A BBC specialist has provided a crucial update on plans to permit significant alterations for anyone making a contactless payment from 19 March. The Financial Conduct Authority is raising the limit for contactless card payments, and BBC Morning Live examined how this might affect consumers at UK tills.

Under the City regulator’s proposals, shoppers may find it simpler to make larger payments using contactless methods. Current regulations allow individuals to make transactions of up to £100 per transaction when utilising physical contactless cards.

Changes being implemented next week by the Financial Conduct Authority (FCA) will enable banks and payment providers with robust fraud controls to establish their own limits. Crucial updates have been issued by banks including Lloyd, HSBC, Santander, Barclays, Natwest and Monzo.

On BBC Morning Live, consumer expert Rebecca Wilcox stated: “Basically, the Financial Conduct Authority, which is the regulator for all the banks, has said we’re going to go to an unlimited spend on contactless. Now. this is helpful for someone like me who is always forgetting their chip and pin but for most people actually we’re not going to see a great change.

“This is happening from March 19 this year. So you used to have £100 limit for every tap now it’s going to be limitless but not now and I’ll explain why. It first came in back in 2007 and that was a £10 limit. Doesn’t that seem lovely and innocent?” She outlined how this increased to £15 in 2010, £20 in 2012, and £30 in 2015. She added: “Covid came in in 2020, which meant people didn’t want to touch things, so it went up to £45 and then again jumped quite quickly in October 2021 to £100, and that’s where we’ve stuck for a bit.”

“Did you know that 74 per cent of all UK card transactions are now contactless. We’ve all forgotten out PIN except for the 10 per cent of us who still used Chip and PIN. The other 16 per cent is just online payment.

“Weirdly, the average spend for your tap is £16.83.”

Presenter Gethin Jones questioned: “If that’s the average, you have to wonder why we have to go beyond £100 for the contactless limit.”

Rebecca said: “It is because the Financial Conduct Authority it has said it is looking at future proofing itself for flexibility with banks, and payment providers. So we don’t know what’s going to happen with inflation. It is reflecting the changes in consumer demand and the banking response to inflation. It needs to allow for new technology to come in, so it’s not going to happen in the immediate future. Industry feedback is that most banks will keep to current limits because that’s what they’re set up for and the existing £100 limit is going to remain for many customers even after this change comes in from March 19.

“We have spoken to most of the major banks. We have spoken to Lloyds banking group, HSBC, Santander, Barclays, Natwest and Monzo and every single one of them says they are sticking with the £100 limit. So this has come in, the FCA’s starting, and we’re all thinking about it, we’re all worried about it, but actually banks set their limits on it, and they go to what the customer wants. So if we all start going ‘we’d like to spend a bit more doing that’ maybe they’ll change it, but not in the immediate future.”

Any institutions choosing to implement changes will be required to communicate them transparently to account holders, the regulator confirmed. The objective is to enable providers to adapt more effectively to evolving consumer preferences, inflationary pressures and emerging technologies.

Providers are additionally being urged to offer customers the option to establish their own threshold, or disable contactless payments entirely, as numerous high street lenders currently permit. The use of contactless payments has skyrocketed over the years, with the limit for contactless card transactions having been progressively raised.

Consumer spending data from Barclays reveals that 94.6% of eligible in-store card transactions were contactless in 2024.

Last year, Barclays reported a tenfold increase in monthly contactless transactions compared to 2015. Alongside a £100 cap for a single contactless card transaction, there is also a cumulative total of £300 in contactless transactions, or no more than five consecutive contactless transactions, since the last application of “strong customer authentication” to confirm a payment was made.

With the rule amendment, companies will also have the leeway to reconsider the cumulative contactless approach if they wish.

The FCA believes that the possibility of increased flexibilities will encourage firms to enhance their fraud prevention measures, providing consumers with better protection.

Existing safeguards will remain intact, ensuring consumers are reimbursed in cases of unauthorised fraud, such as if their card is lost or stolen.

The review of the contactless card limit was one of approximately 50 measures the regulator highlighted in a letter to Prime Minster Sir Keir Starmer in January to aid economic growth.

The proposals remained open for consultation until October 15. The regulator had previously indicated that, drawing on sector feedback, it expected the majority of firms would maintain the £100 threshold for now.

David Geale, executive director of payments and digital finance at the FCA, said: “Contactless is people’s favoured way to pay. We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers.”