The Financial Conduct Authority (FCA) is considering raising the limit from the current £100, following a request from Prime Minister Keir Starmer, Chancellor Rachel Reeves, and business secretary Jonathan Reynolds
The limit of how much you can spend with contactless could increase under proposed government plans.
The Financial Conduct Authority (FCA) is considering raising the limit from the current £100 in response to a request from Prime Minister Keir Starmer, Chancellor Rachel Reeves, and business secretary Jonathan Reynolds. The letter was sent on Christmas Eve and included several proposals and how the UK could stimulate economic growth in the coming years.
One of the suggestions was to reform contactless payments. The limit rose to £100 in 2021 and was the fifth time it had risen since it was initially set at £10 in 2007. Last year, it was revealed that the three government members had written to more than a dozen economic regulators, including the Competition and Markets Authority, Ofgem, and Ofwat, in a bid to remove “unnecessary” barriers to growth. The recipients were given until January 16 to respond with five ways to achieve this.
The FCA published its response to the letter today and said removing the £100 limit could allow for “greater flexibility” for both businesses and consumers. The letter read: “Remove the £100 contactless limit, allowing firms and customers greater flexibility, drawing on US experience, and levelling the playing field with digital wallets.” The FCA did not indicate whether it proposed increasing the limit or scrapping it altogether.
According to data published by UK Finance in March 2024 the number of contactless cards in issue in the UK topped 150million for the first time. This meant that contactless cards made up 93% of the cards in issue in the UK. Th data also revealed that there were 1.59billion contactless card transactions in March 2024 – 5.9% more than in March 2023.
At the time, Janine Randolph, Head of Data Management at UK Finance, said: “Contactless cards continue to be a very popular way of consumer spending, whether that’s using a physical card or through a mobile phone. There are over 150 million contactless cards now in issue and across these people spent over £25billion on them in March alone.” In July, UK Finance found that one third of UK adults used mobile contactless payments in their everyday spending.
