prove their fraud checks are strong enough to keep transactions safe.
Most banks already let customers lower their contactless limit below £100, or switch the feature off completely. The regulator expects these personal controls to be offered across the board.
Customers using Apple Pay or Google Wallet can already spend above £100 by verifying transactions with a fingerprint, face scan or passcode
| GETTYIf the rules change, shops and businesses across the UK would need to update their card machines, since they currently decline payments over £100.
The FCA says raising the limit could make checkouts faster and reduce the hassle of paying, while also reflecting the fact that prices have risen since the £100 cap was introduced.
However, any increase would only go ahead if banks and payment providers can show they have strong enough fraud protections in place to keep customers safe.
£100 limit could be scrapped
| PAThe consultation period extends until mid-October, after which the FCA will review submissions before determining whether to proceed with the proposed flexibility for financial institutions.
Contactless cards now make up the majority of in-store card transactions in the UK, with usage continuing to grow each year.
Payments are processed in just a few seconds, making it one of the quickest and most convenient ways to pay. The system also uses the same secure encryption as chip and PIN, meaning customers remain protected in the event of fraud.