New FCA rules effective March 19, 2026 allow UK banks and payment providers with robust fraud controls to set their own contactless payment limits, replacing the fixed £100 single-transaction cap and £300 cumulative limit.
What's Changing
Previously, UK contactless payments were subject to a fixed cap set by the FCA - most recently £100 per transaction and £300 cumulative before PIN re-entry. Under the new rules, firms with demonstrably strong fraud prevention capabilities can set their own limits.
Industry Impact
Most providers are expected to maintain current limits initially, as the regulatory change enables but does not require higher caps. The move gives issuers flexibility to differentiate on convenience while maintaining security standards.
Consumer Protections
Consumer protections for unauthorised contactless fraud remain unchanged
Many banks already offer customers the ability to set their own contactless limits or disable contactless entirely via mobile banking apps The FCA retains the power to intervene if fraud rates increase materially
What This Means for Payments Professionals
The change signals the FCA's shift toward principles-based regulation in payments - trusting firms to manage risk rather than imposing blanket rules. Payment infrastructure (Faster Payments, BACS) is unaffected, but card scheme rules and terminal configurations may need updating for providers that choose to raise limits.