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News: Debit cards - It's the way we pay

Just published figures for credit card use in 2004 from APACS, the UK payments association, reveal that more than 22 million adults in the UK made purchases online, accounting for 262 million transactions totalling £16 billion. And it's predicting that the rise is set to continue over the next decade - card payment volumes online expected to increase to 1.2 billion by 2014 with total spending of around £60 billion in real terms.

Although debit cards made up almost two thirds of all plastic card purchases, online this trend is reversed. In 2004, credit cards accounted for 72% of all online transactions, which meant that 11p in every £1 spent on credit cards was spent online - compared to just 3p in the £1 for debit cards.

Meanwhile, spending on plastic cards last year, at £273 billion, outstripped cash spending (of £272 billion) for the first time ever. And this trend is set to continue. The number of payment cards in issue reached a record 141 million.

The main driver in reaching this tipping point has been continued growth of debit card use, which hit record levels last year, accounting for almost two thirds (65%) of all purchases made on plastic. 2004 also saw the slowest growth in credit card use for more than a decade - with just 4% growth in the number of credit cards in issue and only 8% growth in spending.

The report also looks at possible futures for plastic cards. Chip and PIN could be used to make card payments online (and by phone) more secure - by using the PIN in a hand held reader. And growth of contactless payments already being pioneered by London Transport's Oyster Card look likely.

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