The United Kingdom has moved to lift the long-standing cap on contactless card payments, allowing banks, card issuers and retailers to set their own transaction limits under updated regulatory guidance.

The change marks a significant shift in the country’s payments framework, ending the one hundred pound ceiling that had been in place for several years and reflecting the growing role of digital payments in everyday commerce.

Under the new approach, firms will be responsible for determining appropriate limits based on their risk controls, fraud prevention systems and customer needs.

Regulators said the decision is designed to promote flexibility and innovation while maintaining strong consumer protections.

Payment providers will be expected to clearly communicate any limits to customers and ensure robust safeguards are in place to prevent misuse or fraud.

The reform follows a steady rise in contactless usage across the UK, accelerated by changes in consumer behaviour and advances in payment technology.

Businesses have argued that fixed regulatory caps no longer reflect real-world spending patterns, particularly for groceries, travel and hospitality, where customers increasingly rely on tap-and-go payments for higher-value transactions.

Supporters of the change say it will reduce friction at checkouts, improve efficiency for retailers and give consumers greater convenience and choice.

Regulators emphasised that removing the cap does not mean unlimited contactless spending by default, noting that many firms are likely to retain internal limits tailored to their customers.

The update forms part of a broader strategy to modernise the UK’s payments system, encourage competition and ensure regulation keeps pace with technological change.

As firms roll out their own limits in the coming months, customers are expected to see more variation in contactless thresholds depending on their bank, card provider and merchant policies.