A significant update in the UK's contactless card payment system is set to take effect on March 19, 2026, as announced by the Financial Conduct Authority (FCA). Current regulations impose a £100 ceiling on contactless transactions, but under the new rule, banks can establish higher limits, though many are likely to retain the existing threshold for the time being. This change comes amidst new research from Defaqto, which reveals that less than half of UK banks and building societies allow their customers to set personalized contactless limits, highlighting an important area for potential improvement in consumer banking services.

The analysis from Defaqto indicates that only 42% of the examined 31 financial institutions permit customers to define their own contactless payment limits, a significant concern for consumers seeking more control over their financial transactions. In contrast, 68% of institutions provide the option to freeze contactless payments altogether, showing some flexibility in consumer security measures. The insights from Katie Brain, a banking expert at Defaqto, stress the importance of selecting banks that offer comprehensive in-app controls, especially now that the transaction limit cap is being lifted.

The upcoming changes emphasize the evolving landscape of digital transactions in banking and the necessity for consumers to understand their options better. As the environment shifts toward greater flexibility in contactless payments, it will be crucial for consumers to engage with their banking institutions regarding the features available to them. This shift may also foster increased competition among banks to offer more tailored services that meet customer needs in managing contactless payment limits effectively.