Currently, the contactless payment limit means consumers have to place their PIN into the card machine if more than the limit to approve a payment.
The FCA said that smarter technology and more well-established fraud controls meant it was the right time to let there be more flexibility on limits.
It quoted the UK Finance’s Annual Fraud Report 2025 which estimated that contactless fraud rates are currently low at circa 1.3p per £100 spent on contactless transactions, compared to 6p per £100 for all unauthorised fraud.
In April 2025, Barclays Consumer Spend data found that a record 94.6% of all eligible in-store card transaction were made using contactless in 2024, surpassing the previous year’s record of 93.4%.
As far back as 2022 research by Zonal found that nine in ten consumers used contactless payments most of the time they visit a pub, bar or restaurant.
Preferred payment
Trade body UKHospitality (UKH) broadly welcomed the move.
UKH chiar Kate Nicholls said: “Any measure that makes processes easier for consumers, such as lifting any cap on contactless payments, is something we welcome.
“Contactless has become the preferred payment method for the majority of people, due to its convenience and efficiency, and lifting the limit that can be spent per transaction will mean a quicker and easier experience for consumers.”
She added: “The one caveat is that we would not condone any spike in fees for operators from banks or terminal providers, as a result of this change, as the sector is already being squeezed by sky-high operating costs that are leaving hospitality businesses taxed out.”
Managing director of business finance experts Aurora Capital added: “For many retailers and hospitality venues, the £100 ceiling is already high enough to cover most purchases. Removing it could potentially lift average spend and encourage bigger sales, but it also introduces new concerns.
Compliance costs
“SMEs are already paying for upgraded terminals and compliance costs every time the rules change. Changes in limits may require retailers to update terminal software or configuration.
“While not necessarily a huge cost, even system re-configurations can take time and might require expert technical support, which won’t come free.”
Though licensee of former Great British Pub of the Year the Tollemache Arms in Northamptonshire, Joe Buckley, said the proposal to lift the £100 limit presented an opportunity to empower both consumers and businesses by offering greater flexibility in transactions
“In today’s fast-paced world, where convenience and speed are paramount, allowing operators to set their own limits can enhance the shopping experience.
“Without a fixed cap, customers can make larger purchases seamlessly, which not only saves time but can also help businesses improve their sales volumes.
“This shift aligns with the growing trend towards digital payments, reflecting the modern consumer’s preference for efficient and hassle-free transactions,” he said.
Buckley added the removal of the restriction could stimulate economic growth by encouraging more transactions, especially among small businesses that might benefit from higher-limit sales in a single swipe.
However, owner of The Dog at Wingham in Canterbury, Mark Bridgen, issued a note of caution saying a limit should remain as it could be open to abuse. He suggested increasing it to £150 a transaction.
“If people want easy/quick contactless use they should get their cards on their phones,” he said.
