Contact card limits could be AXED under new plans to change the way you pay at tills
A MAJOR change that will affect the way you pay at the till could be rolled out soon.
The Financial Conduct Authority (FCA) is considering plans to scrap the limit on contactless payments, making it easier to pay in just one tap.
Contactless transactions currently have a £100 payment limit.
But the regulator is now considering whether removing or increasing the contactless limit could benefit consumers, businesses and economic growth.
The move would allow you to make big purchases without the hassle of entering your PIN or fumbling around for cash.
The FCA said families and businesses across the country could benefit from greater choice, flexibility and smoother purchases.
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The move could also give firms greater control and could help them to promote new payment methods and fraud prevention solutions.
One option being considered is to allow firms, who use technology to reinforce strong fraud controls, to set their own limits.
This is the current system in the US.
The FCA said it will focus on how consumers are protected in the case of any changes to contactless limits.
Under the current rules firms are required to reimburse consumers in cases of unauthorised payment fraud, for example if their card is lost or stolen.
These rules will remain in place.
Contactless payment fraud is a very small part of overall payment fraud and a relatively small part of unauthorised payment fraud.
Fraudulent contactless spending totalled £41.5million in 2023, according to industry trade body UK Finance.
Although this was a 19% increase on the 2022 figure, UK Finance suggests the increase is at a much slower pace than the rise in the number of payments and amounts.
Any changes would need to provide "good customer outcomes" under FCA Consumer Duty guidelines that were published in 2023.
Credit card need-to-knows
Not using a credit card effectively can wreak havoc on your finances and your credit score.
If you don't keep up with repayments or default on your debt, you are likely to get a black mark on your credit record, which could affect your ability to get a credit card, loan or mortgage in the future.
It's important not to let yourself get sucked into overspending.
You should always clear the full balance as soon as possible.
If you have a poor credit score, don't bank on being approved for a card or getting the 0% deal you'd hoped for.
Card providers only have to give the advertised rate to 51% of applicants, so you could end up paying more interest than you bargained for.
If you've got a poor credit record, you're less likely to get the best rates.
And if you are looking for a new credit card, don't apply for lots at once.
After your 0% period is up, lenders can charge upwards of 40% interest, so if you have not repaid the debt fully by then, try to move the debt onto another 0% deal.
David Geale, executive director of payments and digital assets at the FCA, said 85% of people in the UK currently make contactless card payments each month.
He added: "This is the perfect opportunity to explore whether we can improve and increase trust in the UK’s payments system.
“We’ve worked fast to progress this work which is one of around 50 measures we put forward at the start of the year to help support economic growth across the UK and, in turn, improve lives.”
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Meanwhile, economic secretary to the Treasury Emma Reynolds added: "Every regulator has a part to play in the collective mission to drive growth through our Plan for Change, which puts more money into working people’s pockets."
She added that the move is a "welcome step to ensure that families can safely benefit from more flexibility when making purchases."
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