Deep Patel, Partner and UK Payments Lead at global management and technology consultancy Capco, comments on the FCA's decision to provide firms with greater flexibility for setting future contactless limits, coming into force on 19th March 2026.
The FCA's move to remove the £100 cap on contactless payments and give firms greater control over limits is a natural evolution in payments, and one that is likely to be welcomed by card issuers.
However, consumer demand for higher limits remains relatively low, with ongoing nervousness around the potential for increased fraud. The FCA has been clear that any higher limits should apply only to low-risk transactions, placing the responsibility on payment service providers to deploy appropriate risk monitoring technology.
For issuers and PSPs with more advanced payments platforms, this creates a clear opportunity to differentiate. Firms will be able to tailor contactless limits to specific customer groups who are more likely to benefit from higher thresholds, such as corporate card users and high-net-worth individuals.
Over time, this also opens up opportunities to deliver additional value by learning from customer spending behaviour, including the potential to offer adjacent services such as financing.
But, adoption is unlikely to be consistent across the market. With mobile-based contactless payments already supporting higher limits through strong customer authentication, less sophisticated providers are more likely to retain lower card-based limits and increase them gradually in line with competitors and wider economic factors such as inflation.
Ultimately, while the regulatory change enables greater flexibility, the extent to which firms capitalise on the opportunity will depend on their ability to combine effective risk monitoring with more tailored customer propositions.
