A significant rule change takes effect this week for all credit and debit cardholders. From Wednesday, March 19, the £100 contactless spending limit will be abolished.

Presently, the threshold is mandated by the Financial Conduct Authority (FCA). However, following its removal, control will shift to customers and their banks, allowing them to establish their own limits.

The FCA said that contactless payments had become the “go-to way to pay”. It referenced research by Barclays showing that nearly 95% of all eligible in-store card transactions were contactless in 2024.

It added: “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.

“Crucially, existing consumer protections remain in place. Consumers must be reimbursed in unauthorised fraud cases, such as if their card is lost or stolen.”

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.”

Following Wednesday’s change, it will be down to individual firms whether and when they adopt the increased flexibility to modify contactless limits. Those who proceed must communicate any changes transparently to their customers, the FCA stated.

Charlie Evans, personal finance expert at Compare the Market, said: “The £100 contactless card limit is set to be lifted by the Financial Conduct Authority (FCA) on March 19. The change gives millions of customers and their banks greater control over their contactless limits, allowing them to set a higher limit or opt out of contactless altogether. Although this change is not compulsory, some banks may choose to keep the £100 limit in place.

“While this gives consumers more flexibility, it also raises potential budgeting considerations. Our recent consumer survey revealed that a third (33%) of Brits sometimes regret the cost of a spontaneous or unplanned purchase and over one in ten (14%) think a spontaneous purchase affects their budget more than expected. Banks are being encouraged to let customers set their own limit or turn off the contactless option, allowing shoppers to pause and consider their purchase and manage their spending in a way that works for them.”

Expert tips to manage your money after the £100 contactless limit lift

Charlie offered the following guidance:

Utilise your bank’s mobile application – Installing your bank’s mobile app provides round-the-clock instant access to your finances. You’ll be able to securely transfer funds, monitor expenditure and savings or settle bills. Applications also feature robust security measures, including fingerprint or facial recognition, and enable you to suspend your account should you misplace your card.

Activate notifications for purchases – Alongside having the app, you should activate banking notifications. The immediate alert will boost spending awareness by informing you of the precise amount that’s just been deducted from your account. Some banks offer a weekly spending summary and low balance alerts to avoid slipping into overdrafts and incurring charges.

Double-check the screen before tapping – Prior to tapping or inserting your card, double-check the terminal screen to ensure the amount and shop name are accurate. With over two in five Brits (21%) previously falling victim to a financial scam, taking a moment to verify the card machine’s details can help safeguard you against scams when making a purchase. Even a swift glance can provide peace of mind that your payment is being directed to the correct place.

Guard against ‘card cloning’ – To protect your card from being cloned, consider using an RFID-blocking wallet. These wallets utilise materials like carbon, aluminium and copper to prevent criminals from digitally scanning your cards or IDs. If you suspect your card has been cloned, immediately freeze your account on your online banking app or by contacting your banking provider.

Retain receipts – Keep your receipts whenever possible, as this provides you with a paper trail and tangible proof of your purchases. If you suspect there’s been fraudulent activity, you can use these as evidence of purchase. Retaining receipts also aids in tracking spending habits, facilitating improved personal or business financial management.

However, speaking on BBC Morning Live, consumer specialist Rebecca Wilcox said that she had spoken to major banks including Lloyds, HSBC, Santander, Barclays, Natwest and Monzo and reported that they had all said they planned to maintain the £100 limit.