Up to three million of Britain’s small businesses still do not accept plastic cards despite research that shows 17% of shoppers never use cash and 38% prefer to use cards.

The research, carried out among 2,044 consumers and 1,202 small business owners for electronic payments technology company Square, found 60% would shop more at small businesses in their local area if they could pay by card.

Some 27% of shoppers had not bought something because they could not pay with a card yet 44% of small business owners thought they did not miss out on sales if they did not accept cards.

Square found that while cash is not completely dead, it is taking a less central role in people’s lives – nearly one in three of us, or 30%, have not taken out cash from an ATM or bank in the past week.

One in five (19%) is less likely to use a business where card is not accepted, while more than one in four (26%) feels that businesses that do not take cards are old-fashioned, according to the survey.

Sarah Harvey, UK lead for Square, said: “Small businesses are competing with larger competitors that have greater resources, so they need to make use of every advantage they can get.

“That means making it as easy as possible for their customers to buy from them, including accepting card payments alongside more traditional methods like cash.”