The UK Financial Conduct Authority (FCA) has announced plans
to remove the £100 contactless payment limit. This move will allow businesses
and consumers more flexibility.
The decision follows the success of digital wallets with
biometric logins, which currently bypass the limit. The FCA’s plan is
influenced by the experience in the US.
FCA Plans Open Finance, SME Support
In addition to this, the FCA is focusing on open finance
reforms, particularly in small and medium enterprise (SME) financing. The FCA
plans to prioritize SME lending under new powers expected from the Data (Use
and Access) Bill. It also aims to introduce variable recurring payments in open
banking.
FCA to remove £100 contactless limit https://t.co/XgovZk7yHK
— Finextra (@Finextra) January 22, 2025
Pushes for Digital Identity, Reform
The FCA is focusing on a digital-first approach under the
leadership of a new executive director for payments and digital finance. This
director will also lead the Payment Systems Regulator. Existing reforms,
including those in securities settlement, digital assets, and pensions, will
continue.
The FCA has also suggested that the Government take action
in three areas: improving digital identity verification, enhancing the
Companies House database, and digitizing court systems to reduce delays.
Regulators Review MoU to Strengthen Cooperation
The rapid growth of the payments industry has led UK
regulators to reassess their collaboration. The Bank of England, Financial
Conduct Authority (FCA), Prudential Regulation Authority, and Payment Systems
Regulator recently reviewed their Memorandum of Understanding (MoU) for payment
systems, as reported by Finance
Magnates earlier.
In a statement, the FCA noted that the regulators identified
areas for enhanced cooperation to align with the government’s National Payments
Vision. As required by the Financial Services Banking Reform Act 2013, the four
authorities review their MoU annually to outline their collaboration on
oversight, regulation, and innovation in payments.
The 2024 review highlighted improvements in data sharing and
expertise exchange. However, senior representatives recognized the need for
further alignment and plan to update the MoU by the second quarter of 2025. The
National Payments Vision, published in November 2024, sets out priorities for
modernizing payment systems with a focus on innovation, resilience, and
inclusivity.
This article was written by Tareq Sikder at www.financemagnates.com.
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