Cash is now being used for less than half of all retail transactions, new figures show.
Debit cards are now increasingly being used even for lower value payments, the British Retail Consortium (BRC) said.
The change was partly the result of contactless technology.
Figures for 2015 showed cash was used in just over 47% of all retail transactions, down from 52% the previous year.
It was the biggest percentage point drop for five years and means almost 20% fewer transactions are made with cash than in 2011, the BRC said.
Its report looked at the methods of payments UK shoppers are using when buying goods in store and online.
Figures last year from the Payments Council have already shown that, overall, cash had been overtaken by card and online transactions measured by value.
The latest data looks at the number of retail transactions.
Tom Ironside, BRC director of business and regulation, said: "Though the use of cash has been in decline for some time now, this year it has seen a significant dip.
"Crucially, retailers are seeing cash used in under half of all transactions for the first time, marking a real watershed in the payments landscape.
"However, cash remains an important payment method for many customers and will be with us for years to come.
"It seems that more and more of us are turning to our debit cards to make payments especially as new contactless technology is proving incredibly popular for those lower value transactions that used to be the mainstay for cash."
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