Banks can set their own contactless card payment limits for customers from today under new rules from financial watchdog the Financial Conduct Authority.
The FCA is allowing firms with ‘strong fraud controls’ to decide if and when they want to raise the contactless payment limit beyond £100.
Shoppers can currently make payments of up to £100 per transaction when using physical contactless cards. This was upped from £45 five years ago.
But from today their bank can raise this cap beyond £100 if they wish.
When the plans were announced to scrap the £100 contactless limit, the regulator said it wants to give card providers the flexibility to decide the right limit for them and their customers.
Banks can now set their own contactless limit for customers above the current £100 cap
The £100 limit does not apply to contactless payments made with a digital wallet such as Google Pay or Apple Pay which allow higher value contactless transactions above £100.
if your bank changes the contactless limit it will need to communicate the changes to under the Consumer Duty rules.
Based on industry feedback, the FCA said most banks and payment service providers are likely to maintain their existing contactless limits for the foreseeable future, even after the changes come in.
This is Money asked the UK’s biggest banks whether they intended to change the £100 contactless payment limit from today.
NatWest, Barclays, HSBC, Lloyds, (including Halifax, and Bank of Scotland), Santander and Nationwide said they have no plans to change the £100 contactless limit for customers and that it will remain at £100.
Some banks already allow customers the ability to set their own contactless limits or turn off contactless functionality on their card altogether.
Lloyds, NatWest, Barclays and Santander allow customers to set both their own contactless limit up to £100 and also opt out of ‘tap and go’ payments.
Some customers may worry that introducing unlimited contactless payments could lead to a wave of fraud as fraudsters could potentially spend larger amounts of money with stolen cards.
It is up to firms to implement strong controls to detect and prevent fraud from taking place.
The FCA may monitor whether banks have strong fraud controls by supervising the firms and through regular reporting.
Contactless card payments come with the same protection as any other card payment, meaning banks and payment firms must reimburse unauthorised fraud cases, such as when somebody’s card has been lost or stolen.
Often, a card has a contactless payment limit before a PIN is required – usually five transactions, or a total amount of £300.
David Geale, executive director of payments and digital finance at the FCA, says: ‘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.’
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