The Financial Conduct Authority (FCA) will give banks and payment providers greater freedom to set contactless card payment limits from March 2026.

The FCA said that the move would enable firms with strong fraud controls to tailor thresholds and, where appropriate, allow customers to set their own caps or turn contactless off entirely.

The regulator stressed that core consumer protections will remain in place, with refunds required in cases of unauthorised fraud. In guidance, the FCA said the flexibility is intended to help firms respond to changing consumer behaviour, inflation and technology, though it does not expect immediate changes to the current £100 single-transaction limit. The FCA added that, based on industry feedback, most providers are likely to maintain existing limits for the foreseeable future.

“Contactless is people’s favoured way to pay,” said David Geale, executive director of payments and digital finance at the FCA. “We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers.” He also noted that people remain protected, with firms refunding money if a card is used fraudulently.

Usage has continued to rise. Research from Barclays found that almost 95 per cent of eligible in-store card transactions were contactless in 2024, with monthly volumes far higher than in 2015.

Physical cards are currently capped at £100 per transaction and subject to cumulative checks, typically £300 or no more than five consecutive taps before strong customer authentication is required. Under the new approach, firms will have the scope to review those cumulative controls as well.

Industry groups signalled support for cautious implementation. 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.”

Kate Nicholls, chair of UKHospitality, said: “Making life easier for consumers is a positive for any hospitality and high street business, and I’m pleased the FCA is bringing forward this change. Contactless has increasingly become the preferred payment method of choice for many people and lifting the limit can mean quicker and easier experiences for consumers.”

The FCA acknowledged concerns about overspending and financial abuse raised during consultation, and said firms will need clear communications and robust safeguards when making any adjustments. Consumers will continue to have options to manage their risk, including setting individual limits or switching contactless off.

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