By Alex Nelson

Copyright expressandstar

Under new proposals from the City regulator, the Financial Conduct Authority (FCA), banks and card providers may soon be allowed to set their own contactless payment limits, potentially pushing the ceiling beyond the current £100 cap.

For many consumers, the idea of a higher or even “unlimited” contactless limit sparks a natural question: is my money safe?

The FCA insists it is. Contactless transactions carry the same protections as chip-and-PIN or online payments, meaning that if your card is lost or stolen, your bank must refund you for any fraudulent spending.

According to UK Finance, contactless fraud remains extremely low – just 1.3p per £100 spent, compared with 6p per £100 for card fraud overall.

The move comes as part of the regulator’s push to modernise payments, and is one of around 50 measures that the regulator outlined in a letter to Prime Minster Sir Keir Starmer in January to help support economic growth.

David Geale, executive director of payments and digital finance at the FCA, said that advances in fraud prevention and smarter technology make it the “right time” to give firms flexibility.

“While we wouldn’t expect to see immediate changes to limits by firms,” he said, “they would have the flexibility to make payments more convenient for customers.”

That convenience is already central to the way we spend. Around 85 per cent of people in the UK use contactless cards every month, and the £100 limit often proves restrictive for larger purchases like family supermarket shops, restaurant bills or train tickets.

Allowing banks to set higher limits could reduce the number of times shoppers are forced to dip their card and enter a PIN.

Importantly, consumers won’t lose control. Many banks already allow customers to set their own spending caps, or even switch contactless off entirely through mobile banking apps. The FCA says it will encourage firms to continue offering that choice.

The consultation on the proposals is open until October 15, 2025, but industry feedback suggests most providers are unlikely to raise limits overnight.

Even so, the direction of travel is clear: tap-and-go payments are only becoming more embedded in daily life, and soon they could cover almost every purchase you make.