Business
Spending without thinking is a risk with unlimited contactless cards
Kevin PeacheyCost of living correspondent and
Tommy LumbyBusiness data journalist
Getty ImagesSpontaneous spending is likely to rise if the limit on contactless cards is increased or scrapped entirely, academics say.
At present, the need to press a four-digit PIN for purchases over £100 gives people a timely prompt about how much they are paying, lowering the risk of debt-fuelled purchases.
Earlier this week, the UK’s financial regulator proposed that banks and card providers set their own limits, or are allowed to remove them entirely. That would make entering a PIN even more of a rarity.
Banks, and some BBC readers, say consumers should be able to set their own contactless limits, as debate on the issue picks up ahead of a final decision later in the year.
Reckless or over-regulated?
Contactless payments have become part of everyday life for millions of people across the world.
When they were introduced in the UK in 2007, the transaction limit was set at £10. Increases in the threshold since then included relatively big jumps around the time of the pandemic, to £45 in 2020, then to £100 in October 2021.
They prompted surges in the average contactless spend.
Clearly, the average would rise because more, higher value, purchases could be made via contactless, without a PIN.
But what is much harder to quantify is whether people were spending more frequently, and larger amounts, than would have been the case if they had needed to enter a PIN.
Richard Whittle, an economist at Salford Business School, says the extra convenience for consumers can come at a cost.
“If this ease of payment leads to consumers spending without thinking, they may be more likely to buy what they don’t really want or need,” he says.
He says this could be a particular issue with credit cards, when people are spending borrowed money and accumulating debt. He believes regulators should consider whether to have different rules for contactless credit cards than for contactless debit cards.
Stuart Mills, a lecturer in economics at the University of Leeds, says cash gives “visible and immediate feedback” on how much money you have, while a PIN is an “important friction point” for controlling spending.
“Removing such frictions, while offering some convenience benefits, is also likely to see many more people realising they’ve spent an awful lot more than they ever planned to,” he says.
Both these academics have raised this concern before, but this is not solely a theoretical argument.
In the Kent market town of Sevenoaks, shopper Robert Ryan told the BBC that entering a PIN “does give me a bit of a prompt to make sure I’m not overspending on my tap-and-go”.
However, the reality for many people is that, under pressure from the cost of living, they are rarely spending more than £100 in one go anyway, so contactless has become the norm.
Research by Barclays suggests nearly 95% of all eligible in-store card transactions were contactless in 2024.
Terezai Takacs, who works in a florists in Sevenoaks, says that over the last couple of years people were cutting back on spending, such as asking for smaller bouquets.
Technology takeover
Ms Takacs also points out that the majority of customers now pay via the digital wallet on their smartphone.
Paying this way already has an unlimited payment limit, owing to the in-built extra security features such as thumbprints or face ID.
Dr Whittle says that is likely to dilute the impact of raising the contactless card limit on spontaneous, or reckless, spending – because young people, in particular, are paying by phone.
Some say scrapping the contactless card limit is overdue, because it is far less relevant when people are accustomed to PIN-free spending on a phone.
“Regulators are finally catching up with how people actually pay,” says Hannah Fitzsimons, chief executive at fintech company Cashflow.
“Digital wallets on smartphones face no limits, so why should cards be stuck in the past?”
If the contactless card limit were to increase or be scrapped, then it would push the UK further on than much of Europe, and more in line with rules in other advanced economies.
In Canada, the industry sets the level rather than regulators, and it is set by providers in the US and Singapore – a model which the Financial Conduct Authority (FCA) wants to replicate in the UK.
Banks agree with the regulator, although UK Finance – the industry trade body – says “any changes will be made thoughtfully with security at the core”.
Personal choice
Banks and card providers that do change limits will be encouraged to allow customers to set their own thresholds, or turn off contactless entirely on their cards.
Gabby Collins, payments director at Lloyds Banking Group – the UK’s biggest bank, says: “Lloyds, Halifax and Bank of Scotland customers can already set their own contactless payment limits in our apps – in £5 steps, up to £100 – and we’re absolutely committed to keeping that flexibility.”
That option has support among some BBC readers, viewers and listeners who contacted us on this topic through Your Voice, Your BBC News.
Ben, aged 36, from London, told us: “The most important principle here is personal choice. I would like to set my own personal limit.
“It is my card and my choice based on convenience and risk tolerance. Some banks do not allow for this. This option has to be provided to everyone.”
Others have concerns over security, saying that unlimited contactless cards would become more of a temptation to thieves and fraudsters.
‘Limitless abuse’
Charities warn that not everyone has the digital skills to set their own limits. In other circumstances, it can have an extremely serious impact on people’s lives.
Sam Smethers, chief executive of Surviving Economic Abuse, says unlimited contactless cards give controlling partners the opportunity for limitless economic abuse.
“Unlimited contactless spending could give abusers free access to drain a survivor’s bank account with no checks or alerts,” she says.
“This could leave a survivor without the money they need to flee and reach safety, while pushing them even further into debt.”
She warns that it could also hasten the shift towards a cashless society.
Cash is a lifeline to many survivors because it was the only way to escape abusers who can monitor online transactions, withhold bank cards and close down bank accounts, she says.
Additional reporting by Andree Massiah
New Delhi: Infosys has announced a massive Rs 18,000 crore share buyback, the largest in its history. This move aims to support the company’s stock performance amid weak growth in the IT sector. The announcement has sparked speculation that other tech giants, such as TCS, might follow with their own buybacks.
Expert Cautions on TCS Buyback Speculation
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that while Infosys’ buyback positively impacts the IT sector, it doesn’t guarantee that TCS will announce a buyback. Market expectations exist, but a TCS buyback is not certain.
CLSA Weighs in on TCS Buyback Prospects
Following Infosys’ announcement, brokerage CLSA suggested that TCS may consider a buyback, possibly a tender offer worth around Rs 20,000 crore, rather than a large dividend payout, possibly in Q3.
TCS Buyback History
TCS has completed five buybacks since 2017:
2017, 2018, and 2020: Rs 16,000 crore each (shares bought at Rs 2,850-3,000)
Post-COVID buybacks in 2022 (Rs 18,000 crore) and 2023 (Rs 17,000 crore)
In total, TCS has spent about Rs 83,000 crore on share buybacks so far.
Management’s Motive for Buybacks
Buybacks typically signal management confidence in the business fundamentals and help boost investor trust. Khemka remarked that while TCS has a strong history of buybacks and dividends, the company might announce a new buyback following Infosys’ lead, but this remains uncertain.
TCS Growth Outlook for FY26
TCS revenue is expected to slow down in FY26 compared to FY25. The company reported a 3.3 percent quarter-on-quarter revenue decline in Q1 and a year-on-year decline as well. North America and Europe, key markets for TCS, showed reduced revenue, though there was some sequential recovery due to currency factors. Challenges in discretionary spending and sector-specific impacts from new tariffs and geopolitical tensions have pressured revenues, especially in BFSI and energy sectors. Brokerages anticipate recovery only from FY27 onwards, factoring in margin pressures from new deals such as BSNL.
Strong Order Pipeline and AI Focus
Despite near-term revenue challenges, TCS started FY26 with a robust order pipeline worth USD 9.4 billion, up 13.2 percent year-on-year. The company highlights “Agentic AI” as a key theme in client interactions and expects international revenue in FY26 to surpass FY25 levels.
TCS Share Performance
TCS shares have gained nearly 3 percent in the past week, rebounding from a steep 9 percent decline over the last three months. However, the stock remains down 30 percent in the past year and 23 percent year-to-date in 2025, reflecting broader sector pressures.
UK interest rates are set to be held at 4% until 2026 as lingering concerns about the economy prompt policymakers to act cautiously, economists have said.
The Bank of England’s Monetary Policy Committee (MPC) will announce its latest decision on Thursday.
The central bank is widely expected to keep rates at 4% after cutting them from 4.25% in August.
Economists believe the MPC may avoid cutting rates at meetings in November and December, meaning the figure could be kept on hold until February.
This would be a setback for mortgage holders with millions still expected to refinance on to higher rates in the coming years.
Thomas Pugh, chief economist for auditing firm RSM UK, said: “It’s all but guaranteed that the Bank of England will hold interest rates at 4% at its meeting on Thursday.
“The committee will stick to its gradual and cautious guidance, as it continues to try to balance rising inflation with a weakening labour market.”
UK Consumer Prices Index (CPI) inflation rose to 3.8% in July, from 3.6% in June, meaning it remained at the highest level since January 2024.
This was largely driven by food and drink prices rising, while overall wage inflation has remained at 5%, according to the latest data from the Office for National Statistics.
Interest rates are used by the MPC to control inflation and bring it down to the 2% target.
The UK labour market has been stagnating with the unemployment rate remaining at a four-year high and job vacancies continuing to decline.
Philip Shaw, an economist for Investec, said he was expecting rates to be held at 4% until the end of the year, with the next cut in February.
He said recent economic data will be “unlikely to disperse the committee’s collective doubts over whether the inflationary coast is clear to resume easing” monetary policy by November.
Rob Wood and Elliott Jordan-Doak, economists for Pantheon Macroeconomics, said recent remarks from the Bank’s governor Andrew Bailey indicated he was happy with the financial markets pricing in only a 40% chance of another rate cut this year.
“The late Budget will likely also encourage the MPC to wait until December at least before considering another cut,” they said.
“We expect little change to the MPC’s guidance from August, given the hawkish dataflow and MPC members’ comments suggest little reason or desire to change their position from early August.”
In August, policymakers emphasised future rate cuts will need to be made “gradually and carefully” amid uncertainty about the economic outlook.
Chancellor Rachel Reeves is due to deliver her autumn Budget on November 26, and is widely expected to raise taxes to balance the books.
Business
Market Outlook: Fed Rate Decision, Trade Talks, FII Flows Likely To Drive Sensex, Nifty Next Week
New Delhi: The coming week is expected to be crucial for Indian stock markets as investors look ahead to key global and domestic developments. The US Federal Reserve’s policy meeting, progress on India’s trade deals with the US and the EU, and the trend of foreign institutional investors (FIIs) will likely set the tone for market movements.
Market experts believe that the US Fed may cut interest rates by 25 basis points in its upcoming meeting. A deeper cut of 50 basis points, however, would be a surprise and could boost sentiment in global markets, including India. (Also Read: Mcap Of 8 Most Valued Firms Jumps By Rs 1.69 Lakh Crore Amid Market Rally)
Updates on India’s trade negotiations will also be closely tracked. Last week, Commerce and Industry Minister Piyush Goyal said that discussions on an India-US trade deal are ongoing and that the first phase could be finalised by November.
He also noted that talks on the India-EU trade deal are at an advanced stage. FII activity will be another key driver for the markets. Out of the last five trading sessions, FIIs were net buyers in two, with inflows worth Rs 129.58 crore on Friday alone. This indicates that the FII trend is slowly turning positive.
The previous week was strong for Indian equities. The Nifty gained 373 points, or 1.51 per cent, to close at 25,114, while the Sensex climbed 1,193.94 points, or 1.48 per cent, to end at 81,904.70. Looking ahead, experts maintain a positive stance on equities. They suggest focusing on domestic cyclicals such as autos, metals, and consumer discretionary, while keeping a balance with defensives like select FMCG and pharma stocks. (Also Read: ITR Filing 2025: Has ITR Filing Deadline Extended? Here’s The Update)
On the technical front, analysts at Religare Broking said the Nifty has tested its previous swing high near 25,150. “While some consolidation cannot be ruled out, the outlook remains positive with the next upside target seen in the 25,250–25,500 range,” Ajit Mishra said.
“On the downside, immediate support lies at 24,800, with the 100-DEMA around 24,650 acting as a stronger cushion,” Mishra added. For Bank Nifty, the index is hovering near resistance at 55,000, where the 100-DEMA aligns with price hurdles.
“A breakout above this level could trigger short covering and open the way for 56,200, while support exists in the 54,000–54,400 zone and major support at the 200-DEMA near 53,600,” Mishra mentioned.
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Will TCS Follow Infosys’ Lead With Buyback? 5 Crucial Factors Every Investor Must Watch
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