Card payments have overtaken cash for the first time ever, according to the latest figures from the BRC.
The British Retail Consortium's (BRC's) annual Payments Survey shows more than half of all retail transactions were paid for by card rather than cash in 2016.
Almost 43% of retail transactions were paid for by debit card last year, while the use of credit cards and cash payments dropped.
Overall £10.3 billion was spent on debit, credit or charge cards in 2016 – accounting for 54% of all retail payments.
The BRC attributed the growth of debit card use to the rise of the contactless function, particularly since the limit was increased to £30 per transaction at the end of 2015.
Andrew Cregan, BRC policy adviser for payments and consumer credit, said: "A growing number of retailers have invested in payment technology to accept cards, contactless
"In part, this has been facilitated by the Interchange Fee Regulation (IFR), which was introduced across the European Union following a successful campaign by the BRC and has led to a significant fall in the cost of collection that benefits retailers and their customers.
“Looking ahead, the Government should act to retain the benefits of the IFR for retailers and their customers after the UK leaves the EU and introduce further regulatory action to address the alarming increase in other card fees and charges at a time when the retail industry is facing acute cost pressures elsewhere.”