FCA Eliminates £100 Contactless Limit: What You Need to Know!

FCA Eliminates £100 Contactless Limit: What You Need to Know!

In response to a letter from the Prime Minister and Chancellor regarding the need for enhanced risk-taking to support the Government’s growth agenda, the Financial Conduct Authority (FCA) has announced a strategic shift towards a digital-first approach. This initiative will be spearheaded by a newly appointed executive director for payments and digital finance, who will also oversee the Payment Systems Regulator.

Key Initiatives from the FCA

The FCA has outlined several significant measures aimed at reforming the financial landscape, which includes:

  • Reforms to Securities Settlement: Enhancements will be made to improve the efficiency and security of securities transactions.
  • Focus on Digital Assets: The FCA is exploring the regulatory framework surrounding digital currencies and assets.
  • Pension Innovations: New strategies will be developed to modernize pension management and accessibility.

Open Banking Developments

In addition to the planned reforms, the FCA is considering:

  • The introduction of variable recurring payments in the open banking sector.
  • Utilizing powers under the Data (Use and Access) Bill to foster open finance, with a potential emphasis on SME lending.

Removal of the £100 Contactless Limit

In a surprising development, the FCA has announced it will eliminate the £100 contactless payment limit. This change aims to provide both firms and customers with more flexibility, drawing inspiration from practices in the United States. This adjustment is expected to level the playing field with digital wallets, which currently bypass the limits imposed on traditional payment cards.

Government Collaboration for Legislative Reform

The FCA is urging the Government to engage in legislative reforms in three key areas:

  1. Digital Identity Authentication/Verification: Enhancing these processes could unlock significant benefits for consumers and businesses.
  2. Improving the Companies House Database: Upgrading the quality of this database could lead to reduced operational costs for businesses.
  3. Digitization of Court Systems: This initiative aims to minimize delays and improve efficiency within the legal system.
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With these initiatives, the FCA is positioning itself as a leader in fostering a more dynamic and flexible financial environment. For further insights on digital finance and regulatory updates, visit the FCA’s official website.

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