Last year 59 per cent of the 37 billion transactions were done with cash, a sharp decline from the 73 per cent of transactions that were made with cash just 10 years ago. According to the Payments Council, a trade body representing the banks, card and cash machine industry, this proportion will fall to below 50 per cent by 2015, and to 45 per cent by 2018.

The figures have alarmed some campaigners, who gave warning that banks should not encourage the march towards a cashless society.

Because of this trend and the rise of debit cards and direct debit payments, cash has markedly fallen from favour, the report said.

"The trend is well entrenched and will continue. Paying for things is more secure and more convenient now we don’t have to keep replenishing the stock of paper and metal we drag around. By 2018, the amount of cash we use will fall by 20 per cent after adjusting for inflation, even though our total spending will rise by perhaps 15 per cent in real terms," the report said.

"I am concerned that there is a huge head of steam building behind the card issuers to push out cash. But that is not in the interest of the general public."

"These people are being left behind in a society where cash is no longer king,” he said