Top payment methods for small businesses in Australia

Only 18% of small businesses in Australia accept mobile payments¹ like Apple Pay or Google Pay, even though that’s how most people pay these days.

When a customer hits “buy” and you’re still waiting for the money to show up, it’s not just annoying; it messes with your cash flow.

Let’s break down the payment options out there and how to find the ones that actually work for your business. Read on.

Table of contents
Small businesses payment methods Choosing the right payment method for your small business Wise Business: Get paid across borders FAQs

Different payment methods available for small businesses

Payments are how small businesses stay afloat and grow. They keep money moving, cover everyday costs, and support plans. Many clients prefer to make payments through online transfers or international invoices. When these payments are delayed, it can really affect cash flow, making it tougher to pay freelancers or buy new software, etc.

For small businesses, having a smooth payment system means fewer hiccups, greater stability, and the ability to concentrate on what truly matters. Below, you'll find a list of the main payment options available to small businesses:

Credit and debit cards

Credit and debit cards are the most common way Australians pay for goods and services. Credit cards let customers borrow from their card provider. Debit cards deduct money directly from a customer’s bank account. You can accept card payments through an EFTPOS terminal or an online checkout. Transactions are fast and reliable, though most providers charge a service fee of around 1% to 3%.

Contactless and QR payments

Contactless payments are also common in Australia. Customers tap a card, phone, or smartwatch for quick, secure transactions. QR payments are also rising, allowing customers to scan a code and pay instantly. Both methods speed up checkout and cut down on cash handling, making them ideal for cafés and mobile businesses.

Point of Sale (PoS) systems

PoS systems handle cards, contactless payments, and mobile wallets while tracking sales and inventory. Common options in Australia include Square, Tyro, and Shopify POS. They improve accuracy and real-time management, and when linked to international transactions, Wise can simplify settlements and currency conversion.

Online payment platforms

Online payment platforms make it easy for customers to pay right on your website or through an invoice. You’ve probably heard of PayPal, Stripe, or Wise Business; tools that work well for online stores, freelancers, and any business running on subscriptions. They keep things secure by encrypting payment information.

However, watch out for extra fees, especially if you handle a lot of payments or work with customers overseas.

Direct debit

Direct debit lets you automatically collect payments from a customer’s bank account once they authorise it. It’s useful for recurring payments like memberships or services, though setup costs and processing times vary by provider.

Bank transfers

Bank transfers (including EFT, PayID, Osko, and direct debit arrangements) are widely used for B2B and high-value transactions. They are secure and traceable but can take one to three business days to clear. International bank transfers often include extra fees and longer settlement times.

The edge you would have while using Wise is that it offers local account details in several currencies, allowing faster, lower-cost international transfers.

Buy Now, Pay Later (BNPL) services

BNPL options, such as Afterpay and Zip, let customers pay for purchases in interest-free instalments. The provider pays you upfront, minus a merchant fee. BNPL can attract customers who prefer flexible payments, but it may increase your costs. It works best for retail or online stores with higher transaction values.

Cash

Cash payments are quick and don’t come with any extra fees, so they work well for small sales. But you have to handle the money yourself and keep making deposits, or mistakes and theft can creep in. As digital payments are becoming common these days, relying just on cash can limit customer reach.

Gift cards and vouchers

Gift cards and vouchers can really give your sales a boost, especially during holidays or major events. They’re also a good way to attract new customers. If you decide to offer gift cards, just be sure to comply with Australian regulations regarding expiry dates, fees, and the information you need to provide to your customers.

Cheques

Cheques are now rare in Australia, as electronic payments are faster and easier. They require manual processing, attract fees, and typically take around three business days to clear. Cheques are mainly used by some government agencies or older customers, but are being phased out by most businesses.

Money orders

Money orders instruct a financial institution or post office to pay you a specific amount. They are prepaid, so they can’t bounce due to insufficient funds, but they may still fail due to fraud concerns. Money orders are now uncommon due to the convenience of digital payment options.

Bitcoin and digital currencies

Digital currencies like Bitcoin can be used to buy and sell goods or services, but their value changes rapidly compared to regular money. Businesses in Australia are not required to accept them, as they are not legal tender. They may suit businesses familiar with crypto markets, but volatility and lack of regulation make them a niche choice.

How to choose the best payment option for your small business

Choosing appropriate payment methods influences the money flow through a business, transaction expense per dollar, and how customers make purchases. The ideal mix is determined by business size, customer base, and operational structure.

Important points to keep in mind are:

• Customer preference
  Payment methods must be consistent with customers' usual way of paying. Card and mobile wallet users assume instant, smooth payments, while others may prefer classic bank transfers. Transaction completion rates and customer experience are impacted by this.

• Transaction fees
  All payment channels have a service fee, subscription fee, or currency exchange fee. Tracking these charges maintains margins and optimises pricing.

• Payment speed
  Settlement times vary by method. Real-time payments via PayID or contactless alternatives enhance cash flow, whereas card or foreign transfers can take longer. Faster payments facilitate steady cash management.

• Security
  Payment systems should safeguard both business and customer information through encryption and authentication. Maximum security minimizes the possibility of fraud, chargebacks, and data breaches.

• Integration with systems
  Payment instruments connecting to accounting or point-of-sale platforms minimize errors and manual entry. Integrated platforms simplify record-keeping and reconciliation.

• International capability
  Companies transacting with foreign customers require payment systems that handle numerous currencies and transparent conversions. me, enhancing efficiency for cross-border payments.

• Reliability
  A payment mechanism must be reliable and work even in the absence of the internet or power supply. Efficient systems minimize failed transactions and loss of revenues.

• Mobility and accessibility
  Businesses that are on-the-go or mobile use portable or app-based payment devices like PoS terminals and QR codes. They facilitate sales at various locations without having to invest in fixed infrastructure.

• Regulatory compliance
  All payments made via systems deployed in Australia have to adhere to financial and data protection regulations, such as PCI DSS for card information. Having compliance guarantees legal and safe processing of transactions.

Wise Business: Get paid across borders

Receiving payments from clients overseas can often feel like a waiting game. Traditional bank transfers can drag on for days, and the intermediary fees or unfavourable exchange rates can really eat into what you actually receive. For Australian freelancers, exporters, and creative agencies, these delays can disrupt cash flow and make financial planning more difficult.

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.

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FAQs

1. What’s the cheapest way for a small business to accept payments?

It all comes down to how you run your business. If you’re taking payments locally, PayID and regular bank transfers usually cost the least. For international payments, you’ll want something with clear fees and good exchange rates—Wise Business is a solid pick for that. You’ll dodge a lot of extra charges this way.

2. How fast do you actually get your money after a sale?

It depends on how you’re paid:

• Cash is instant.
• Cards usually take one or two business days.
• Bank transfers take anywhere from one to three days.
• Online platforms are usually about a day or two as well.

If you’re dealing with international transfers, they can drag on longer, depending on the banks and which currencies you’re moving.

3. What’s a chargeback, and how do you avoid them?

A chargeback happens when a customer tells their bank they want a payment reversed, maybe they think it’s fraud, there’s a billing screw-up, or they’re just not happy with what they got. You can cut down your risk by keeping your records straight, giving clear receipts, and using secure payment systems. It’s all about being organized and upfront.

4. Do you get hit with fees for receiving international payments?

Yes, you do. Banks and payment services almost always charge you for processing those payments or converting currencies. The best way is to check the current exchange rates and compare providers before you choose, as some will take a bigger cut than others.

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Sources:

1.Mobile payments