For the first time the value of retail purchases made by card now accounts for more than three quarters of all retail sales, according to the British Retail Consortium.

Its annual payments survey suggested this has partly been driven by UK customers increasingly using cards for lower value payments, traditionally dominated by cash. Cash fell again by more than 1 per cent, accounting for just 22 per cent of all retail sales.

As card payments have become more dominant, retailers have expressed concern at the rising costs of accepting cards. The survey revealed that retailers spent an additional £170 million to process card payments in 2017, reaching almost £1 billion for the year.

The research showed that increasing costs have been driven entirely by card scheme fees, which jumped by 39 per cent in 2017. The scheme fee increases to retailers in 2018 range between 30 and 100 per cent for some transactions.

Therefore, the BRC is calling for action from the government and the regulator to address the problem of soaring scheme fees borne by businesses, large and small, which come at a time when retailers are facing cost pressures elsewhere.

The trade body argued for regulation to simplify fees and charges levied in the card payments industry, along with an expansion to the scope of the Interchange Fee Regulation (IFR) to cover all card fees and charges.

Referring to the IFR, BRC head of payments and consumer credit Andrew Cregan, said that EU payment regulation introduced in 2015 delivered savings for the retail industry and consumers, but these benefits have now been eroded by increases in other card fees. “In fact many smaller retailers have questioned whether savings were ever passed on by card companies,” he added.

The survey - which sampled 48 per cent of the entire industry - also found that total UK retail sales rose by 4.3 per cent in 2017 to £366 billion, from £351 billion in 2016. The average transaction value of a retail purchase stood at £22.57 in 2017, up from £18.42 in 2016.

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