Mega Monday at the start of December signalled the beginning of “a very strong month” for e-commerce.
But the online consumer spending increase was contrasted by a year-on-year drop of 1.9% on the high street.
Visa Europesaid consumer confidence has also remained high, adding to evidence that consumer spending will continue to strengthen in 2014.
Treasury spokesman for the Liberal Democrats, Ian Swales MP said:
"These figures show a considerable increase in spending on hotels, restaurants and household goods which is an encouraging sign that confidence is returning to the consumer market. I am sure this will bring a welcome boost to small and medium sized business in my Redcar Constituency and across the UK."
"It is fantastic to see that the economic recovery is being felt on our high streets and that Liberal Democrat policies in government are getting the economy moving again."
Visa Europe’s UK Expenditure Index takes card spending data and adjusts it for a variety of factors to create a like-for-like comparison of consumer spending, providing a robust indicator of consumer spending habits.
Online demand may have been boosted by bad weather in the run up to Christmas Day.
Jeremy Nicholds, Director of Commercial Development at Visa Europe said:
“It was a tale of two Christmases in December as online and high street retailers looked to woo customers in the final weeks of the year.
"Overall, consumer spending in December registered a 0.6% annual increase, with much of this rise attributed to online spending with the high street faring less well.
“By the end of the month, the performance of the high street had improved considerably. In the final week of the month, consumers returned to the high street to take advantage of price reductions in the sales, helping to close the year on a high. Spending at the tills increased by 11%."
Nicholds said consumers were shopping online much closer to Christmas than in previous years, which shows they continue to gain in confidence regarding the receipt of goods ordered online as well as taking advantage of services such as click and collect.
Consumer spending rose by 0.6% on an annual basis in December, with growth having eased from November’s five-month high (1.5%). Household spending also increased on the three-month-on-three-month measure in December. That said, the rate of increase was only slight (0.1%), and slower than that registered in November (1.1%).
The UK Expenditure Index has reflected a number of trends seen in other recent economic data, including the further expansion of GDP in Q3.
Although these factors point to a further expansion of GDP in Q4, the sustained squeeze of real wage growth continues to cloud the outlook.
However, constraint on expenditure is starting to ease and will continue to do so in 2014 as unemployment is expected to fall, interest rates remain exceptionally low and the economy expands at a solid pace.
The Visa UK Expenditure Index uses card transaction data to provide a robust indicator of total consumer expenditure across all payment methods and is used by a range of stakeholders to gain insights into consumer spending, including HM Treasury.
It is based on spending on all Visa debit, credit and prepaid cards which are used to make an average of over 1.9 billion transactions every quarter and account for £1 in £3 of all UK spending.
Swales, MP for Redcar, added:
"These figures coincide with the publication of the North East’s Chamber of Commerce (NECC) Quarterly Economic Survey showing sustained growth in all key indicator areas including employment, sales and manufacturing. I am committed to doing everything possible to support local industry; restore the right balance in our local economy and get Britain manufacturing again."