Shoppers are using less cash than ever as retailers invest in easier and more convenient ways to pay.

Along with online shopping, innovations including contactless payments have contributed to the increased use of debit cards, which accounted for 50% of retail sales by value in 2013.

Debit cards now account for 32% of the number of transactions, up from 30% last year.

However, cash remains the dominant method of payment, accounting for 53% of transactions, although this has declined by 3% over the last year and 10% over the last five years, according to The British Retail Consortium’s (BRC) Payments Survey 2013 .

Shoppers are still cautious when it comes to credit cards. Customers are spending the same amount in total but for fewer items, suggesting more considered purchasing, the report found. During 2013 the share in transaction volumes fell by 13% for credit cards to represent 9% of transactions. The average transaction value was up by 12%, reversing a three-year decline.

The survey found banks are “still levying unjustifiably high charges” on retailers handing card payments. The average cost to a retailer to process a credit or charge card payment is now 40.9 pence, up 18.3% in the last five years.

British Retail Consortium director general Helen Dickinson said: “Customers are taking advantages of new ways to shop and pay. The availability of contactless cards, handy express stores and self-service tills as well as online sales has increased the use of debit cards for smaller payments in place of cash. This is very much in line with the attention customers have paid to price and value during the recent economic uncertainty as they have sought to minimise payments from their budgets for everyday items.

“The recent pattern of spending on larger but fewer products on credit cards shows that customers are now feeling more confident than they did a year ago and reflects the wider consumer outlook of cautious growth.

“Cash use down 14% in the last five years is a milestone in the development of our digital economy. It shows that customers are embracing digital shopping whether online or on the high street and retailers are adapting and evolving to meet the demand with excellent services. However, it is important to note that cash still remains dominant in the overall number of transactions.

“It is really disappointing that the average cost of accepting both credit and debit cards have increased over five years, while cash costs have gone down. Interchange fees cost the retail industry and its customers almost £1 billion in 2013. The much-welcomed European proposals to cap how much banks can charge retailers to process card payments are close to final approval, but in the meantime, we continue to work with the UK Government and Payment System regulator to implement caps on UK fees without further delay, as has happened in other European countries”.