UK Could Scrap Contactless Spending Limits as Millions Ditch Cash

The way we pay in shops and restaurants could be about to change in a big way. The Financial Conduct Authority (FCA) has put forward proposals that would remove limits on contactless spending, a move it says would modernize Britain’s payments system and reflect how most of us now use our cards.

At the moment, there is a £100 cap per transaction and a £300 daily limit. Under the FCA’s plan, these restrictions would go. The regulator argues that contactless technology is now widely trusted, with strong fraud protections in place.

Barclays data shows just how embedded the habit has become: in 2024, 94% of eligible in-store card transactions were contactless, with an average purchase of £16.10. The typical user made 236 transactions over the year, reported the Express.

David Geale, the FCA’s executive director of payments and digital assets, said the change would make payments more efficient and give firms the flexibility to adapt to their customers. “We‘re seeing smarter payment technology and more well-established fraud controls, so it’s the right time to let firms tailor contactless payments to fit their customers’ needs and drive innovation. While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers. People are still protected; even with contactless, firms will refund your money if your card is used fraudulently.”

Not everyone is convinced. Fraud remains a big worry, and a BBC survey found that 78% of people opposed removing the caps. The FCA insists only low-risk transactions would qualify for higher limits, and it says providers will carry the burden of any losses rather than customers.

Despite these doubts, the popularity of tapping is hard to ignore. Older shoppers, once thought less likely to embrace new technology, are now one of the fastest-growing groups of contactless users.

Barclays reports that more than 84% of over-65s used contactless last year, often driven by the rise of self-service checkouts in supermarkets, coffee shops, and other venues.

Karen Johnson, head of retail at Barclays, warned that while technology is convenient, it cannot entirely replace people. “Consumer-facing businesses must continue to recognise the value that in-store members of staff can offer when it comes to fostering customer relationships and trust,” she said.

The consultation is open until 15 October. If approved, the removal of spending caps could come into effect early next year. Analysts say this would be a major milestone in Britain’s move towards becoming a largely cashless society.

The FCA insists the change is about catching up with how people already spend. But whether the public is ready to see limits scrapped altogether is another matter. For now, the debate is open, but if the regulator gets its way, paying with a quick tap could become limitless in 2025.