Major change to contactless payments at Tesco, Aldi and Asda with key date this week

A BBC pundit has revealed that a significant shift at the checkout is on the horizon, set to affect shoppers at major like , , , and . The Financial Conduct Authority (FCA) is proposing plans to scrap the contactless payment cap in an effort to stimulate the economy.

This change would allow customers to breeze through the checkout without fumbling with their cards for transactions over the current contactless limit, potentially fuelling economic expansion. Speaking on Morning Live, expert Holly Hamilton commented: "If you think about it, 95% of us in the last year use contactless at some point. So it is kind of the main way that we tend to purchase things now and gradually I think the biggest change was in 2021."

She recalled the pandemic's impact on payment habits, saying: "If you think back to COVID, the limit went up to £100. Do you remember people had a lot of reservations about that time as well, because people rightly so, were concerned about security, but also we didn't want to handle money and spread COVID at that time, so people were quite willing to get involved with that and so it's slowly crept up. We're now at the £100 mark, and now we're talking about this consultation, which could actually put it up even more, if not remove the limit altogether."

READ MORE:

READ MORE:

Ms Hamilton revealed that officials are seeking feedback before implementing the change, with the deadline for responses being this Friday. She said: "This is the Financial Conduct Authority they've put this consultation out, and they're asking us, how do we feel about this, and as you've rightly said, mixed feelings, people still have reservations about it, and they'll not just talk about the fact that there might be a cap on this."

She added: "It'll also ask shops and businesses how they feel about it as well, and might ask them in terms of what they could do, so they might be able to put their own limits on it as well, but very much looking at the language around this consultation, it's very much talking about how we can keep people safe from scammers and fraudsters and that sort of thing. This consultation comes to an end on Friday and if those changes are approved, we could see that cap lifted or removed altogether within the next 12 months."

The Financial Conduct Authority (FCA) has proposed plans to remove that limit in an effort to stimulate economic growth. This would mean people won't have to remember their pin number so frequently to get their shopping.

The FCA elaborated more in a letter to Prime Minister Sir about the plans. The FCA Chief Executive Nikhil Rathi has outlined plans to encourage growth, which will involve taking 'greater risks and rigorously prioritise resources'. However, some critics have voiced concerns over proposals to increase the limit on contactless payments, arguing that it could make it easier for fraudsters to misuse stolen cards for high-value purchases.

The FCA has announced plans to "remove" the £100 contactless limit, "allowing firms and customers greater flexibility, drawing on US experience, and levelling the playing field with digital wallets". Currently, digital wallets with biometric logins can bypass the limits applied to payment cards at the checkout.

As part of this year's plans, Mr Rathi stated that the FCA could: "Remove the £100 contactless limit, allowing firms and customers greater flexibility, drawing on US experience, and levelling the playing field with digital wallets."

Jeremy Light, Co-founder at digital payment company Fourdotzero, previously suggested that retailers might be able to set their own maximum payment level. He said: "I believe that "drawing on US experience" means allowing individual retailers to set their own contactless limits, which is fair.

"I hope so - then retailers can set limits to their own risk appetite based on their own experience, rather than being forced to accept high value unauthorised, potentially fraudulent card payments. Otherwise, raising the contactless card limit further will increase contactless fraud. It jumped 80% (according to UK Finance's 2024 fraud report) in 2022 after the limit was raised from £45 to £100 in late 2021 and rose a further 19% in 2023.

"UK Finance plays down the significance of contactless fraud - although one third of all lost and stolen card spend (i.e. fraud ) was contactless in 2023, it was relatively low in total at £41.5 million, with the contactless fraud-to-turnover ratio below that for unauthorised card fraud overall. Any changes the FCA makes to contactless limits must keep a lid on fraud."

Following a slump in retail sales during December 2024, the Financial Conduct Authority has reportedly proposed potential strategies to "tear down barriers to economic growth" to the Prime Minister, which includes alterations to contactless payments. The UK's economy experienced slight growth in November 2024 (+ 0.1%) after contracting in the previous two months, but this growth still fell short of expectations.

Chancellor is facing mounting pressure to restore consumer confidence. The FCA also suggested that increasing the limit would provide firms and customers with more flexibility and help to level the playing field with digital wallets.

To have your say on the FCA consultation, you can respond before the deadline on.