Emma RadmoreThe FCA has gone ahead with its plans to remove the contactless limit requirement, so that in future providers and consumers will be able to set higher limits or turn off contactless limits all together, with the result that they will be able to make payments of any amount with their contactless card without having to use their PIN.
The FCA claims this will incentivise firms to have even stronger anti-fraud controls in place while giving customers flexibility without removing the fundamental protection of reimbursement in case of card theft or fraud.
The FCA’s Handbook Notice confirming the changes says that firms will be able to process payments without asking for authentication where they identify the risk of the transactions to be low. The FCA says that the 19 industry respondents to its proposals were generally supportive of the change, though several thought it important to keep a common contactless limit on single transactions. 84% of public respondents did not want the change (even more than the 78% which had opposed it when previously asked). Everyone was concerned about the increased risks of financial crime. In going ahead with the proposals, the FCA says that most objections centred round the assumption that PSPs would remove or increase the limits and that as a result fraud would increase. However, given it doesn’t think firms will actually make any changes, it thinks this minimises the risk.
The changes take effect from March 2026. Firms do not have to use the new flexibilities, but if they do, they must communicate clearly with their customers on what they are doing. Unsurprisingly, given no-one asked for this change, the FCA thinks most providers will keep their existing limits for the foreseeable future.