The City watchdog has opened the floor for opinions on whether adjusting or scrapping the cap on contactless card payments could help households, businesses and bolster economic growth. In a move that mirrors practices across the pond, the Financial Conduct Authority (FCA) proposed allowing businesses that leverage advanced anti-fraud tech to determine their own spending limits.
This call for comment comes as part of an initiative unveiled in January via a letter to Prime Minister Sir Keir Starmer, which aims to fire up financial growth. The FCA emphasised that any alterations must align with Consumer Duty guidelines to foster positive outcomes for users.
FCA’s executive director for payments and digital assets, David Geale, said: “Currently 85% of people in the UK make contactless card payments each month. This is the perfect opportunity to explore whether we can improve and increase trust in the UK’s payments system.”
Economic Secretary to the Treasury Emma Reynolds said: “The FCA’s review of the contactless payment limits, including removing the £100 limit on individual payments, is a welcome step to ensure that families can safely benefit from more flexibility when making purchases.”
Consumers will remain protected under existing laws mandating reimbursement in the event of unauthorised payment fraud, such as when cards go missing or are swiped, the FCA confirmed. Stakeholders have until May 9 of this year to submit their thoughts on the proposals outlined in the engagement document.
