Australian Small Business Guide to Online Payments

If you are running a small business in Australia, accepting online payments is no longer optional. Whether you sell products through an online store, send invoices for services, or take bookings that require a deposit, customers expect the convenience of paying online.

But with so many payment options available, choosing the right solution can be confusing. This guide breaks down the main online payment methods available to Australian businesses, their costs, and which ones suit different business types.

Why Accept Online Payments?

Customer expectation. Australian consumers increasingly prefer to pay digitally. Cash payments have been declining, and the shift to digital was accelerated by the pandemic. Customers want to pay by card, through a website, or via digital wallets.

Faster payments. Online payments settle quickly, often within one to two business days. Compare that to waiting for cheques to clear or chasing up invoices.

Reduced admin. Automated payment processing means less time spent on manual bookkeeping, reconciliation, and chasing payments.

Wider reach. Accepting online payments lets you sell to customers across Australia (or the world), not just those who walk through your door.

Payment Options for Australian Businesses

1. Payment Gateways (For Websites)

A payment gateway processes card payments on your website. When a customer enters their card details on your site, the gateway securely handles the transaction.

Stripe

  • Transaction fee: 1.75% plus $0.30 AUD per domestic card transaction
  • International cards: 2.9% plus $0.30 AUD
  • No monthly fee
  • Easy integration with most website platforms
  • Supports Apple Pay and Google Pay
  • Excellent developer tools and documentation
  • Best for: Most small businesses wanting a straightforward, modern payment solution

Square Online

  • Transaction fee: 1.6% per tap or insert transaction (in-person), 2.2% for online transactions
  • No monthly fee
  • Includes a free point-of-sale app for in-person payments
  • Offers a free basic online store
  • Best for: Businesses that need both in-person and online payment processing

PayPal

  • Transaction fee: 2.6% plus $0.30 AUD for domestic transactions
  • No monthly fee for standard accounts
  • Widely recognised and trusted by consumers
  • Offers buyer protection, which gives customers confidence
  • Can be used as a standalone payment option or alongside a payment gateway
  • Best for: Businesses wanting a recognisable payment option that some customers prefer

eWAY

  • Transaction fee: 1.5% plus $0.20 AUD (rates vary by plan)
  • Monthly fee: From $49 AUD on some plans
  • Australian-owned and operated
  • Good integration with Australian accounting software
  • Local customer support
  • Best for: Businesses wanting an Australian-based payment provider with local support

2. Buy Now, Pay Later (BNPL)

Buy Now, Pay Later services let customers split their purchases into instalments, while you receive the full payment upfront (minus a merchant fee).

Payment Options for Australian Businesses Infographic

Afterpay

  • Merchant fee: Approximately 4 to 6% plus $0.30 per transaction
  • No monthly fee
  • Very popular with Australian consumers, especially for retail purchases
  • Integrates with Shopify, WooCommerce, and other platforms
  • Best for: Retail and e-commerce businesses selling products in the $50 to $2,000 range

Zip Pay / Zip Money

  • Merchant fee: Varies by agreement
  • Zip Pay: For purchases up to $1,000
  • Zip Money: For larger purchases up to $50,000
  • Best for: Businesses with higher-value products or services

BNPL services can increase average order value and conversion rates, but the merchant fees are higher than standard payment processing. Consider whether the increased sales justify the additional cost.

3. Invoice Payments

For service businesses that bill by invoice, online payment options include:

Accounting software integration

  • Xero, MYOB, and QuickBooks all offer online payment options that can be added to invoices
  • Customers click a “Pay Now” button on the invoice to pay by card or bank transfer
  • Fees vary but typically around 1.5 to 2.9% per card transaction
  • Best for: Service businesses already using Australian accounting software

PayPal invoicing

  • Send invoices through PayPal with a built-in payment link
  • Customers can pay by card or PayPal balance
  • Standard PayPal transaction fees apply
  • Best for: Freelancers and service providers who want a simple invoicing solution

Direct bank transfer (EFT)

  • No transaction fees
  • Include your bank details on invoices for customers to transfer directly
  • Slower than card payments and requires manual reconciliation
  • Best for: Businesses where customers are comfortable with bank transfers and you want to avoid fees entirely

4. Digital Wallets

Digital wallets like Apple Pay and Google Pay allow customers to pay using their phone or smartwatch. These are increasingly popular, especially for in-person and mobile website transactions.

Most payment gateways (Stripe, Square) support Apple Pay and Google Pay automatically. Enabling them gives customers a faster checkout experience with no need to enter card details manually.

5. Direct Debit

For businesses with recurring payments (memberships, subscriptions, regular services), direct debit pulls payments from the customer’s bank account on a scheduled basis.

GoCardless is a popular direct debit provider in Australia with fees of 1% plus $0.30 per transaction (capped at $3). It integrates with Xero, Stripe, and other platforms.

Direct debit is best for businesses with ongoing customer relationships and regular payment schedules.

Choosing the Right Payment Solution

For Online Stores

If you sell products through a website:

  • Use a payment gateway like Stripe or Square for card payments
  • Add PayPal as an alternative for customers who prefer it
  • Consider Afterpay if your target market uses BNPL services
  • Enable Apple Pay and Google Pay for a faster checkout

For Service Businesses

If you invoice for services:

  • Use your accounting software’s (Xero, MYOB) built-in payment feature to add pay buttons to invoices
  • Offer bank transfer as a fee-free option for larger invoices
  • Consider GoCardless for clients on regular payment plans

For In-Person Businesses

If you operate a physical location:

  • Square offers a combined in-person and online payment solution
  • Most EFTPOS providers now offer online payment add-ons
  • Consider a solution that handles both in-store and online transactions to simplify reporting

For Booking-Based Businesses

If you take appointments or bookings:

  • Many booking platforms (like Timely, Square Appointments, or Fresha) include integrated payment processing
  • Take deposits or full payments at the time of booking to reduce no-shows

Security Considerations

PCI Compliance

If you process card payments, you need to comply with the Payment Card Industry Data Security Standard (PCI DSS). Using a reputable payment gateway like Stripe, Square, or PayPal means they handle the heavy lifting of PCI compliance for you.

Never store customer card details on your own servers or in spreadsheets. Always use a secure payment gateway.

SSL Certificate

Your website must have an SSL certificate (HTTPS) if you accept online payments. This encrypts data between your website and the customer’s browser. Most hosting providers include a free SSL certificate.

Fraud Prevention

Payment gateways include fraud detection tools, but you should also:

  • Monitor transactions for unusual activity
  • Set up alerts for large or suspicious transactions
  • Use address verification and CVV checks
  • Keep your website and plugins updated

Tax Considerations

Online payments are treated the same as any other income for tax purposes. Make sure:

  • All online payments are recorded in your accounting system
  • GST is calculated correctly on transactions
  • Payment processing fees are recorded as a business expense
  • Transaction records are kept for at least five years as required by the ATO

If you use Xero or MYOB and integrate your payment gateway, most of this happens automatically.

Getting Started

If you are not currently accepting online payments, here is how to get started:

  1. Determine which payment methods your customers prefer
  2. Choose a payment solution that fits your business type and budget
  3. Set up the payment gateway and integrate it with your website or invoicing system
  4. Test the payment process thoroughly before going live
  5. Communicate the new payment options to your customers

If you need help adding online payment functionality to your website, Cosmo Web Tech can help. We set up secure, user-friendly payment solutions for businesses across Western Sydney. Contact us to discuss your requirements.

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Cosmos Web Tech is the web development division of Ganda Tech Services, specialising in website design, SEO, and e-commerce for Australian businesses.