Major change to how shoppers buy items set to be introduced
The £100 cap on contactless payments may be scrapped in a major shakeup of how people shop.
Contactless payments are currently limited by regulator the Financial Conduct Authority (FCA).
But as the cost of living sends the price of every items ever higher, it is considering scrapping it to support growth.
If approved, caps would be set by banks and payment providers themselves.
This already happens with Apple Pay and Google Pay, which has no limit in the UK although some retailers set their own.
The FCA recently sent a letter to the Government on the steps it is taking to support growth.
It suggested that one step could be to remove the contactless limit.
This would ‘allow firms and customers greater flexibility and level the playing field with digital wallets’, it said.
The move would bring the UK in line with the US, where there is no fixed limit.
This allows customers in shops to use contactless for the majority of their payments and transactions.
In October, a study by UK Finance found contactless payments accounted for 65% of all credit card and 77% of all debit card transactions.
Overall Britons made 1.6billion contactless card transactions in that month.
Contactless payments were first introduced in 2007 with a cap of £10. The limit gradually increased until 2021 when the £100 limit came in.
A spokesman for UK Finance said: ‘We are continuing to speak to the FCA to understand their thinking and plans.
‘We understand they are looking at whether industry can have greater involvement and flexibility in the limit in the future.’
The suggestion by the FCA was one of the changes it is considering to help secure growth.
Other suggestions include relaxing mortgage rules to make it easier for first time buyers to get on the property ladder.
They also suggested requiring firms to accept electronic verification of death to speed up bereavement claims in insurance.
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