Cash is still king but its crown is slipping, figures from a trade association show.
The number of cash payments fell by 11% between 2015 and 2016, according to UK Finance.
But cash remains the most frequently-used payment method in the UK, it said, with consumers and businesses still making 15.4 billion cash payments in 2016.
Cash represented 44% of all payments made by consumers in 2016 and less than 4% of the volume of payments made by businesses.
2016 was the second year during which consumers used cash for less than half of payments, while the number of cash payments made for less than £1 has halved during the past decade, UK Finance said.
Debit cards were the second most frequently-used payment method, with 11.6 billion payments recorded.
The average value of a cash payment has increased over the last 10 years from £11.58 in 2006 to £15.80 in 2016.
UK Finance said this is due to both inflation and changing consumer preferences.
Contactless “tap and go” card payments have become an increasingly popular alternative to cash when people are paying for low-value items.
Some 2.9 million people rarely used cash in 2016, representing 6% of the UK’s adult population, UK Finance said.
People in younger age groups are more likely to be rare cash users, with more than one in 10 of those aged 25 to 34 making one cash payment each month or no cash payments at all.