Britain moves one step closer to becoming a 'cashless society'

Experts say it is another move towards a world where plastic cards are "king", turning cash into a relic from the past.

The new system will allow people to pay for transactions of £10 or less without handing over a penny at the till.

Insrtead, their debit and credit cards will be upgraded to allow them to pay by simply swiping their card on a new machine which will automatically debit the amount of the transaction.

It should cut queues at the tills because people will not even need to enter their PIN number or sign anything.

Rather than wait for their change, people will be able to buy anything from a newspaper to a chocolate bar with a quick swipe of their card. A trial will begin in London in September, but will eventually be rolled out across the whole country next year.

Jose San Juan, managing director of Visa UK, said: "By the autumn, the first UK cardholders will be buying a coffee or a sandwich in a split second."

To prevent fraud, people will have to enter their PIN number from "time to time" to prove that it is their own card.

More than 20 billion cash payments for less than £10 are made every year in Britain, according to the Association for Payment Clearing Services.

In future, more and more people are likely to stop using cash and simply swipe their upgraded debit or credit cards for many of these transactions.

Cash is still the principal way of paying for about two-thirds of all payments in this country, if they are measured by volume, not amount.

But plastic cards are gradually taking over from cash and cheques.

A growing number of retailers, such as Boots, WH Smith and Next, have already stopped accepting cheques.

In the UK, there are now about 70 million credit cards and 67 million debit cards, with most people carrying several in their wallet.

Every second, it is estimated that there are about 64 credit card transactions for an average of £60.67 each.

For many people, smaller purchases are still made in cash, but this could change with the launch of the new "contactless" cards.

Firms such as Barclaycard, HSBC, Lloyds TSB and the Royal Bank of Scotland have all signed up to the new scheme.

The initial roll-out will involve Visa and MasterCards, and customers will be automatically sent upgraded cards.

The success of the new scheme will depend on retailers from newsagents to high-street giants signing up to use the new technology.