Proposals from the Financial Conduct Authority (FCA) suggest that the limit for contactless card payments could be raised to £100 or potentially removed entirely. If these changes are approved, consumers may find themselves able to make high-value purchases, such as grocery shopping or dining out, with a simple tap of their card, reducing the necessity of entering a four-digit PIN.
The contactless payment limit has evolved since its introduction in 2007, starting at £10 and gradually increasing to £45 during the COVID-19 pandemic, and then to £100 in 2021. The FCA indicates that the latest adjustments could be implemented as soon as early next year, although the majority of consumers polled expressed a preference for maintaining current limits.
Concerns have been raised regarding potential theft and fraud with higher transaction values. The FCA has reassured that only low-risk transactions would be allowed for increased contactless payments, placing the responsibility on card providers for fraud-related issues. Existing safeguards state that customers must enter a PIN after a series of contactless payments exceed a threshold, and they would still receive refunds for unauthorized transactions.
Moreover, consumers have the option to establish their own contactless limits, and many banks already provide this feature. The proposals come as a response to an evolving payment landscape, where mobile wallets offer similar unlimited functionality. Industry reports suggest that a considerable number of young adults prefer mobile payments for their added security features.
The FCA aims to align the UK’s payment system with practices in countries like Canada and Australia, where payment limits are determined by providers. The consultation period for these proposals will conclude on October 15. This initiative is part of broader efforts to stimulate economic growth in the UK.
Source: https://www.bbc.com/news/articles/czjv7jy2r9vo?at_medium=RSS&at_campaign=rss