Changes to contactless payment limits came in on 19 March.  As a result, the FCA has published an updated payments services approach document to include updated guidance on exemptions from strong customer authentication (SCA), including the contactless payments exemption. The guidance includes:

No SCA for low‑risk contactless transactions

Payment service providers (PSPs) must not apply SCA at the point of sale when a payer initiates a contactless electronic payment that the PSP has reasonably assessed as low risk. This is subject to the requirements in Article 2 of the SCA Regulatory Technical Standards (SCA RTS).

Assessing low‑risk transactions

As well as the factors in Article 2(2) of the SCA RTS, PSPs may take into account other risk‑based indicators, for example, a payer's typical spending or behavioural patterns, or their location. PSPs may also identify a transaction as low risk by looking at the value of the individual contactless payment, the cumulative value of previous contactless payments, or the number of consecutive contactless transactions since SCA was last used. PSPs may set limits on the use of contactless payments to reflect these assessments.

Monitoring fraud rates

PSPs should monitor their overall fraud rate for in‑person contactless payments. A significant rise in fraud could indicate that payments are being processed outside the scope of the exemption.

Consumer duty considerations

PSPs relying on the contactless exemption must make sure that they comply with their consumer duty obligations, including when adjusting contactless limits. The FCA also emphasises the importance of considering the impact on vulnerable consumers.

Customer‑set limits

PSPs should consider offering customers the ability to set their own personal contactless payment limits and should communicate clearly when this feature is available.

The FCA's amended guidance reflects changes to contactless payment limits that came into force on 19 March 2026. Following consultation, in December 2025, the FCA confirmed that banks and payment providers with strong fraud controls would be able to set their own limit for contactless payments. It is up to firms if and when they take up the greater flexibility to change any contactless limits. Based on industry feedback, the FCA understands that most banks and payment service providers are likely to maintain their existing contactless limits for the foreseeable future, even after the changes come in. However, those who do make changes, will need to communicate them clearly to their customers under the Consumer Duty.