Huge change to card payments could impact all shoppers

A change to how we pay at tills could soon be implemented as the contactless limit for card payments may be removed. The financial regulator wanted to allow shoppers "greater flexibility".

The Financial Conduct Authority (FCA) confirmed removing the £100 contactless limit is possible. The payment was increased to £20 in 2012 then £30 in 2025, before raising to the current £100 limit in October 2021. In October, a study by UK Finance found contactless payments accounted for 65 per cent of all credit card and 77 per cent of all debit card transactions.

The authority confirmed it would be looking into contactless payments after the Government asked what steps the regulator could take to help support economic 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. Shoppers would be able to spend more money without using their pin.

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Apple Pay works by adding your payment card to your wallet app and then using face or fingerprint recognition to confirm the payment. Google Pay works by users taking a photo of their card before using the app to pay.

The FCA also confirmed it could soon ease mortgage rules to help more first-time buyers get on the property ladder. Under current rules, lenders are limited in how many large mortgages they can approve.

There is a cap that means no more than 15% of a lender's mortgage book can compromise loans for properties costing more than 4.5-times the buyer’s annual salary. Rental payments may also soon be included as part of your borrowing, rather than focusing just on your income, reports The Times.

Rightmove mortgage expert Matt Smith said: "It is really encouraging that the market regulators are now considering what a review of mortgage affordability could look like.

"Regulatory change is what we've been calling for, as that is what is needed to truly impact home-mover affordability, particularly for first-time buyers. We've seen some innovative products and schemes announced by lenders to try and do their bit to support home-buyers, but they need support from both the government and regulators to really drive more options for people."