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.

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.PaymentsRead More

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