The Financial Conduct Authority said the move would make regulation ‘less prescriptive’ and would give firms greater control, claiming the removal of the limit would ‘promote innovative payment methods or fraud prevention solutions’.

The contactless limit review forms part of the FCA work, announced in January in a letter to the prime minister, to support growth.

One option is to allow financial institutions, which use technology to reinforce strong fraud controls, to set their own limits as happens in the US. The FCA would set a reference rate for fraud that banks would have to follow.