Consumers spend £16bn online

More than 22 million people spent a total of £16bn buying goods online last year, according to industry research.

A study from the UK payments association, Apacs, found that 262 million transactions were made online last year, most of which were carried out with credit cards.

A spokeswoman for Apacs, said: "[C]redit cards are far more popular for online payment than debit cards - a direct reversal of card use in other retail environments.

"We believe the unique consumer protection afforded by credit cards - such as additional cover for lost or damaged goods - is a key driver in this pattern. Using a separate credit card for online shopping allows you to check your statements and spot any potential fraudulent use more easily."

In 2004, credit cards accounted for almost three-quarters (72 per cent) of all online transactions, which means that £0.11 in every £1 spent with credit cards was spent online, Apacs said. Debit cards took a lower share, with just £0.03 for every £1, although they accounted for almost two-thirds (65 per cent) of all plastic card purchases on and offline.

Apacs said the rise in online retail is likely to continue over the next decade - by 2014 card payment volumes online could rise to 1.2 billion with total spending of around £60bn.

Apacs said that in the future, consumers could be given a hand-held PIN reader to secure internet and phone payments.