The UK’s payments system could undergo a major change next year if proposals from the Financial Conduct Authority (FCA) to remove limits on contactless payments are approved. The regulator said the move would modernise the country’s payment infrastructure and reflect growing consumer reliance on contactless transactions.
Currently, contactless payments are capped at £100 per transaction and £300 per day. The FCA has proposed lifting these limits, citing the increasing use of contactless technology across the country. Data from Barclays shows that 94% of eligible in-store card transactions were contactless in 2024, with the average purchase being £16.10 and the typical user making 236 transactions over the year. David Geale, executive director of payments and digital assets at the FCA, said the proposals aim to improve efficiency and trust in the UK’s payments system.
He said:”We‘re seeing smarter payment technology and more well-established fraud controls, so it’s the right time to let firms tailor contactless payments to fit their customers’ needs and drive innovation.
“While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers.
“People are still protected; even with contactless, firms will refund your money if your card is used fraudulently.”
The proposals have raised concerns over fraud. The FCA said that only low-risk transactions would qualify for higher limits and that providers would bear any losses rather than consumers.
Despite these assurances, public opposition appears high. A BBC survey found that 78% of respondents opposed removing contactless spending caps.
Barclays said the over-65 age group was the fastest-growing demographic among contactless users, with 84.1% using the technology last year. Convenience is cited as the main driver of adoption, with self-service payment screens at retail and hospitality venues contributing to the rapid uptake.
Karen Johnson, head of retail at Barclays, said contactless payments cannot replace human interaction entirely.
She said: “Consumer-facing businesses must continue to recognise the value that in-store members of staff can offer when it comes to fostering customer relationships and trust.”
The FCA consultation runs until October 15. If approved, the removal of the limits could take effect early next year, marking a significant shift in the UK’s payments landscape.
The change would not only simplify transactions for consumers but could also accelerate the broader move toward a cashless economy.
Analysts say the proposal underscores the central role contactless payments now play in everyday spending and signals how regulatory decisions can have wide-reaching implications for financial habits across the country.