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The number of people using cash fell by 16% last year as shoppers swapped notes and coins for contactless cards, according to UK Finance.
Nevertheless, cash was still used for 28% of all payments but that still put it way behind debit cards, which were used for 38% of transactions.
There was a 31% jump in the number of payments made using contactless, with one in five transactions now settled with a tap.
In 2008, 60% of payments were made in cash. UK Finance estimated that figure will fall to just 95 by 2028.
British start-up PiP iT has linked with the Post Office to give 1.6 million unbanked UK access to online shopping for the first time.
The Sheffield firm has built an online payment platform which helps customers spend cash digitally.
Shoppers receive a code from online stores and can then pop into one of the UK’s 11,500 Post Offices with the cash to complete their order.
PiP iT’s co-founder Ollie Walsh, said: “We’re targeting those people who have been denied the benefits of the online revolution."