Millions of shoppers across the UK are set to see a significant shift in how they pay for goods, as the financial regulator announces plans to overhaul contactless payment rules.
What is Changing and When?
The Financial Conduct Authority (FCA) has confirmed that from 19 March 2026, banks and payment providers will be given the power to set their own contactless transaction limits. This marks a departure from the current system, where a single nationwide limit of £100 is enforced. For any purchase above this amount, shoppers are currently required to enter their four-digit PIN for verification.
Under the new flexible framework, firms will also be encouraged to offer customers more personal control. This could include the ability for individuals to set their own lower limit or to turn the contactless function off entirely on their cards. Many providers already offer similar features, but the FCA's move aims to make this consumer choice more widespread.
Background and Industry Reaction
The contactless limit has risen steadily since its introduction in 2007, when it was set at just £10. It climbed to £15 in 2010, £20 in 2012, £30 in 2015, £45 in 2020, and reached its current level of £100 in 2021. The FCA estimates that a vast majority—85% of people in the UK—use contactless payments every month.
David Geale, the FCA's executive director of payments and digital finance, stated: “Contactless is people’s favoured way to pay. We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers.”
The proposals were first outlined in a letter to the Prime Minister in January 2025 and underwent a public consultation that concluded in mid-October.
What This Means for Your Daily Spending
Currently, you can make multiple contactless payments under £100 in one day. However, banks often prompt for a PIN if the cumulative total of these transactions exceeds £300. The new rules will grant firms the flexibility to review and alter this cumulative check if they wish.
Industry leaders have welcomed the change for the added flexibility it provides. Kate Nicholls, chairwoman of UKHospitality, said it would make life easier for consumers and mean quicker transactions for hospitality businesses. Jana Mackintosh, managing director of payments and innovation at UK Finance, emphasised that while no immediate change to the £100 limit is expected, any future adjustments would be implemented cautiously with strong security and fraud controls remaining a priority.
This regulatory shift promises to tailor the payment experience more closely to both provider strategies and individual consumer preferences, potentially altering the checkout experience for millions from 2026 onwards.
