What will contactless payment changes mean for you and your money?

A big change is coming to contactless payments – and it could have a big impact on your spending habits.

The £100 limit for contactless transactions is being scrapped on 19 March.

On the one hand, the changes could give people more choice and flexibility when using contactless payments.

But on the other, paying by card could become so convenient that you might lose track of how much you’re spending.

What’s changing?

The £100 limit on contactless payments applies to most debit and credit cards.

But under the new rules, individual banks will be able to set their own contactless limits instead.

Meanwhile, customers will be able to choose their own personal limit through their banking app. 

And in some cases, you might also have the option to switch contactless payments off completely.

Why flexibility could be good for consumers

Many people will find the changes will give them more control and make life easier.

For example, if you have regularly make bigger purchases in shops, supermarkets or restaurants, choosing a higher limit might be more convenient for you.

Or you might go the other way completely.

If you want tighter control over your spending, you might choose to set a lower limit, so you don’t run the risk of going over budget.

Could the changes make you overspend?

The idea of making giving consumers more flexibility when it comes to contactless payments makes sense.

But there’s always a risk that it could also make spending feel a little bit too easy.

And for some, higher limits may feel like subtle pressure or tacit permission to spend more.

The existing £100 cap sounds will sound like a natural spending barrier to many, and a number we’re psychologically conditioned to not go over.

Simply knowing this limit is there can make you stop to think if you’re about to make a larger purchase or throwing items in the supermarket trolley without thinking about the total cost.

But if limits go up significantly, it could become much easier to spend larger amounts without really noticing.

And that could be a problem if you’re already struggling to keep track of your spending.

Changes may cause confusion

Another issue is that not every bank will introduce new limits at the same time, and some may choose not to change them at all.

So customers may see different rules depending on which bank they use.

This means it’s essential that banks clearly communicate with customers, so everyone understands what’s changing.

Will contactless changes increase the risk of fraud?

Some people are already suspicious of contactless payments, as they think it opens the door to potential fraudsters.

But the FCA stresses that banks and payment providers must have strong fraud controls when processing contactless transactions. 

As a result, it believes the changes could give firms an incentive to strengthen their fraud prevention measures even further.

And significantly, existing consumer protections will remain in place, so if your card is lost or stolen and used for unauthorised payments, you’ll still be reimbursed.

The message is that while contactless limits may change, the basic protections around card fraud should and will stay the same - or get better.

What you can do to stay safe

If you’re not sure about the changes to contactless limits, there are few steps you can take to stay in control of your payments.

Remember that using contactless is optional

You don’t have to use contactless. 

It’s your choice.

So if you prefer, you can carry on using chip and PIN or other payment methods.

Or you can check your banking app settings and turn contactless off altogether.

Review these settings and choose whatever works best for you.

Don’t be afraid to ask for help

If the changes feel confusing or stressful, then don’t worry.

Banks are expected to explain any updates clearly.

And if you’re still not sure about what they mean for you, you can contact them directly for answers to your questions.

Review your budget

If you’re worried about the possibility of overspending, make sure you know how much money you have coming in and how it’s being spent.

You’ll then be able to work out exactly how much you have available for essential costs, as well as treats and luxuries.

Check out our guide to how to create a budget to get started.