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Shoppers are using cash to buy their goods less often than ever before, according to a survey by the British Retail Consortium (BRC).

Online sales and contactless cards are behind the 14% fall in cash use over the past five years, while debit card use has increased by 11%, the BRC said.

The BRC said the survey also showed banks are still levying "unjustifiably" high charges for using cards.

However, the UK Cards Association said the charges were still good value.

Cashing out

Cash accounted for 53% of the number of transactions in 2013, with debit cards accounting for 32%, the BRC said.

In terms of the value of transactions, however, cards accounted for 50% of transactions.

The average transaction value of purchases made with cards has fallen, the survey found.

"Customers are taking advantage of new ways to shop and pay," said Helen Dickinson, director general of the BRC.

"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.

"Cash use down 14% in the last five years is a milestone in the development of our digital economy".

Interchange fees

The BRC said the average costs to a retailer of processing a credit or charge card payment had increased by 18%, to 41 pence, in the past five years.

Debit card payments, on average, cost 8.8p to process, up 4% over the same period.

"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," said Ms Dickinson.

However the UK Cards Association, which administers card payments, said retailers needed to make a fair contribution to the costs of processing the transactions.

By paying the "interchange fees", as they are known, it said retailers benefit from protection against fraud.

It also argues that if retailers do not pay the charges in full, then consumers would have to pay more to use the cards.

"A reduced income from retailers would mean that the substantial costs of providing cards, and the systems which enable customers to pay for things safely and speedily, would have to be funded in other ways," said a spokesman for the UK Cards Association.

The average fee paid by the retailer on a credit card is 0.9% of the transaction, and for debit cards it is 0.2%.

The European Union is close to approving a plan to cap how much banks can charge retailers to process card payments.

However the proposed cap would only affect cross-border purchases, not transactions within a member state.