The A to Z of payment methods in Australia
This buy now pay later (BNPL) platform lets customers make a purchase and pay it off in 4 interest-free instalments over 6 weeks. Afterpay pays retailers the full amount of the customer’s purchase up front, then collects the balance from the customer.
Afterpay customers have a higher average order value than customers who pay up front.
Afterpay assumes the risks associated with collecting payments.
Customers can use Afterpay for digital and in-person purchases.
Merchants pay a commission of 3%-7% for every transaction.
Apple Pay is a digital wallet that Apple pre-installs on every iOS device. Users don’t need to download an app — they can begin using it as soon as they link their payment card to Apple Pay.
Digital wallet security protects customer data.
More than 50% of smartphone owners in Australia have iPhones.
There are no additional merchant fees for Apple Pay — standard debit and credit card fees apply.
Bank Australia Tap & Pay
This digital wallet is for Bank Australia customers, who can use it for purchases of up to $100.
This app works only with Android 5.0 phones and newer that have near-field communication (NFC) capabilities.
Businesses need a Visa PayWave terminal to accept payments.
Australia has the highest rate of cryptocurrency adoption in the world, although bitcoin isn’t a popular payment method for everyday purchases.
Many businesses don’t accept bitcoin.
Users may be able to buy prepaid debit cards with bitcoin, which makes it easier to spend on everyday items.
Australia is developing regulations for bitcoin, which may not be complete until 2024 or 2025.
BPAY is a popular electronic bill payment service that users can access from within their online banking portal. Any business that has a BPAY Biller Code can accept BPAY payments.
Businesses can add Intelligent Customer Reference Numbers (iCRN) to bills that require customers to pay the exact amount listed on the bill.
You can set up BPAY batch payments to pay multiple bills with a single transaction.
Cash currently only accounts for 6% of the value of all transactions in Australia. Still, while cash is losing traction as a payment method, it may be useful for certain transactions. For example, customers that don’t have smartphones or digital payment technologies may prefer to pay with cash.
Cash provides payment options to everyone, including those who may not have access to digital payment options
Cheques account for just 0.2 % of non-cash retail payments in Australia, and the government announced in 2023 that it'll phase-out cheques by 2030.
Many businesses no longer accept cheque payments.
Cheque usage has declined by 90% in Australia over the past 10 years.
CommBank Tap & Pay
This app lets users pay with a Debit Mastercard or CommBank credit card from their mobile wallet. The app also tracks monthly income, spending and savings.
You don’t need to use a PIN for purchases under $100.
This app is for Android devices only.
Contactless describes a type of payment that doesn’t require the payer to touch a payment terminal. This is possible when a point-of-sale terminal and the payment device both have near-field communication (NFC) capabilities.
Each transaction generates a unique payment ID.
NFC payments don’t expose a user’s personal bank account information.
NFC cards are also called “chip” cards.
Credit and debit card
Credit and debit cards may have both a chip and a magnetic strip for “swipe” payments. The magnetic strip contains static, encoded account information, which is why swipe payments are less secure than contactless payments.
Mastercard is phasing out magnetic strips by 2033.
Credit card companies charge interest for purchases and may also charge annual fees.
Direct deposit and debit
Direct debit lets B2B and B2C customers set up “autopay,” so they never have to worry about forgetting to make a payment.
Direct deposit simplifies payment management, including payroll.
Direct debit ensures timely payments.
Fitbit and Garmin Pay
These two mobile wallet payment apps let users make payments from their wearable Fitbit devices and Garmin watches. With Fitbit Pay, users can also pay for certain transportation services, like Sydney ferries, trains and light rail.
These devices are ultra-convenient for cyclists, runners and other people who might not want to carry a smartphone at all times.
Gift cards and certificates may be specific to a merchant, or for broad use (like an Amazon gift card). When businesses sell gift cards, they earn money in advance of providing a service or product.
Gift cards track purchases, which can be useful for marketing purposes.
Businesses must follow Australian consumer protection law when issuing gift cards.
This mobile wallet app is available for Android users, and it does more than just store your payment information. You can also store retail loyalty cards, official identification and proof of COVID vaccinations.
You can store transit passes in Google Wallet and get updates if itineraries change.
Google Wallet can digitally store concert tickets with QR codes.
Klarna is a buy now, pay later app that lets users purchase items in 4 equal payments over 6 weeks, with the first payment due at the time of purchase. It works at any business that accepts Visa, and with any brands that accept Klarna.
Business users can take advantage of Klarna’s integrated marketing tools.
The app integrates with 6 popular ecommerce platforms.
Klarna charges merchants a fee on every transaction.
Mastercard Click to Pay
This online-only payment app lets users pay merchants without entering a login and password, simplifying the checkout process and potentially reducing cart abandonment.
Users can add their Mastercard credit, debit or prepaid cards to the app.
Users must enrol through their bank.
A Money Order is a product sold by Australia Post. Users can purchase a Standard Money Order at any post office and mail it to a recipient, or an Express Money Order for one-hour post office-to-post office delivery.
Purchasers must use cash or debit card/direct debit — Australia Post doesn’t accept cheque or credit card payments for Money Orders.
The fee for Money Orders of up to $5,000 is $13; it’s $25 for Money Orders of up to $10,000.
Purchasers must present government-issued identification for Money Orders of $1,000 or more.
NAB Now Pay Later
This buy now pay later payment app from National Australia Bank is for NAB customers with a transaction account. Users can make purchases of up to $1,000, payable in 4 equal fortnightly instalments, with no interest.
Users can make early payments with no penalty.
The smartphone app is compatible with Android and iOS devices.
Osko is a BPAY product that’s accessible from many online banking portals (usually in the “Pay Anyone” section). While BPAY is primarily for paying bills, Osko allows peer-to-peer payments.
Osko transfers funds in under a minute.
Users can add up to 280 characters to describe payments.
PayPal is a peer-to-peer payment app that lets users transfer money to other PayPal users and merchants. Businesses that use the PayPal payment platform can accept PayPal purchases online, in person or over the phone.
PayPal also offers a buy now pay later option called PayPal Pay in 4.
Businesses can generate PayPal QR codes for invoices.
This mobile wallet for Samsung devices works at any tap-and-pay terminal and requires either fingerprint verification or a PIN for every transaction.
The app also stores loyalty cards.
Users who lose their phone can remotely lock their phone and block access to Samsung Pay.
Opal accepts Samsung Pay.
People within and outside Australia can use a wire transfer to send money to a person or business in Australia. Each bank sets its own fees for wire transfers, which the sender pays. But a receiving bank may also charge a fee.
Senders need the recipient’s account number, bank information and bank SWIFT code.
Some banks require senders to appear in person for a wire transfer.
This buy now, pay later app lets users make purchases of up to $1,000, payable in weekly, fortnightly or monthly instalments. Purchases are interest-free for 3 months. Unlike some other buy now pay later apps, users don’t have to make an initial payment at the time of purchase.
Users can bundle purchases and pay them off as a single debt.
Zip Pay offers a cash back rewards program through participating merchants.
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