Best Payment Gateways for Small Businesses in Australia

The best payment gateways for small Australian businesses strike the sweet spot between simplicity, efficiency, and price. But with so many competing payment systems crowding out the market, Aussie start-ups might struggle to pinpoint the perfect product.

In this post, we’re covering the key payment gateway considerations and challenges, then comparing four leading options for small Australian business owners like you.

Understanding payment gateways for Australian small businesses

The payment gateway is a “digital checkout” that acts as an intermediary between an e-commerce store/POS terminal and the merchant’s bank account. Payment gateways authorise card or digital payments to securely transfer funds from customers to merchants.

Online payment gateways generally run on cloud servers. In an in-person retail context, the payment gateway is typically incorporated with the POS system.

Small digital businesses generally use hosted third-party payment gateways, such as Square or Stripe. When customers make an online purchase, the gateway opens a secure new window to encrypt sensitive data, validate card details, and finalise the transaction. Some modern payment gateways include tools for fraud prevention and analytics.

Payment gateways offer many benefits to small businesses in Australia:

• Speed: Faster deposits shorten the payment cycle and improve cash flow.
• Automation: Automated payment authorisations and settlements reduce the need for manual invoicing.
• Security: Gateways safeguard sensitive data through encryption and tokenisation, as well as built-in fraud protection tools
• Compliance: Hosted gateways handle PCI DSS (Payment Card Industry Data Security Standard) requirements.
• Conversions: Smooth checkouts and multiple payment options (Google Pay, Apple Pay, card, etc.) reduce cart abandonment.
• Integrations: Gateways canfunction with leading accounting software, such as Xero and QuickBooks, and financial service providers like Wise.

What to look for in the best online payment systems for small businesses

When comparing payment gateways, keep the following considerations in mind.

• Fees: Weigh up the fees – monthly, per-transaction, refunds, chargebacks, settlements, payment methods, terminations, and FOREX.
• Security & compliance: A secure gateway complies with PCI DSS and Australian Prudential Regulation Authority (APRA) regulations.
• Fraud protection: Disputes can eat into your revenue. Some gateways include tools to detect and prevent authorised transactions.
• Payment methods: A wide variety (cards, digital wallets, Buy Now Pay Later, bank transfers) adds convenience and improves conversion rates.
• Settlement speed: Does the payment gateway process transactions quickly enough for your business?
• Scalability: Can you adjust your payment gateway plan or inclusions to better suit your business as it grows?
• Checkout: A frictionless, single-page checkout with no forced account creations, simplified forms, and a mobile-first design will boost conversion rates.
• Implementation: No-code payment gateways and onboarding guides can make setup quicker and easier.
• Customer support: As downtime can lead to significant losses, some payment gateways offer round-the-clock support via phone, live chat, and email.
• Omnichannel: Businesses selling products in-person and online need an omnichannel payment gateway.
• Analytics: Would your business benefit from analytical tools tracking expenses and sales?
• Multi-currency support: Aussies trading overseas may want a payment gateway that integrates with a multi-currency account to save on FOREX fees.

4 best payment gateways in Australia for small businesses

To help you find the right payment gateway, we’re comparing 4 top options for Aussies.

Square: Easy-to-use

Massively popular among small Australian brick-and-mortar stores, Square is a user-friendly small business payment solution known for its simplicity and low transaction fees. Square charges 1.6% for in-person card fees and 2.2% for online and remote card transactions. Getting started through the app is free.¹

Offline functionality lets you process in-person payments during an internet outage, and businesses can automatically pass on EFTPOS fees to the customer. Businesses can choose to use an eligible smartphone for accepting in-person payments or purchase a suitable POS system from Square. While the service shines for in-person businesses, Square also caters to online traders.¹

Stripe: Excellent advanced features

Stripe is one of the world’s largest payment gateways, a full-stack service wooing complex businesses with its broad, feature-rich suite. Stripe offers a suite of advanced features for authorisation, fraud detection, dispute management, and payment analytics. Smaller businesses will appreciate simplified services like payment links, a one-click checkout page, in-person terminal payments, and access to 100+ payment methods.²

Pricewise, Stripe remains competitive, charging 1.7% + A$0.30 for domestic cards and 3.5% + A$0.30 for international cards.² Some features may require a monthly subscription fee. The platform is also highly reliable, with an impressive 99.999% uptime. In-person traders should know that Stripe offers a range of pre-certified POS devices and allows Aussie businesses to BYOD.

PayPal: Great for building trust

The other payment gateway behemoth is PayPal, a large multinational brand serving Australia for decades. Its core offerings include a PayPal embedded online checkout, a fast guest checkout, instalment payments, and an invoicing tool. Built-in security from AI-powered fraud protection tools helps reduce disputes, and eligible purchases receive PayPal’s famous Seller Protection.³

The brand, which has over 400M active accounts,³ is well-regarded and trusted, which may help some businesses improve conversions. The downside, however, is that PayPal charges higher fees than other providers. Expect to pay 2.90% + a fixed fee for commercial domestic transactions, and an extra 1% for international payments.⁴

eWay: Good locally made solution

A local Australian brand serving over 97,000 businesses,⁵ eWay specialises in providing online payment systems for small businesses, including gateways. The company prides itself on transparency and value, offering fast settlements with no hidden fees. Cybersecurity tools include fraud prevention and PCI DSS level 1 card data protection.⁵

Integrations span well-known brands such as Shopify, WooCommerce, Oracle NetSuite, and Xero. An exhaustive knowledge base and blog complement the customer support, which is open 24 hours for urgent after-hours disasters.⁵

Small businesses might benefit from its Online Payments product, which includes everything you need to start trading on the internet. Domestic card payments will set you back 1.5% + 25c, with international payments costing 1.99% extra. No setup or ongoing fees required.⁶

Common challenges with payment processing for small businesses

Payment gateways can prove hugely useful for small Australian businesses. But there are obstacles to consider.

• Slow settlements: Some gateways dawdle during transaction processing, leading to late settlements and sluggish cash flow.
• Implementation issues: Integrating a payment gateway with your website or software can be tough for non-technically-minded entrepreneurs.
• Cart abandonment: Slow load times, limited payment options, and mandatory account creation can prompt would-be customers to shop elsewhere.
• Payment disputes: Fraudulent transactions can require significant admin to resolve.
• Limited support: Inadequate customer support can make it challenging for business owners to resolve complex issues.
• International payments: High international transaction charges and hidden foreign exchange rates can dig into your bottom line when trading abroad.

Wise Business: A cost-effective solution for Aussies trading overseas

Choosing a payment gateway is only half the battle for Australian businesses dealing with cross-currency transactions. While platforms like Stripe and PayPal offer great functionality, their internal currency conversion rates can be hefty and add up as significant costs for small businesses.

Wise Business helps solve the challenge of high international transaction costs by giving access to local account details in 8+ currencies. Conversions are done with transparent fees and at the mid-market exchange rate with no hidden markups. This means businesses can link the Wise Business account details to the gateway and collect international sales in the original currency.

Expanding a business globally opens up exciting opportunities, but also new challenges like receiving payments across borders. Hidden foreign transaction fees and hefty currency conversions involved with international payments can eat into your profits and time.

Wise Business serves as a cost-effective solution where you can receive money from around the world at the speed and price of local payments.

Transform the way you receive payments with Wise Business:

• One-time fee of 65 AUD for local account details in 8+ currencies, including AUD, NZD, USD, and more—no recurring fees
• One account to hold, send, and convert money with no hidden fees or exchange rate markups
• Create and send professional invoices directly to your customers through Wise Business
• Create payment links to request money in specific currencies
• Seamlessly receive payments from customers, online sales, or PSPs like Stripe and Amazon.
• Wise is safe and secure - Trusted by 13 million people and counting

Sign up for the Wise Business account! 🚀

This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

FAQs

1. What is a payment gateway?
A payment gateway authorises and processes payments a customer makes to a business, acting as a bridge between a website/POS and a merchant bank account.

2. Do payment gateways work for in-person payments?
Yes. For in-person payments, payment gateways are generally embedded in the POS system. Some work offline.

3. How much do payment gateways cost in Australia?
Prices vary between providers. Costs usually include a percentage fee (i.e., 1.6%) and a fixed fee (i.e., $0.30). International payments often cost more.

Sources

1. Square: Accepting Payments
2. Stripe: Payments
3. PayPal: Accept Payments
4. PayPal: PayPal Business Fees
5. eWay: eWay
6. eWay: Online payments