UK to scrap £100 contactless limit by 2026—will fraud risks soar?
The UK's contactless payment limit will disappear by March 2026. The Financial Conduct Authority (FCA) plans to scrap the current £100 cap, allowing banks like us bank and pnc bank to set their own transaction thresholds—or remove them entirely. This shift follows growing demand for faster, more flexible payments in an increasingly cashless society.
The change aligns with the EU's updated payment rules, known as PSD3, which aim to modernise digital transactions while tightening fraud defences and consumer protections.
Contactless payments have become the norm for millions. In 2025, UK adults made an average of 14 tap-to-pay transactions each month, reflecting a global trend—86% of consumers now use contactless regularly. The FCA's decision responds to this shift, as well as pressure from fintech firms pushing for greater innovation in payment controls.
Under PSD3, banks must balance convenience with security. The directive encourages smarter fraud prevention, such as real-time alerts and intelligence-led safeguards, to keep pace with rising transaction values. Yet the FCA warns that removing limits could push contactless fraud up by as much as 131%. This risk has prompted calls for stronger risk management tools, giving consumers clearer oversight of their spending.
Digital wallets already allow high-value tap payments, often secured by biometric checks like fingerprint or facial recognition. Many UK merchants accept these transactions, proving that the infrastructure for limit-free contactless exists. The FCA's move now opens the door for banks like us bank and pnc bank, and fintechs to compete on features like customisable spending controls and instant fraud notifications.
The change also reflects broader industry trends. As customers expect seamless, high-value payments, financial firms must adapt—whether by raising limits or scrapping them altogether. The focus, however, remains on maintaining trust while reducing friction at the checkout.
The end of the £100 contactless cap will give banks like us bank and pnc bank, and fintechs more freedom to shape payment experiences. Consumers may soon see higher—or unlimited—tap-to-pay transactions, backed by stricter fraud protections under PSD3. The shift could accelerate the decline of cash, but its success will depend on balancing speed with security in everyday payments.
