Emma RadmoreThe FCA is now formally consulting on giving card providers the flexibility to decide customer contactless limits. The proposal follows its discussion paper in which it mooted removing the contactless limit altogether. Despite the vast majority of consumers being against the change, and feedback from industry indicating that most providers will keep the £100 limit, the FCA believes that the change could make consumers’ lives more convenient. It says it wouldn’t expect firms to make changes immediately, and reminds that customers would still have protection against fraudulent use of the card.
The proposals would mean that PSPs could process contactless payments without asking for authentication if they identify the risk of a transaction to be low. The current £100, and £300 on cumulative transactions limits would therefore be removed, though firms and customers can continue to apply those, or any other limit they consider appropriate. The FCA will provide guidance on how firms can implement the change and what it expects of them.
The FCA continues to state that it does not think fraud would increase as a result of removing the thresholds, and that the Consumer Duty is a powerful tool to mitigate consumer risk.
Consultation closes on 15 October.