The Financial Conduct Authority (FCA) has launched a consultation on proposals to remove the current £100 cap on contactless card transactions. The regulator argues that smarter fraud controls and payment innovations may make fixed limits unnecessary, potentially allowing firms to set their own thresholds to better serve consumers and merchants.

Why the FCA Is Reviewing Limits

The FCA first signalled this move in January 2025, framing it as part of its broader strategy to promote competition and innovation in payments. The current £100 cap was introduced in 2021, following an earlier rise from £45 amid the surge in contactless payments during the Covid-19 pandemic.

Now, with biometric authentication and stronger fraud detection systems more widely deployed, the FCA is asking whether firms should have the flexibility to set their own limits, mirroring practices in the United States, where providers can tailor thresholds to their fraud controls. This would also level the playing field with digital wallets, such as Apple Pay and Google Wallet, which already allow higher-value transactions with biometric verification.

David Geale, executive director of payments and digital finance at the FCA, said:

“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.” - Financial Conduct Authority

Fraud Risk Remains a Key Concern

Despite the potential benefits, consumer resistance is significant. The FCA reported that 78% of respondents to its initial engagement paper opposed raising or removing the limit. Many worry that higher caps could incentivise criminals to target lost or stolen cards.

Fraud statistics highlight both sides of the debate. According to UK Finance’s Annual Fraud Report 2025, contactless fraud rates remain low at just 1.3p per £100 spent, compared with 6p per £100 for overall unauthorised fraud. However, regulators acknowledge that higher-value transactions could raise the stakes for fraudsters.

For compliance teams, this underscores the importance of robust fraud detection, continuous monitoring, and secure payment screening processes to protect both consumers and merchants.

Consumer Choice vs. Consumer Protection

The FCA’s challenge is to balance flexibility and convenience with trust and security. While contactless limits simplify everyday purchases, the consultation acknowledges that many firms may choose to maintain the £100 cap “for the time being,” even if rules are relaxed.

The FCA has been clear that contactless payments carry the same protections as any other card transaction. This means that if a card is used fraudulently, whether by contactless or chip-and-PIN, banks and payment firms are required to reimburse unauthorised fraud cases.

This safeguard is central to maintaining consumer trust as payment technology evolves. Even if firms begin offering higher contactless limits, customers will continue to have the same protections that underpin the wider card payments ecosystem.

Next Steps: Consultation Open Until October 2025

The FCA’s consultation on contactless payment limits is officially open until 15 October 2025. In its press release, the FCA confirms that it has already received nearly 1,300 responses to the initial Engagement Paper, and that “most firms will continue to implement the £100 limit for the time being” even if the regulation changes.

For now, firms and merchants should prepare for the possibility of a more flexible framework in which contactless thresholds can be tailored to customer needs, risk appetite, and the strength of a provider’s fraud controls.

For payments and compliance professionals, this is another reminder that regulation is shifting toward outcome-based flexibility, with an expectation that firms use technology responsibly to mitigate risks. Tools like advanced alert adjudication and transaction monitoring will be critical in ensuring that innovation does not compromise trust.