FCA confirms the increase in thresholds for contactless payments

The Financial Conduct Authority (FCA) has confirmed changes to its rules to allow for an increase in the single transaction contactless payment threshold from £45 to £100. The contactless threshold for multiple transactions will also increase from £130 to £300.

These changes will allow the industry to increase the limit for contactless payments at the point of sale to securely improve convenience for consumers and merchants. In future we could see more consumers using contactless card payments for higher value transactions such as purchasing fuel and weekly groceries without needing to use Chip and PIN.

Sheldon Mills, Executive Director, Consumers and Competition said:
‘During the pandemic more people have been using contactless payments. We are changing our rules to help the industry continue to respond to the changing ways in which people prefer to pay.’

‘Increasing the regulatory limits allows industry to raise the contactless limit in the future to meet the evolving expectations of customers and merchants for fast but secure ways to pay. When making any change, it is important that the industry continues to ensure the right protections are in place to keep payments safe and secure.’

‘We encourage the industry to use these changes to support consumers and merchants during the recovery from the coronavirus pandemic.’

There has been an ongoing increase in the use of contactless payments in recent years. In response to this changing behaviour and the coronavirus (Covid-19) pandemic, the industry had already increased the contactless limit from £30 to £45 in April 2020.

To support consumers and merchants during coronavirus, the FCA had confirmed that they were very unlikely to take enforcement action where a firm fails to require Chip and PIN when a customer exceeds the cumulative transaction value threshold. As a result of the new changes, this flexibility is no longer needed. This means that firms will be required to comply with the new thresholds and that the FCA may take appropriate measures, including enforcement action, where breaches of the limits set in new rules are identified.

While adoption of contactless payments increases, cash remains an important payment method for many, including vulnerable consumers and small businesses. It is part of the FCA’s Business Payments priority to make sure consumers can access the cash they need. The FCA does not believe this change will impact consumers’ ability to access cash.

Notes to editors

  1. Read PS21/2: Amendments to single and cumulative transaction thresholds for contactless payments

  2. Strong customer authentication, firms

  3. Strong customer authentication, consumers

  4. Find out more information about the FCA.