People are being reminded of a major change to contactless payments in the UK coming within a matter of days. It will scrap a long-standing limit in favour of a new rule for banks and customers to follow.

From Thursday, March 19, businesses will be able to set higher contactless limits than the existing £100 per transaction limit. Although the cap is being removed, UK Finance suggests most banks will likely stick to the £100 limit in the short term for security reasons.

Customers will be able to set their own personal contactless limits or disable the feature entirely through their banking apps. The Financial Conduct Authority (FCA) decided to axe the limit following a public consultation.

Banks and payment providers must have strong fraud controls when processing contactless transactions. The greater flexibility will incentivise firms to step up their fraud prevention, giving consumers greater protection and peace of mind.

The FCA is implementing the change to the contactless rule, and existing safeguards will continue. This will allow customers to be refunded in cases of unauthorised fraud, such as if their card is lost or stolen.

Experts believe these new limit removals will have major impacts on businesses that rely on contactless payments. Kate Nicholls, chair of UKHospitality, said: “Making life easier for consumers is a positive for any hospitality and high street business, and I’m pleased the FCA is bringing forward this change.

“Contactless has increasingly become the preferred payment method of choice for many people and lifting the limit can mean quicker and easier experiences for consumers. While many people still prefer to use cash or chip and PIN, this change adds much-needed flexibility for providers and consumers.”

Recent reports suggest that most UK adults prefer contactless payments. UK Finance found that, since 2023, almost four out of ten of all payments made in the UK were contactless and that a third of UK adults were using mobile contactless payments at least once a month.

Previous contactless limit changes in the UK

Contactless payments have been around for decades, and longer than some people may realise. The idea of tapping to pay without using a PIN number has been around in the UK since 2007 – almost 20 years ago.

Barclays pioneered the technology with its OnePulse card – although the limit on using this was relatively low by today’s standards. In 2007, customers were capped at £10.

Over the years, it gradually increased in line with inflation as the idea rolled out further across the country. Previous ceiling limits were increased gradually over several years to what they are today:

• £15 (2010)
• £20 (2012)
• £30 (2015)
• £45 (2020)

The most recent rises came during the height of the coronavirus pandemic, offering a faster and more hygienic way for people to pay without handling cash or sharing the keypad of card readers. Since October 2021, most places offer £100 as the maximum amount people can tap to pay, and this is now set to change again at individual discretion.

Although card limits were £100, payments made via digital wallets, such as Apple Pay and Google Pay on smartphones, often had no set limit due to biometrics.