Cash is still king for the UK’s shoppers but relatively new payment methods such as Pay Pal are “rapidly gaining ground”, a report found today.

More than half (54 per cent) of transactions were made using cash last year, according to a survey of nearly 10 billion payments in shops, including big chains, smaller independent shops and online retailers, by the British Retail Consortium (BRC).

However, the use of “alternative” payment methods has more than doubled on the previous year, driven by manufacturers’ money-off coupons and the rapid growth of newer payment methods such as PayPal and online payments, the BRC said. These now account for five per cent of transactions.

The BRC expects to see further growth in non-card payments such as those using mobile phones.

The survey found that credit and charge card use dropped to 11 per cent of the number of transactions, while debit cards increased their share to 30 per cent.

It also said that 40 per cent of manned tills are now able to accept “tap and go” contactless card payments.

A number of retailers said they are planning to roll this out over the coming year, which would mean that over half of tills will have the capability for contactless payments to be made.

Helen Dickinson, director general of the BRC, said: “New ways to pay and new ways to shop are shaping the retail landscape like never before.

“Changing customer preferences are driving the increase in debit card use - they’re helping people to manage their money better and are a natural fit for online shopping and self-service checkouts.

“Cash is still the most popular way to pay, but our survey shows how rapidly alternative and emerging methods are gaining ground, with growth more than doubling on the previous year, albeit from a low base.”