FCA proposes increase in UK contactless spending limit

FCA consultation paper on contactless spending limits graphic
CONSULTATION: The FCA is asking for feedback on increasing the contactless spending limit by 24 February

The UK’s Financial Conduct Authority (FCA) is proposing to increase the limit for single contactless payments in the country from £45 (US$62) to £100 (US$137) and the limit for cumulative contactless transactions from £130 (US$179) to £200 (US$274).

It is also proposing to exempt consumers from strong customer authentication (SCA) if they access their account information through an account information service provider and to facilitate third-party provider access to retail and SME customers’ accounts by mandating the use of dedicated interfaces by account servicing payment service providers.

The proposals are among those published in a new FCA consultation document concerning its regulatory technical standards (RTS) for SCA and common and secure methods of communication in the payments and e-money sectors.

“We are proposing changes to the SCA‑RTS to support competition and innovation in the payments and e‑money sector,” the FCA says. “The proposals include:

  • Adding a new exemption from SCA for when customers access their account information though an account information service provider (AISPs)
  • Mandating the use of dedicated interfaces (such as APIs) by account servicing payment service providers (ASPSPs) to facilitate third‑party provider (TPP) access to retail and SME customers’ payment accounts
  • Changing requirements for publishing interface technical specifications, availability of testing facilities and fallback mechanisms by account providers
  • Treating ASPSPs with deemed authorisation under TPR as exempt from the requirement to set up a fallback interface, where the ASPSP has an exemption from its home state competent authority
  • Increasing the single and cumulative transaction thresholds for contactless payments from £45 up to £100 (or potentially a maximum of £120) and from £130 to £200 respectively.”

“The payments landscape has grown and evolved in recent years, as business models adapt to user needs,” the FCA explains.

“The coronavirus (Covid-19) pandemic has accelerated these changes. This consultation will help us make sure regulatory expectations keep pace with the changing landscape. 

“We want to remove identified barriers to continued growth, innovation and competition in the payments and e-money sector (including open banking), while making the payments and e-money sector more resilient and protecting consumers if firms fail.”

Consultation on the proposed increase in contactless spending limits will close on 24 February 2021 and on the remaining proposals on 30 April 2021.

The full consultation document,  ‘CP21/3: Changes to the SCA-RTS and to the guidance in “Payment Services and Electronic Money — Our Approach” and the Perimeter Guidance Manual’ can be downloaded here.

City lobby group UK Finance proposed increasing the country’s contactless spending limit from £45 to £100 in January.

• Find full and up-to-date details of worldwide contactless limit increases in NFCW’s table of contactless transaction limit changes.

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