Trends and predictions for contactless payments in a post-£100 limit in the UK

Contactless payments in the UK account for a staggering portion of card transactions, making up around 65% of all credit card and 75% of all debit card payments according to UK Finance. Ever since the contactless limit increased from £45 to £100 during the pandemic, in-store payments have changed radically, reshaping the way consumers across age groups pay for their everyday expenses. 

The Financial Conduct Authority (FCA) recently announced that it’s considering the removal of the £100 contactless payment limit as part of a response to the UK prime minister's order for regulators to tear down barriers to economic growth.  

Interestingly, the FCA is also considering more flexible approaches to contactless payments regulation, including allowing merchants with advanced fraud controls in place to set their own contactless limits. A similar model has also been adopted in the US and there is no federally mandated contactless limit. Instead, issuers and networks set thresholds based on their own risk appetite and fraud prevention capabilities. 

Security and trust must lead the way 

Understandably, lifting the contactless limit brings concerns about card theft and unauthorised use. With physical cards, transactions under the current £100 limit typically require no PIN or biometric check, making them vulnerable if the card falls into the wrong hands. While issuers cap the number or total value of consecutive contactless transactions before a PIN is required, fraudsters can still exploit this window. 

Fraudulent contactless spending in the UK reached £41.5 million in 2023, marking a 19% increase compared to 2022. However, while 73% of all card transactions last year were contactless, fraud on contactless cards and devices accounted for just 8% of total card fraud losses. These figures highlight that contactless cards continue to offer consumers a secure and convenient way to pay. 

This is where digital wallets offer a compelling contrast to contactless cards. Solutions like Apple Pay and Google Pay allow users to spend above the £100 limit because each transaction is authenticated through biometrics (such as Face ID or fingerprint recognition). In essence, the security shifts from the card itself to the identity of the user. 

What this means for merchants 

For merchants, the implication is clear: to continue delivering speed and convenience at the point of sale, they must work with PSPs who can provide a complete package of fraud prevention tools that evolve alongside emerging identity standards. 

While biometrics and tokenisation are key, retail merchants can leverage traditional measures like PIN verification and Strong Customer Authentication (SCA) for secure contactless payments. Merchants who embrace a holistic approach to safeguarding their customers and business will not only be well prepared to mitigate risk but also gain trust at the point of sale.

Looking ahead 

Contactless payments in the UK have come a long way, from novelty to necessity. Getting it right will require more than technology. It will take collaboration between merchants, PSPs, banks and regulators and a shared commitment to balancing speed with security and convenience with control. 

The contactless future is about building smarter, more resilient payment journeys that work for merchants and consumers alike, one tap at a time.