Firms could set own contactless card limits under changes planned by regulator

Laura Suter, director of personal finance at AJ Bell, said: “Back in 2021 the contactless limit was just £30, before jumping to £100 as shopping habits changed after the pandemic. Now we’re heading into the next phase, with banks and payment providers being given the freedom to set their own contactless limits. And, crucially, to let customers set theirs too or switch contactless off if they want.

“Contactless has become the default way people pay, with the vast majority of in-store card transactions now done with a tap. This change reflects the fact that the majority of us default to paying by contactless, and gives firms the flexibility to match how people actually spend their money day to day.

“But while it’s clearly convenient, there are two big risks involved in this switch. First, if your card is lost or stolen, higher contactless limits are a paradise for thieves, who could rapidly rack up huge spending before the card is blocked.

“Second, easier spending can make it harder to keep track of your finances. When you don’t have to stop and think about a payment, it’s easier to spend more than you intended, particularly for people already juggling debts.

“That’s why choice really matters. Being able to set your own limits, or turn contactless off altogether, gives people more control, whether that’s to protect themselves from fraud or simply to help stick to a budget.

“The changes don’t come into place until March next year, so payment providers and banks have time to decide what level of flexibility they will offer. The onus is then on them to clearly tell customers what their options are and how to put controls in place, for those who don’t want unlimited contactless limits.”