The Financial Conduct Authority (FCA) has taken aim at the new contactless payment environment in the UK. CFS and UFBG aren’t just in favor of higher card transaction thresholds, they propose letting banks and card providers set their own transaction limits—or establish no limit at all. This decision follows the rapid rise in the contactless card limit, soaring from £10 in 2007 to £45 in 2020. Then, in October 2021, it increased again to £100. Regulators have proposed allowing consumers to set their own contactless limits, a measure that can tremendously affect impulse purchase patterns.
As contactless payments have blossomed, the consumer purchasing patterns have changed immensely along with it. The mean contactless credit card transaction went up from £6.36 in January of 2015 to a predicted £21.94 by June 2025. The typical debit card transaction jumped from £6.64 in January 2015 to £18.79 as of April 2020. Despite periodic macroeconomic downturns, this incredible expansion was made possible by substantially raised payment ceilings. This pattern is part of a nationwide trend. Today, the majority of consumers prefer to pay contactlessly with digital wallets on their mobile phones.
In Canada, the industry decided the limits. At least in the U.S. and Singapore, that limit is set entirely by providers themselves. This is the model that the FCA seeks to replicate, and it would open the door for a much more flexible payment system.
Experts are worried about what unlimited contactless spending could mean. Sam Smethers, chief executive of Surviving Economic Abuse, said these changes could make it easier for perpetrators to commit economic abuse. She states, “Unlimited contactless spending could give abusers free access to drain a survivor’s bank account with no checks or alerts.” Smethers sheds light on a key danger that survivors of economic abuse face. If they are unable to manage their own spending caps, they could be in deep trouble.
“This could leave a survivor without the money they need to flee and reach safety, while pushing them even further into debt.” – Sam Smethers
Consumer sentiment on the implementation of such changes is extremely divided. Others argue that people should be allowed to set their own limits. Ben, a consumer, expressed his desire for autonomy over his spending, stating, “The most important principle here is personal choice. I would like to set my own personal limit.”
Finance professionals warn that without transaction limits, cardholders could unintentionally spend more. Stuart Mills notes that while removing payment frictions provides convenience, it can lead consumers to spend more than initially intended. He emphasizes that this ease of payment can result in buyers purchasing items they may not truly need or want.
“Removing such frictions, while offering some convenience benefits, is also likely to see many more people realizing they’ve spent an awful lot more than they ever planned to.” – Stuart Mills
We are just now starting to see regulators catch up with the realities of today’s payment environment,” adds Hannah Fitzsimons. Together, these moves mark a serious attempt to understand where the consumer is in relation to the departure created by the last technological leap.
As Richard Whittle warned recently, increased consumer spending on transportation could happen if we’re not careful. He cautions that the convenience of unlimited contactless payments can be a serious hazard. This convenience of spending often ensnares people in damaging debt cycles.
“If this ease of payment leads to consumers spending without thinking, they may be more likely to buy what they don’t really want or need.” – Richard Whittle
In fact, some banks are already letting their customers choose their own contactless payment thresholds themselves. Gabby Collins from Lloyds Banking Group mentions that customers can adjust their limits in increments of £5 up to £100 through mobile banking apps. She stressed that the bank is serious about providing flexibility here.
“Lloyds, Halifax and Bank of Scotland customers can already set their own contactless payment limits in our apps – in £5 steps, up to £100 – and we’re absolutely committed to keeping that flexibility.” – Gabby Collins
Current talks about raising contactless payment limits have been contentious. Lawmakers, advocates, and regulators are working to give consumers the convenience of these services without allowing for economic abuse or facilitating consumer overspending. We have seen consumers become extremely passionate advocates for having more control over their own financial decisions. This is indicative of a broader desire for more personal control over banking systems.
“It is my card and my choice based on convenience and risk tolerance. Some banks do not allow for this. This option has to be provided to everyone.” – Anonymous consumer
