FCA Seeks Public Input on Contactless Card Limit Adjustments
Regulator explores potential changes to the £100 limit on contactless card payments amid rising consumer use.
The Financial Conduct Authority (FCA) has initiated a consultation to gather public opinion on the potential removal or increase of the £100 limit on contactless card transactions in the UK. This engagement paper represents a continuation of efforts announced earlier this year aimed at fostering economic growth, particularly in communication with Prime Minister Sir Keir Starmer.
As of recent data, approximately 85% of UK consumers utilize contactless card payments monthly, highlighting a significant reliance on this payment method.
David Geale, the FCA's executive director of payments and digital assets, emphasized the importance of exploring methods to enhance trust within the UK payments system.
Among the proposals outlined in the engagement paper is the possibility of allowing financial institutions that implement advanced technologies to bolster fraud protection measures to establish their own contactless payment limits.
This approach is already implemented in the United States, where firms can set higher limits based on their risk management frameworks.
Emma Reynolds, the Economic Secretary to the Treasury, expressed her support for the review, stating that revisiting the contactless payment limit would provide consumers greater flexibility while ensuring safety during transactions.
The FCA confirmed that any modifications made to the contactless payment structure would maintain existing consumer protections, including mandatory reimbursement for unauthorized payment fraud incidents, such as lost or stolen cards.
The consultation period for feedback regarding the engagement paper will remain open until May 9. Industry representatives, including Jana Mackintosh, managing director of payments and innovation at UK Finance, welcomed the FCA’s initiative.
Mackintosh highlighted that while contactless payment limits are imperative for minimizing fraud risks, the decision on overall limits and the frequency of PIN entry should be guided by the financial sector rather than regulatory bodies.
She asserted that banks possess the necessary insights into customer behaviors to balance security with efficiency in payment processing.
As of recent data, approximately 85% of UK consumers utilize contactless card payments monthly, highlighting a significant reliance on this payment method.
David Geale, the FCA's executive director of payments and digital assets, emphasized the importance of exploring methods to enhance trust within the UK payments system.
Among the proposals outlined in the engagement paper is the possibility of allowing financial institutions that implement advanced technologies to bolster fraud protection measures to establish their own contactless payment limits.
This approach is already implemented in the United States, where firms can set higher limits based on their risk management frameworks.
Emma Reynolds, the Economic Secretary to the Treasury, expressed her support for the review, stating that revisiting the contactless payment limit would provide consumers greater flexibility while ensuring safety during transactions.
The FCA confirmed that any modifications made to the contactless payment structure would maintain existing consumer protections, including mandatory reimbursement for unauthorized payment fraud incidents, such as lost or stolen cards.
The consultation period for feedback regarding the engagement paper will remain open until May 9. Industry representatives, including Jana Mackintosh, managing director of payments and innovation at UK Finance, welcomed the FCA’s initiative.
Mackintosh highlighted that while contactless payment limits are imperative for minimizing fraud risks, the decision on overall limits and the frequency of PIN entry should be guided by the financial sector rather than regulatory bodies.
She asserted that banks possess the necessary insights into customer behaviors to balance security with efficiency in payment processing.
