Cards have overtaken cash to become the UK’s top payment method for the first time.

Cards accounted for more than 50% of all retail transactions by volume last year, the British Retail Consortium’s (BRC) annual payment survey revealed.

The study, which covered online and in-store payments, revealed that there were 19 billion transactions overall in 2016 – up from 18.2 billion the previous year. The average transactional value was £18.42, compared with £18.63 in 2015.

The rise of cards has been driven by shoppers increasingly using them for lower value payments and investment by retailers in payment technology.

Investment in payments has been boosted by savings of around £500m for retailers and their customers from the EU Interchange Fee Regulation (IFR), which caps some of the fees for handling card transactions.

Retailers still spent more than £1bn last year in order to accept payments and the cost of processing cards, particularly credit cards, remains high, said the BRC.

The BRC’s payments and consumer credit policy advisor Andrew Cregan said: “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.”