UK Regulator Eases Contactless Card Limits

FCA reforms give it the opportunity to have flexible contactless limits and this revamped the future of payments and cards in the UK.

The Financial Conduct Authority of the UK (FCA) has affirmed regulatory modifications that will provide banks with a chance to have greater flexibility in contactless card limits on payment and cards, which is an impressive move by the payments and cards policy. Since March, the card providers are allowed to impose larger limits on card transactions per use, up to an unlimited amount, without cardholders being required to swipe their card.

The FCA is also pushing banks to leave customers free to set their own contactless limits or simply turn them off. Whereas institutions offering this option may already exist, the regulator indicated that it did not anticipate that the present PS100 limit would be altered at once, though it allowed providers to change it.

Contactless payment was initiated in 2007 with a limit of PS10, which increased to PS100 by October 2021. Another layer in the cards and payments environment is already provided through smartphone-based payment that allows unlimited spending but is enforced by biometric security like fingerprint and facial recognition.

Nevertheless, there is still the issue of fraud, excess expenditure, and money misuse. Critics fear that increased limits are a dangerous step, especially for credit card users. The FCA underlined that the security measures, such as PIN interrogations after several transactions and protections against credit card fraud, will be retained to secure the payments and card users.

The regulator indicated that the reforms will ensure that payments and cards are future-proofed and, at the same time, avoid undermining consumer choice and security. Other countries like Canada, Australia and New Zealand already have similar methods.