The financial penalty follows a decision by the United Kingdom’s Financial Conduct Authority (FCA) that rule changes, effective from March 2026, will permit banks and payment service providers to set their own thresholds for contactless payments.
The change could help people use contactless more easily, as the regulation is now less prescriptive for these firms and maintains protections that require firms to repay consumers in the event of any unauthorized fraud, the FCA said in a Friday press release.
“Contactless Payments are increasingly becoming the payment method of choice for consumers,” David Geale, F.C.A.’s executive director of payments and digital finance, said in the release. “We want to ensure that our rules allow for flexibility in the future, and choice for businesses and consumers.”
The FCA already imposes restrictions on the value and number of Contactless Payments people can make before they must enter their PIN.
The regulator announced in January that it was proposing to remove the current 100-pound (about $134) contactless limit, a move it said would give businesses and consumers more flexibility and help even the playing field with digital wallets.
It began inviting public comment on the proposal in March, after issuing an engagement paper that outlined various options for how the FCA could change its approach to contactless payment limits.
“We’ve moved quickly to advance this work, which is one of approximately 50 steps we put forward earlier in the year to help drive economic growth across the U.K., and in turn improve lives,” Geale said in a March press release.
In September, after reviewing feedback the agency received during the public-comment period, the FCA said in a statement: “We believed that firms have clear incentives to minimise contactless card and device fraud and there should be more options available for them to do this. It’s an area where we are working to become a smarter regulator and do not believe overly prescriptive rules are necessary to deliver good outcomes,” he said in a statement.
In a press release on Friday, the FCA said it anticipates that most banks and payment service providers will retain their current limits for contactless transactions in the months following the changes being put into effect, following consultation with industry.
