Contactless card payments could become unlimited under plan to scrap £100 cap
Without communication, card payments may be unlimited because the UK’s financial service regulator allows banks and other providers to scrape 100 pounds.
The Financial Behavior Authority (FCA) announced the offer on Wednesday, which aims to determine the transaction limits to card providers and to decide on the right limits for their customers.
Previous transaction limit increases increased concerns about fraud and theft, but FCA stated that if a card was lost or stolen, banks should pay back unauthorized fraud cases.
David Geale, Executive Director of Payment and Digital Finance at FCA, said: “People are still protected; even if your card is fraudulent, companies will return your money.
“We see smarter payment technology and more rooted fraud controls, so the right time to allow companies to adapt contactless payments in a way that will comply with their customers’ needs and lead to innovation.”
Changes may happen at the beginning of next year. Mr. Geale said: “Even though we did not expect immediately to see the changes in the borders of the companies, they would have the flexibility to make payments more suitable for customers.”
When contactless card payments were introduced in 2007, the transaction limit started at £ 10. It was upgraded to £ 15 in 2010, £ 20 in 2012, 45 £ in 2020 and then to £ 100 in October 2021.
He sees that debt and credit cards are used in a similar way to payments made from digital wallets without limit. In addition, the shoppers can need to enter a four -digit pin for any purchasing.
However, even though card providers have the flexibility to determine their own limits, FCA said that they would only allow higher payments for low -risk transactions.
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Card providers already offer customers the option to change the transaction limits or completely close contact payments. FCA said it would encourage its providers to continue to offer this option.
The proposal was one of the 50 measures in FCA, which included a letter to Prime Minister Sir Keir Starmer in January, aiming to support economic growth.
The letter said that FCA wanted to “remove the 100 £ contactless limit, provide more flexibility to companies and customers, benefit from the US experience and level the playground with digital wallets”.
The offers appeared for consultation until mid -October.
