By Aysu Bicer
LONDON (AA) - The UK’s £100 (nearly $134) limit on contactless card payments is set to be scrapped next year, potentially allowing shoppers to spend unlimited amounts without entering their pin, after the financial regulator announced major changes to the rules.
The Financial Conduct Authority (FCA) said on Friday that from March 19, banks and card providers will be able to set their own maximum contactless limits.
At present, contactless card payments are capped, while payments made using mobile phones are not.
There is also a cumulative limit of £300 or five contactless payments, after which customers must enter their pin.
Under the new rules, providers will be able to remove this restriction if they choose.
The FCA said the changes would allow firms to respond to changing consumer demands, inflation and new technology. It added that customers should be able to set their own limits or turn off contactless payments entirely.
In the short term, the regulator expects most providers to keep their current restrictions.
Contactless payments were introduced in 2007 with a £10 limit, which was gradually increased over time.
The limit rose to £45 during the pandemic in 2020 and to £100 in October 2021. A consultation on the latest changes was launched earlier this year.
The FCA said the rule change would only apply to banks and card providers with strong fraud controls in place.
Existing consumer protections will remain, including reimbursement for victims of unauthorized fraud, such as when a card is lost or stolen.