FCA plan to lift £100 contactless PIN limit draws warnings of surge in card theft and fraud

The Financial Conduct Authority has proposed removing the current £100 contactless payment limit that normally triggers a requirement for a PIN, a change that industry groups and consumer campaigners say could fuel theft and a sharp rise in card fraud.

Under the FCA’s proposals payment providers would be allowed to process individual contactless purchases above £100 without an immediate PIN authentication, provided the transactions can be identified as low risk. The regulator said the change could be introduced as early as next year.

Banks, industry bodies and consumers expressed strong resistance during the FCA’s engagement process. The regulator’s consultation paper acknowledged that more than three-quarters of consumers who responded to its March engagement preferred no change to the current single-payment £100 limit and the cumulative £300 threshold before PIN authentication. A majority of industry respondents also opposed lifting the limits, citing concerns about potential increases in fraud.

The FCA has argued the change could smooth consumer payment journeys and have "positive secondary impacts on growth through smoother consumer payment journeys, resulting in more sales and higher productivity," language set out in an engagement paper and referenced in a letter from FCA chief executive Nikhil Rathi to the prime minister earlier this year. The move formed part of a broader set of proposals the regulator said would support economic growth.

But consumer and security voices warned of immediate harms. Consumer campaigner Martyn James predicted a "huge increase" in wallet, purse and bag thefts as criminals target contactless cards, while Rocio Concha, director of policy and advocacy at Which?, said: "Inevitably, fraudsters will seek to take advantage of these changes, so it's crucial that regulators and industry work together to ensure fraud controls are applied properly to protect consumers."

Data cited in consultation materials and industry commentary underline the scale of current contactless use and the size of typical purchases. Barclays figures released last week show shoppers used contactless payments on average 236 times a year, up from 231 in 2023. The same bank found the average contactless purchase in the last year was £16.10, a level that many industry respondents said makes the current limits appropriate for low-ticket transactions.

The FCA’s own modelling indicated contactless payment fraud could increase by as much as 131% over three years if the single and cumulative limits were raised. UK Finance, the banking lobby group, told the regulator that £100 is the "right amount for now."

The regulator has said providers would still be required to apply risk-based controls and identify higher-risk transactions, but critics say such safeguards may not prevent rapid fraudulent spending once a card is stolen. While banks generally refund unauthorised transactions, victims and campaigners warned the recovery process can be disruptive and time-consuming.

Security concerns are being raised amid a recent rise in thefts involving mobile devices and bags, which criminals sometimes resell abroad. Commentators say those patterns could be exacerbated if contactless cards can be used for larger purchases without PINs.

Industry respondents also flagged practical limitations. Some merchants already report occasional technical failures that can prevent contactless payments from completing, and several banks argued that digital wallets on smartphones — which typically include biometric or passcode authentication — are more appropriate for higher-value transactions.

The FCA said it will continue to engage with industry and consumer groups as it refines proposals and considers implementation. Any rule change would require further consultation and would be accompanied by guidance to firms on fraud controls, the regulator said.

Policy makers and consumer advocates face a trade-off between easing small friction in everyday payments and guarding against increased fraud and theft. With a broad swathe of consumers and many industry players opposing the change, the outcome of the FCA’s next steps will be closely watched by banks, retailers and consumer groups as the regulator weighs its growth and safety objectives.