London: The UK's current £100 cap on contactless card payments is set to be abolished next year, allowing consumers to potentially make unlimited transactions without the need to enter a pin. This change follows an announcement from the financial regulator regarding significant alterations to the existing rules.

According to Anadolu Agency, the Financial Conduct Authority (FCA) revealed that from March 19, banks and card providers will have the autonomy to establish their own maximum contactless payment limits. Presently, contactless card payments are limited, while those made through mobile phones are not. Additionally, there is a cumulative cap of £300 or five contactless transactions, after which users must input their pin. The new regulations will permit providers to eliminate this cumulative limit if they choose to do so.

The FCA stated that these changes are designed to enable companies to react to shifting consumer preferences, inflation, and emerging technology. It further noted that customers should be empowered to set personal limits or even disable contactless payments if they wish. In the immediate future, the regulator anticipates that most financial institutions will maintain their existing limitations.

Contactless payments were initially introduced in 2007 with a £10 cap, which has been incrementally raised over the years. The limit increased to £45 during the pandemic in 2020 and was further elevated to £100 in October 2021. A consultation regarding the most recent changes commenced earlier this year.

The FCA highlighted that the rule modification will only be applicable to banks and card providers that have robust fraud prevention measures in place. Current consumer protections will continue to be enforced, including compensation for victims of unauthorized fraud, such as in cases where a card is lost or stolen.