One of the UK's biggest providers of e-commerce web shops has teamed up with a company pioneering an offline payment system in a bid to tackle online fraud.

Internet Retailer has partnered with PayOffline to eliminate the risk of fraud and enable internet merchants to accept orders from customers who prefer to pay in their local high street.

Supported by the Alliance and Leicester, PayOffline is a payment platform enabling customers to buy goods and services online without credit cards and pay by cash or debit card offline at any high street Payzone outlet.

David Geran, chief executive at Internet Retailer, said: "Gaining customer confidence and trust are paramount to achieving online success.

"By enabling our shop keepers to offer PayOffline to their customers, they can offer peace of mind and security as well as extend the reach of their e-commerce web shops to a whole new market of cautious internet users."

Online shopping hit record levels in July 2007 as sales soared to £4.2bn from £2.34bn in July 2006, according to the Interactive Media in Retail Group.

However, a report by the Office of Fair Trading suggested that 79 per cent of web users are still 'very concerned' about the security of their payment details when shopping online.

An estimated 3.4 million internet users avoid e-commerce websites and are willing to miss out on potential savings because of "a lack of trust or fears about personal security".

Over 15 million homes in the UK, some 61 per cent, now have an internet connection, and 53 per cent of internet users surveyed by National Statistics Online have bought goods online.