Card payments have overtaken cash for the first time ever, according to the latest figures from the British Retail Consortium.
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 cash payments dropped by 5% to 42%.
Overall £10.3 billion was spent on debit, credit or charge cards in 2016 – accounting for 54% of all retail payments.
The report from the trade association for UK retailers also showed a drop in the use of credit cards, suggesting customers are becoming less reliant on credit for smaller purchases.
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 payments and new payment applications online and in store."
He added that this has partly stemmed from the Interchange Fee Regulation, which was introduced across the European Union in December 2015 and capped the fees card firms charge retailers to process transactions.