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UK Regulator Proposes Scrapping £100 Cap on Contactless Card Payments

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The Financial Conduct Authority (FCA) has proposed removing the current £100 limit on contactless card transactions in Britain, allowing banks and card providers to set their own thresholds.

Key Points

  • Current cap: £100 ($135.35).

  • Proposal: Card providers gain flexibility to set limits based on customer needs.

  • Rationale: Supports economic growth and prioritises digital solutions, part of 50 FCA measures announced earlier this year.

Customer Protection

  • Cardholders can already adjust their own limits or disable contactless.

  • Fraud protections remain in place: providers must refund money if cards are used fraudulently.

FCA Statement

David Geale, FCA’s Executive Director of Payments and Digital Finance, said:

“While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers.”

Timeline

  • Consultation period: Open until October 15.

  • Potential rollout depends on industry feedback and FCA’s final decision.

US CFPB Fines Cash App-Parent Block Over Insufficient Fraud Protection

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The U.S. Consumer Financial Protection Bureau (CFPB) has imposed a penalty on Block, the parent company of the popular mobile payment service Cash App, over allegations of inadequate fraud protection measures. According to the CFPB, Block directed Cash App users who experienced fraud-related losses to contact their banks for transaction reversals, but these claims were subsequently denied. The regulator further accused Block of using various tactics to prevent users from seeking help, ultimately reducing the company’s own costs.

Cash App, one of the largest peer-to-peer payment platforms in the U.S., allows users to send and receive money, accept direct deposits, and make purchases using a prepaid card. CFPB Director Rohit Chopra criticized Cash App for failing to fulfill its responsibilities, burdening local banks with problems caused by the company’s actions.

Block, led by Twitter co-founder Jack Dorsey, responded by stating that the issues cited were historical and no longer reflect the current Cash App experience. The company emphasized that it disagreed with the CFPB’s characterizations but chose to settle the matter to move forward and prioritize its customers and business.

The enforcement order includes a $55 million penalty to be paid into the CFPB’s victim relief fund, along with up to $120 million in compensation. Block has also been required to establish a 24-hour live customer service for investigating unauthorized transactions and issuing refunds.

Additionally, the company agreed to pay $80 million to settle with 48 state financial regulators. This penalty comes amid other actions taken by the CFPB against financial services, including a lawsuit against Zelle and major banks last month.