Experts have warned there could be security risks under the new payment policy
A significant shake-up to contactless card payments is on the horizon. From March 2026, the existing £100 ceiling on contactless transactions will be removed under a new policy.
Contactless technology first arrived in 2007 with a modest £10 spending cap. Over the years, this threshold has steadily risen – reaching £15 in 2010, £30 in 2015, £45 in 2020, and finally £100 in October 2021.
Under fresh regulations unveiled by the Financial Conduct Authority, banks and card issuers will gain the power to determine their own maximum limits, or potentially remove caps altogether on contactless spending. The updated framework will take effect from March 19 next year.
While the move appears to offer greater flexibility to shoppers, industry experts suggest this isn’t the primary motivation behind the reform. Chris Jones, managing director at payment consultancy PSE Consulting, explained: “Lifting the contactless limit is not really about letting people spend more with a tap.
“It is about shifting responsibility across the payments ecosystem.” He added: “By lifting the contactless cap, the FCA is stepping away from a blunt, one size fits all rule and putting the onus on banks and card providers to manage their own risk exposure levels. That significantly raises the bar for the industry.”
Discussing the advantages for consumers, Mr Jones explained: “For consumers, the real win is not higher limits, but greater control. Being able to set personal thresholds, switch contactless on or off instantly, and manage settings through an app delivers far more value than mandating a simple ceiling.”
He added a warning for financial institutions: “Banks that treat this as a trust building opportunity will strengthen customer relationships. Those that rush to increase limits without clear safeguards and communication risk eroding confidence and attracting scrutiny from both regulators and customers.”
READ MORE: Martin Lewis issues urgent ‘do it today’ advice after interest rate cutREAD MORE: ‘I used ChatGPT to fight parking ticket – company ended up paying me £462’
Risk of scams
There are also worries that the changes could fuel a surge in fraudulent activity. Jonathan Frost, director of Global Advisory for EMEA at BioCatch, said: “When considering the FCA’s lifting of contactless limits, it’s important to assess its potential indirect effects.
“The direct impact is clear, giving consumers greater convenience while maintaining fraud protection.” However, he highlighted some alarming projections: “FCA estimates indicate the change could cause up to £31.3million per year in additional contactless fraud, representing a 131 percent increase.
“The core question is whether raised limits will trigger long-term impacts, such as shifts in criminal behaviour.” Mr Frost noted that security concerns are already affecting vendors’ behaviour.
He said: “There is also a broader ecosystem impact to consider. Some retailers are reluctant to accept contactless payments due to the abuse of chargeback fraud.
“This friction risks undermining the very convenience the policy is designed to deliver. Given these dynamics, banks should prioritise the implementation and continuous improvement of real-time fraud detection systems that focus on customer behaviour. This will help stop fraud by considering all customer behaviour rather than just focusing on card use.”
Concerns for vulnerable shoppers
Georgina Colman, founder of discount scheme Purpl, has voiced concerns about the potential negative impact of increasing the contactless limit on certain groups of consumers. She cautioned: “Increasing the contactless spending limit might feel like a small convenience, but for many disabled people and those with long-term conditions, it carries real risks.
“For people with ADHD or other neurodivergent conditions, impulsivity and dopamine-seeking behaviours are well documented, and higher frictionless spending limits could make it far easier to overspend without realising until the damage is done. When disabled people are already more likely to face financial pressure, this kind of change shouldn’t be brushed off as harmless.”
She warned that other vulnerable people could face increased dangers under the proposed changes. Ms Colman explained: “People with dementia, learning disabilities or cognitive impairments could be placed at greater risk of financial abuse if higher contactless limits make it easier for others to coerce or persuade them into spending money.
“Contactless payments remove a natural pause that can be protective, and if limits are lifted, banks must ensure robust, optional controls and alerts are in place, so disabled people and their families can actively choose safeguards rather than being exposed to greater risk by default.” Ms Colman argued that contactless payment caps should be personalised rather than universal.
She explained: “A single higher blanket limit assumes everyone manages money in the same way, which simply isn’t true for many disabled people and those with long-term conditions.” The consumer champion added: “Banks already have the technology to offer tailored caps, real-time alerts and easy controls, and using these would support independence while also protecting people who are more vulnerable to impulsive spending or financial exploitation.”
For the latest money saving tips, shopping and consumer news, go to the new Everything Money website.
