The FCA is proposing to allow banks to set their own limits on contactless card payments – potentially removing the current £100 cap. This move could make PIN use even rarer, and would bring physical cards in line with unlimited smartphone wallet payments.
For retailers, the change could help boost revenue. But there are also security considerations, with higher limits potentially increasing fraud exposure and reliance on card-freezing technology.
Nicole Olbe, Managing Director UK & IR at Adyen – the global financial technology platform powering payments for the likes of H&M, eBay and Uber -comments:
“The FCA’s proposal to remove the £100 contactless limit reflects how consumer payment preferences have evolved since contactless launched with a £10 cap in 2007. While digital wallets and BNPL are growing in popularity, the debit card remains the number one way to pay in the UK, with 33 per cent of Brits saying it’s their preferred payment method. Enabling higher or unlimited contactless limits will make cards even more seamless, reducing PIN use and aligning them with the frictionless experience of mobile wallets.
“This is particularly important for in-store retailers, as 42 per cent of predominantly offline merchants report checkout times of 6–10 minutes. For today’s time-poor consumers, 39 per cent of whom say they would shop online to save time, this is simply too long. By streamlining the payment journey, retailers can increase customer satisfaction, reduce abandonment, and unlock growth. Ultimately, this change has the potential to benefit consumers and drive tangible growth in physical retail.”
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