Consumers still prefer to buy things with cash rather than debit or credit cards, according to figures released by the British Retail Consortium (BRC).

The organisation gathered data from 10,000 stores in the UK and found that cash payments accounted for more than half of all transactions last year, and 32% - or £27bn - in sales turnover.

And the preference for money transactions over plastic ones comes despite the fact banks are trying to encourage consumers to use their cards more.

The trade association said it has been angered by recent marketing blitzes - such as the "Cash is Dead" campaign from debit card Maestro - which encourage card spending, as retailers bear the costs of the higher processing fees levied by banks.

While cash purchases account for 54% of all transactions in the BRC survey, this share has fallen from 86% in 1996, according to figures from UK payments association Apacs.

BRC director general Kevin Hawkins said: "Retailers are not opposed in principle to cards taking a bigger share of the payments market but, as they try to accelerate that process, the banks should acknowledge their card charges are too high."

The BRC said that cash purchases are much less expensive for retailers. On average a £20 transaction costs a retailer less than 4p, compared with 17p for a credit card purchase.

The cost of processing credit card payments accounts for 51% of the £317m in charges among firms responding to the survey, despite accounting for 22% of sales turnover and 12% of transactions.

Mr Hawkins added: "There should be a lower, fixed fee per transaction which actually reflects the costs of processing. Cash still dominates and will continue to do so while the high costs of the alternatives put retailers off adopting them."

The firm's survey shows that average collection costs for all payment types accounted for nearly 0.4% of sales turnover, with more than three quarters of costs taken up by service charges.

A Maestro spokesman was unavailable for comment.

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