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FCA Increasing Thresholds for Contactless Payments

Published 4th March, 2021 by Josh McNeill


This week the FCA (Financial Conduct Authority, the regulatory body within the UK) has confirmed changes to its rules to now allow for any single contactless transaction to be increased from £45 to £100, as well as the multiple transaction threshold from £130 up to £300.

Sheldon Mills, Executive Director of Consumers and Competition has stated: ‘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.’

Over the years, as the industry has evolved, more and more consumers have chosen contactless payments as their preferred method of payment in retail stores. This is the second threshold raise within a 12 month period.  The first change came into place just when Covid-19 was taking effect in the UK, when the limit was raised from £30 to £45.


What are the impacts of this change?


The reason for this change in regulation is to improve the convenience for both consumer and retailer, allowing for larger transactions to be processed safely. In the past year, the FCA had been lenient towards organisations who allowed consumers to use contactless, despite exceeding the cumulative threshold.  With the increase of the threshold from £130 to £300, there is no further need for this flexibility. This means that firms will be required to comply with the new thresholds and the FCA may take appropriate measures, including enforcement action, where breaches occur.

Contactless payments at the point of sale are here to stay, and they’re only going to become more dominant and widespread.  It is easy to use and easy to adopt technology that allows for convenience on all sides. However, cash payments will remain an important payment method for many small businesses and older consumers.  The FCA does not believe this change is going to impact consumers’ ability to access and use cash.

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