What you should know about the removal of the contactless payment limit
Date: 18/03/26
On this page:
- History of contactless payments
- What changes from 19th March and why?
- What does the contactless limit change mean for merchants?
- Risks of removing the £100 contactless limit
- How to prepare for the contactless limit removal
- Sources
The Financial Conduct Authority has approved the removal of the mandatory £100 contactless payment cap, which will come into effect from 19th March.
This change will allow banks and payment providers to set their own contactless limits or remove the limit altogether.
Most banks are not expected to change their limits immediately [1], but merchants who take card payments should be aware of what this change could mean for their business and customers.
History of contactless payment limits
Contactless payments were first introduced in 2007, reducing the need for chip and PIN payments for transactions under £10.
The initial purpose of contactless payments was to increase the speed and efficiency of low-value purchases and to reduce the reliance on cash [2].
Over time the popularity of contactless payments increased with key drivers such as Transport for London becoming the first public transport provider to accept contactless payments in 2014, a great success with commuters [3].
As a result, the limit of contactless payments has gradually increased over the years until the Covid pandemic which prompted a jump to £45 in 2020 and then £100 in 2021 [4].
What changes from 19th March 2026 and why?
From the 19th of March, the Financial Conduct Authority (FCA) is removing the mandatory £100 cap for contactless, giving banks and payment providers the flexibility to raise , lower, or maintain their own limits.
The FCA are expecting the removal of the mandatory cap to provide flexibility and supporting consumer choice.
This change will also see physical card payments brought in line with mobile wallet payments such as Apple Pay, Google Pay and Samsung Pay which already have no contactless limit.
Despite the positive outlook, the FCA’s own survey revealed that 78% of consumers who responded wanted to maintain the £100 contactless limit [5], with fraud concerns raised by consumers.
The FCA have addressed these concerns by placing responsibility on providers to ensure payments are minimal risk through their fraud prevention systems.
According to David Geale from the FCA:
“People are still protected. Even with contactless, firms will refund your money if your card is used fraudulently.” [6]
What does the contactless limit change mean for merchants?
Although there isn’t strong public support for removing the £100 contactless limit, there are areas where this change could benefit merchants.
The removal of the £100 contactless limit will reduce friction at the checkout for customers who want to make higher value purchases more seamlessly, without the need for chip and PIN.
Operationally this means queues should move faster, especially in high footfall businesses such as supermarkets, convenience stores and fast-food restaurants.
With faster checkouts and no restrictions on spend, purchases feel easier which may encourage impulse purchases and contribute to higher spending.
However, on the other hand, merchants have little control over this change of accepting higher value contactless transactions, regardless of whether it aligns with their business preferences or not.
Industry and technology will need to be updated before higher-values can be processed. Most terminals and acquirer/processors will still have threshold limits that mean that they cannot cater for higher than £100 contactless limits today.
Banks are unlikely to be planning to change their limits immediately after the 19th March. Most likely is small incremental change will happen over time that allows consumers to decide within set parameters of their bank.
Risks of removing the £100 contactless limit
Contactless fraud
With banks and payment providers having control over the contactless limit or potentially removing it altogether, there is a risk of increased fraud with higher values at stake. In response to this, the FCA have noted that contactless payments should only be permitted if the transaction is low risk as firms would still be liable for reimbursement [4].
Lost/stolen cards
If a card is lost or stolen, without a contactless limit the damage could be more significant to consumers. It will therefore be more important than ever for consumers to act quickly if their card goes missing, ensuring this is reported to the relevant bank or payment provider and blocked from any further transactions.
Inconsistent limits
This change allows banks and payment providers to set their own limits for contactless payments. However, without a consistent national limit this could become confusing for consumers to understand what applies to them and their payment card. Many banks currently allow the cardholder to manage their own payment limits via their banking app, giving the consumer control.
Accidental/mistaken payments
When making a purchase above £100 currently, chip & PIN is required if paying by card. This gives the consumer a pause in their transaction to consider their purchase and ensure they are being charged the correct amount. With contactless payments, the ease of tap and go could result in consumers being less mindful of the amount they are being charged, leading to an increase in accidental or incorrect value payments.
Overspending
Following the increase of the contactless limit to £100 in 2021, contactless payments increased by almost 30% with higher value payments [7]. With the expected change to the £100 contactless limit, there are concerns consumers will overspend with impulse purchases.
Kara Gammel, Personal Finance Expert at MoneySuperMarket advises consumers to“consider lowering your limit or even switching contactless off altogether” to prevent regretful purchases [8].
How to prepare for the contactless limit removal
Whilst it is not expected there will be huge changes on the 19th March, it is important for merchants to stay updated as banks and providers begin to communicate their contactless limits with consumers.
Merchants should ensure their terminal software is up to date and equipped to take higher value purchases and ensure transactions amounts are clearly displayed to customers at all times.
At Handepay, we make accepting payments simple and straightforward. With a range of in-store and online payment solutions, no matter what your business requires we have you covered. Get in touch today to find out more about how we can support your business.
Sources
1. Financial Conduct Authority: Greater flexibility to be given for setting future contactless limits - https://www.fca.org.uk/news/press-releases/greater-flexibility-be-given-setting-future-contactless-limits (Accessed March 2026)
2. EBSCO: Contactless Payment - https://www.ebsco.com/research-starters/business-and-management/contactless-payment (Accessed March 2026)
3. UK Finance: TfL success story shows how contactless ticketing can benefit consumers - https://www.ukfinance.org.uk/blogs/tfl-success-story-shows-how-contactless-ticketing-can-benefit-consumers (Access March 2026)
4. BBC News: £100 contactless card limit to be lifted - https://www.bbc.co.uk/news/articles/cx2prjr4lpko (Accessed March 2026)
5. Financial Conduct Authority: Quarterly Consultation CP25/24 - https://www.fca.org.uk/publication/consultation/cp25-24.pdf (Access March 2026)
6. BBC News: Contactless card payments could become unlimited - https://www.bbc.co.uk/news/articles/czjv7jy2r9vo (Accessed March 2026)
7. UK Finance: Average contactless payment increases by almost 30 per cent since new £100 limit was introduced - https://www.ukfinance.org.uk/press/press-releases/average-contactless-payment-increases-almost-30-cent-new-%25C2%25A3100-limit-was-introduced (Accessed March 2026)
8. IFA Magazine: Finance experts share urgent warning as £100 contactless card limit is scrapped - https://ifamagazine.com/finance-experts-share-urgent-warning-as-100-contactless-card-limit-is-scrapped/ (Accessed 2026)