In its 'The Way We Pay 2010' report, the Council notes that cash, on the face of it, still appears incredibly popular, accounting for six in 10 transactions but this is down from nearly three quarters 10 years ago. What's more, of the 21 billion consumer cash payments made in 2009, 80% were for less than £10.

In just five years, cash transactions are expected to represent less than half the total for the very first time. The value of cash used is dwindling even faster compared to wealth and spending, rising only seven per cent in the last ten years, while overall consumer spending has doubled.

The Council says that without the migration to other payment methods, most notably debit cards, Brits would need an extra £102 billion in cash each year to meet spending needs today compared to ten years ago, or £40 a week for every adult.

The trend will only accelerate over the next 10 years and by 2018 the amount of cash used in the UK will fall by 20% after adjusting for inflation, even though total spending will rise by around 15% in real terms, predicts the report.

Technology and cultural changes are driving the move, with debit cards and contactless technology taking over from cash, particularly among younger generations.

Debit card usage has risen fourfold in ten years - to £264 billion in 2009 - four times as fast as overall spending, and will double again by 2018. Each adult now uses a debit card 158 times per year, almost every other day, up from a little more than once a week in 1999 and by 2018, one in four of all transactions will be on a debit card, up from just one in twenty ten years ago.

Whilst debit cards have "cannibalised" larger credit card and cheque transactions they are also taking over from cash for lower value payments and this will continue with the rise of contactless payments.

Mike Bowman, head, policy and markets, Payments Council, says: "Contactless payment for small purchases has the potential to drive debit card usage even higher. With 18 billion cash transactions less than £15, there's a huge opportunity for us to replace billions of these with a quick swipe past a card reader."

The Council cites the way Brits pay in pubs and clubs as an example of this shift in technology and culture. In 1999, nine out of ten pints were bought with cash. Now only 40% of pub spending involves notes and coins and pub goers are much more likely to be eating out as well as drinking. By 2018, the report predicts cash spending in pubs will fall to just 25%.

Bowman says: "Although cash won't disappear in our lifetime, the continuing payments revolution will make it an ever smaller part of our spending. Even the traditional sight of people waving tenners at the bar is fast vanishing. They're more likely to brandish their debit cards now as they compete to get served."

Not only are Brits less likely to pay in cash now, they are also no longer being paid in cash. In 1999 one in eight received their wages in cash. This was down to one in 20 by 2009 and is predicted to fall to one in 50 by 2018.

"More and more people have opened bank accounts in the last ten years, and fewer and fewer have jobs in manufacturing where a weekly wage packet is more common. As a result far fewer of us get wages cash-in-hand," says Bowman.

Brits have therefore turned to ATMs to access their cash. There are 63,000 holes in the wall in the UK today, two-and-a-half times more than ten years ago. In 1999 62% of cash withdrawn from accounts came from an ATM - by 2009 it was 85%.

This does not mean society is "wedded to cash" though, just that people are accessing it through machines, not through pay-packets or bank branches.

Meanwhile, cheques are continuing their slow death says the council, accounting for just two per cent of personal transactions in 2009 as increasing numbers of retailers stop accepting them. The group says that even if it does not embark on its controversial policy to officially phase them out, volumes will more than halve to just 248 million in 2018, making up just 0.8% of all the personal payments.

The council concedes they remain popular for person-to-person payments - accounting for a third in value - but claims the advent of online banking, and especially faster payments is accelerating the decline.

Around 22 million UK adults now operate their accounts online, while the report predicts that Faster Payments will see rapid growth, accounting for £836 million by 2018, up from £294 million in 2009.

Looking further ahead, the Council speculates that cash could be all but dead within 40 years and argues this would be a good thing.

"By 2050, using cash could well be a minority activity, much more the preserve of informal transactions. With around a billion bank notes created, distributed, collected and destroyed every year, the production and secure transportation of notes is an expensive and environmentally costly business paid for by the tax payer. A progressive move away from cash could hold many benefits," says the report.

Read the report here: