£100 contactless card limit to be lifted

According to a regulator, millions of people will be able to set their own contactless card payment limits or even have no limit at all. From March, bank and card providers will be able to set a maximum - or indefinite - payment amount without having to enter a four-digit PIN. However, the Financial Conduct Authority (FCA) is also encouraging cardholders to set their own personal limits or completely ban contactless. Some banks already offer this function. Despite the FCA's own study revealing little interest among consumers and industry stakeholders for a change from the current £100 limit on contactless cards to the new £100 minimum.

The FCA said that it did not expect card providers to make immediate updates to the new limit from March, but that it had the ability to do so. The transaction ceiling was set at £10 when contactless card payments were first introduced in 2007. The limit was gradually increased from £15 in 2010 to £20 in 2012, then to £30 in 2015, before the Covid pandemic boosted a jump to £45 in 2020 and then to £5 in October 2021.

Although contactless cards now have a £100 payment limit, anyone using their smartphone to pay can still spend any amount without having to enter a PIN. Fingerprints and face ID are among the in-built security features that provIDe greater security.

However, worries have been raised over cards becoming more popular among robbers and fraudsters, especially when high-value payments can be made with a swipe of a card. Following a string of consecutive contactless transactions, a variety of safeguards are now in place, including a prompt to enter a PIN. According to David Geale, executive director of payments and digital finance at the FCA, consumers would still get their money back if it was stolen by fraudsters.

Contactless is people's most popular method to pay,

he said. Mr Geale, who appeared on the BBC's Today programme, said that although the scheme is effective, tighter limits could slow things down.What we want to do is give banks and payment providers more freedom to choose their own route to contactless payment, where they see little risk of fraud,

he explained. In practice, he said that this means that banks and payment companies could choose a limit based on their clients.

But what we're really encouraging is that they'll allow customers the freedom to set their own limits,

he said. Other countries, such as Canada, Australia, and New Zealand, allow industry to set contactless card limits.

Any changes made in the future will be made carefully and ensure robust security and fraud protections remain in place," says Jana Mackintosh, the bank's managing director of payments and innovation.

Temptation to spend?

According to the FCA's own survey on modifying the laws, 78% of respondents who responded said they did not want any change to the current limits. According to analysts and researchers, the added convenience of unlimited contactless payment limits could also result in consumers' spending without considering. When people are investing borrowed money and building debt, it is reportedly a particular issue with credit cards. Affective charities have also warned that unlimited contactless funding could provide abusers with free access to drain a survivor's bank account without any checks or alerts. Despite notes and coins being a lifeline to many financial crime victims whose card transactions are tracked online by their perpetrators, they also fear that it could hasten the transition to a cashless society. The establishment of shared banking hubs is one of the initiatives to assist homeless customers as bank branches close. On Friday, Cash Access UK, the company that was established to shield cash around the UK, announced the official opening of its 200th banking hub in Billericay, Essex. Get all the headlines you need to start the day with our flagship newsletter. Sign up here.