54% of all retail sector payments are now made on card
Card purchases now account for more than half of retail purchases made in the UK for the first time, according to the British Retail Consortium (BRC).
The body said card usage has grown, with debit cards overtaking cash for the first time, as more retailers invest in payments technology to accept cards and 'tap and go' contactless payments.
Many also now accept new payments methods which allow people to use their mobile phone like a wallet, such as Apple Pay, Android Pay and Samsung Pay.
There were 10.3 billion retail transactions made on a debit, credit or charge card in 2016, accounting for 54% of all retail payments.
This five percentage point increase in the share of cards compared with 2015 means that cards now account for more than half of retail transactions for the first time, the BRC said.
The ongoing decrease in the average value of card purchases - from £30.53 in 2013 to £25.40 in 2016 - shows cards are increasingly used for lower-value transactions, partly driven by the wider use of contactless payments, the report said.
In autumn 2015 the transaction limit for a single contactless payment was increased from £20 to £30.
The results from the BRC payment survey conducted for 2016 were based on retailers accounting for nearly half of UK retail annual sales turnover, which in 2016 was £351bn.
The report said: "It is the first time that cash has ceased to be the largest payment category, with the share of debit card transactions growing by 4.5% to almost 43% of all retail transactions, overtaking cash transactions, which saw a 5% shrinkage in its share of retail purchases to account for 42%."
BRC also said there were signs of people becoming less reliant on their credit cards.