FCA proposal to lift £100 contactless PIN limit draws warnings from consumers and banks
Regulator says providers could process higher-value contactless payments identified as 'low risk'; consumer groups and industry warn of increased fraud and theft
The Financial Conduct Authority has proposed scrapping the current £100 limit on contactless card payments that can be made without a personal identification number, allowing payment providers to process larger transactions without PIN entry when those transactions are identified as low risk.
The FCA said the change could be introduced as early as next year and that providers must apply risk-based controls before accepting higher-value contactless payments. The regulator said the measures could smooth consumer payment journeys and have secondary benefits for sales and productivity.
Consumer groups, campaigners and many industry respondents have warned the change risks increasing contactless fraud and theft. The FCA’s own engagement paper, published as part of its quarterly consultation, found more than three-quarters of consumers who responded preferred no change to the existing single payment limit of £100 and a cumulative contactless threshold of £300 before PIN authentication is required. A majority of banks and payment processors that responded also expressed opposition to raising the limits, citing concerns about potential fraud increases.
The regulator’s estimates in the paper suggest contactless payment fraud could rise by as much as 131% over the next three years if single and cumulative limits are raised. Consumer group Which? warned that fraudsters will seek to exploit any relaxation of controls; Rocio Concha, director of policy and advocacy at Which?, said it is crucial that regulators and industry work together to ensure fraud controls are properly applied to protect consumers.
Campaigner Martyn James said the proposal will lead to a "huge increase" in thefts of wallets, purses and bags as criminals target contactless cards. Columnists and consumer commentators have also argued that while banks will generally refund unauthorised transactions, the recovery process can be disruptive and protracted for customers.
The FCA’s proposal follows a letter earlier this year from FCA chief executive Nikhil Rathi to the prime minister that listed removing the £100 contactless payment limit among several measures intended to support economic growth. In subsequent engagement material, the FCA said enabling more contactless payments could deliver smoother payment journeys that may support sales and productivity, and thus have positive secondary impacts on growth.
Industry data indicate that current contactless use is concentrated in low-value transactions. Barclays reported the average contactless purchase last year was £16.10 and that the average consumer used contactless payments 236 times annually, up from 231 in 2023. Banking trade body UK Finance said £100 remains the appropriate single-transaction limit for now.
Payments industry participants also pointed to the growing role of digital wallets on smartphones, which typically include built-in authentication such as biometrics and are better suited to higher-value purchases. Some banks and payment processors argued that existing fraud controls and authentication mechanisms mean the current thresholds are working effectively for consumer protection.
The FCA has invited responses to its consultation as it balances consumer protection with wider policy goals. Any final rule change would follow the consultation and implementation timelines set by the regulator. If adopted, the proposals would alter longstanding limits on contactless payments, a technology that has been widely used in the United Kingdom for nearly two decades.
Officials, industry representatives and consumer groups will consider the FCA’s detailed proposals and evidence as the consultation proceeds. Until then, the current £100 single-payment and £300 cumulative thresholds remain in place for contactless card transactions.