FCA Rule Changes Grant Banks Flexibility Over Contactless Limits
From Thursday, banks and payment providers with robust fraud controls will gain the authority to set their own contactless card payment limits under new Financial Conduct Authority (FCA) regulations. While Britain's major banks have indicated they will retain the current £100 limit for now, the rule changes provide future flexibility to adjust limits in response to consumer demands, inflation, and technological advancements.
Current Bank Positions and Consumer Options
Several leading financial institutions have confirmed their immediate plans regarding contactless limits:
- NatWest: No immediate changes; customers can adjust limits via app.
- Santander UK: Maintaining £100 limit; customers can set custom limits in £5 increments.
- Lloyds Banking Group (including Halifax and Bank of Scotland): Customers can set limits in £5 steps up to £100.
- Barclays: Keeping £100 limit; app allows custom adjustments.
- HSBC UK/First Direct: £100 limit remains; no app adjustment currently available.
- Nationwide Building Society/Virgin Money: Reviewing but maintaining £100 limit; app adjustments possible.
- TSB: No increase beyond £100; app allows lowering or disabling contactless.
- Starling Bank: Reviewing changes; customers can set limits from £0 to £100.
- Monzo: Regularly reviews limits; currently maintaining existing caps with app customization.
- Revolut: Not planning increases; customers can set monthly spending caps.
Background and Regulatory Context
The contactless card limit has undergone multiple increases over recent years, with the FCA confirming in December that rule changes would take effect from March 19. The regulator's approach aims to incentivize enhanced fraud prevention measures while maintaining existing consumer protections. Firms that choose to implement higher limits must communicate changes clearly to customers, and many banks already offer options for customers to set lower limits or disable contactless functionality entirely.
Market Trends and Consumer Behavior
Contactless payments have experienced remarkable growth, with Barclays data revealing that 94.6% of eligible in-store card transactions were contactless in 2024. UK Finance figures show contactless accounted for 67% of credit card and 76% of debit card transactions as of December 2025. The average contactless payment value remains just under £18, indicating continued preference for smaller, convenient transactions.
Fraud Protection and Security Measures
Existing consumer protections remain unchanged, ensuring reimbursement for unauthorized fraud cases involving lost or stolen cards. The FCA believes increased flexibility will encourage firms to strengthen fraud prevention systems. Additionally, higher payments through mobile wallets remain possible with identity verification methods like facial recognition or thumbprint authentication.
This regulatory adjustment represents one of approximately 50 measures outlined by the FCA in a January letter to Prime Minister Sir Keir Starmer, designed to support economic growth while balancing innovation with consumer security in the rapidly evolving payments landscape.
