The Financial Conduct Authority (FCA) has put forward a proposal to scrap the limit on contactless payments. Currently, you are unable to make a payment using the contactless method if it is over £100.

This was uprated from £45 back in 2021, causing an uproar as people feared what it would mean for their protection and security against fraud. However, this time round the regulator has assured that safeguards will remain in place to keep your money out of criminal hands even if you lose your cards.

Axing the limit altogether would allow Brits to make contactless payments, no matter the price, without having to put in their PIN. Currently, individual banks do also have the power to set a different limit on how much you can spend or how many times you can tap your card before needing your PIN or other verification.

While doing away with this would undoubtedly simplify payments for a lot of Brits, it could also have some safety concerns. For example, in theory, if your card is stolen there would be no limit to how much the criminals can spend as they wouldn’t need your PIN.

The Engagement Paper put forward for the proposal seems to dismiss these concerns. It reads: “Such fraud is a very small part of total unauthorised fraud and technologies within firms to identify and stop fraudulent payments are sophisticated and improving.

“Methods and trends in payments fraud are constantly evolving, as are fraud-detecting technologies…We want to understand whether the existing contactless payment limits are still relevant and achieving the best overall outcomes.”

The regulator is looking at a few different ways it could change the contactless limits. The first option will allow firms that to set their own limits, a system already used in the US.

With this option, the business would likely only be given the power to change the limits if they can prove they have ‘low rates of fraud’. They may also need to prove they have strong controls and abilities to tackle fraud, potentially making the marketplace safer for customers.

Other options include simply raising the contactless limits, or amending the single payment limit only. For families and customers, the FCA hopes that simplifying their checkout process could encourage them to use more contactless transactions and “build trust in the UK payments system” as a result. For businesses though it sets out: “Shorter queues, quicker transactions and a smoother payment process could make for happier customers.”

Economic Secretary to the Treasury Emma Reynolds commented on the proposal: “The FCA’s review of the contactless payment limits, including removing the £100 limit on individual payments, is a welcome step to ensure that families can safely benefit from more flexibility when making purchases.”

The regulator has assured that if any changes are made, if will focus on “how customers are protected. It also highlighted: “Existing legislation requiring firms to reimburse consumers in cases of unauthorised payment fraud, for example when their cards are lost or stolen, will remain in place.”