Payments in Australia move fast. Contactless cards and digital wallets are the norm, real-time bank transfers are increasing, and cash is being used less often. With sophisticated tech and tight regulations, customer expectations are high. If you’re running a business in Australia or expanding into the market, getting payments right is part of how you stay competitive.

Below, we’ll break down what payment processing in Australia looks like today, how to evaluate methods and partners, and what to watch for as you scale.

What’s in this article?

• How does payment processing in Australia work?
  
• How do major Australian payment methods differ?
  
• How is payment processing in Australia regulated?
  
• How should businesses in Australia evaluate payment partners?
  
• What challenges arise when scaling payment volume in Australia?
  
• How Stripe Payments can help
  

How does payment processing in Australia work?

Payment processing in Australia is fast, digital-first, and strictly regulated. Businesses that operate here need to offer the right payment options and understand the infrastructure, compliance rules, and expectations that shape money movement.

Australians have largely left cash behind. The percentage of customers who reported using cash at least once a month dropped from 80% in 2015 to just 45% in 2025. Cards, especially contactless cards, are the norm for in-person and online purchases, and digital wallets like Apple Pay and Google Pay are deeply embedded in everyday behavior. At the same time, real-time bank transfers are gaining ground.

If you want to operate in Australia, you need to offer digital, real-time payment options. And your payment partners need to move fast and be fully compliant.

How do major Australian payment methods differ?

Australia’s payment mix is diverse. Each method comes with trade-offs regarding how fast money settles, how much it costs to accept, and how well it fits different business models.

Here’s what you need to know about the main payment methods in Australia.

Cards

Credit and debit cards are the default for many purchases, both online and in-store. Nearly every adult has one, and 95% of card-present transactions in 2022 were contactless. Many businesses use fraud prevention tools such as 3D Secure and network-based risk scoring.

• Speed: Authorizations happen in real time. Settlement usually takes 1–3 business days.

• Cost: Card acceptance comes with processing fees, depending on card type. Debit cards via the domestic EFTPOS (short for Electronic Funds Transfer at Point of Sale) network tend to be cheaper than credit cards.

• Fit: Cards are suitable for retail, hospitality, and ecommerce, and easy to support internationally. But watch for fraud and chargebacks.

Digital wallets

Wallets like Apple Pay and Google Pay are mainstream in Australia. They work as tap-and-go replacements for physical cards and as one-click options online. They also add a layer of biometric security (e.g., Face ID, fingerprint) that helps reduce fraud.

• Speed: Authorization is instant. Wallets authorize and settle just like physical cards.

• Cost: Wallets have the same pricing as the underlying card. There are no extra fees for wallet acceptance.

• Fit: Their use is growing fast in physical retail. In 2024, Australians made payments worth 160 billion Australian dollars total with digital wallets.

Real-time bank transfers

Real-time bank payments built on the New Payments Platform (NPP), such as PayID, Osko, and PayTo, are reshaping how people move money in Australia.

• Speed: Funds can clear in seconds 24/7, even on weekends.

• Cost: The cost of these transfers is typically lower than that of cards. Banks usually don’t charge customers, but businesses might pay a flat fee per transfer.

• Fit: PayID is well suited to ad hoc or invoice-based payments because customers can send money using a phone number, email, or Australian Business Number (ABN). Osko adds payment descriptions and confirmations, which is helpful when speed and reconciliation matter. PayTo allows businesses to pull funds from a customer’s account with prior digital consent, which makes it ideal for subscriptions or installment billing.

BPAY

BPAY is a bill payment system integrated into Australian bank apps. It’s not designed for ecommerce checkouts but works well for invoice payments or recurring billing.

• Speed: BPAY settles overnight or the next business day.

• Cost: This system has flat fees, which are usually lower than card processing fees.

• Fit: It’s common for utilities, government transactions, and larger invoices. Customers use BPAY to pay bills directly from their bank accounts.

Direct debit

The Bulk Electronic Clearing System (BECS) is the legacy direct debit system for pulling funds from bank accounts.

• Speed: Direct debits typically settle in two business days. Failures due to insufficient funds might appear only after the fact.

• Cost: They have low per-transaction costs. That makes them useful for high-value or recurring payments where card fees would be too high.

• Fit: They’re still used widely by insurers, gyms, and utilities, but PayTo will eventually replace BECS.

Buy now, pay later (BNPL)

BNPL services like Afterpay and Zip are very popular in Australian retail. BNPL providers typically handle collections and fraud, reducing the risk to sellers. The trade-off is margin.

• Speed: Payments receive immediate approval at checkout. Sellers are usually paid within a day or two.

• Cost: BNPL incurs higher costs per transaction than cards.

• Fit: It’s common in B2C verticals such as fashion and electronics, especially among younger customers.

How is payment processing in Australia regulated?

Australia’s payment system is heavily regulated so businesses need to know the rules under which their payment partners operate. Here’s a closer look.

Financial licensing and oversight

Generally, payment providers must have an Australian financial services (AFS) license, which is regulated by the Australian Securities & Investments Commission. Banks and large payments platforms could also be subject to oversight by the Australian Prudential Regulation Authority. If a provider is holding or moving money on your behalf, it needs to be properly licensed or work under a licensed entity.

Anti-Money Laundering (AML) and Know Your Customer (KYC)

Australian Transaction Reports and Analysis Centre (AUSTRAC) enforces AML and Countering the Financing of Terrorism (CFT) laws. Providers that offer designated payment or value transfer services need to register with AUSTRAC, verify customer identities with KYC checks, and monitor for suspicious activity. These rules apply whether the provider is local or serving Australian users from overseas.

Payment Card Industry Data Security Standard (PCI DSS)

If you handle card payments, you’re responsible for PCI DSS compliance. The easiest path is to use a certified payment provider that simplifies your scope. That means you never touch raw card data and security—tokenization, encryption, and access controls—is handled at the infrastructure level.

Consumer protections

Australia’s ePayments Code, along with broader consumer law, clarifies expectations for payment transparency, dispute handling, and consumer protections. Those include rules against excessive card surcharges, obligations to resolve mistaken payments, and guidelines for how chargebacks or unauthorized debits are handled.

Data privacy and tax

You’re responsible for handling customer payment data under the Privacy Act and for collecting goods and services tax (GST) where applicable. Working with an established payment provider like Stripe off-loads much of this work.

How should businesses in Australia evaluate payment partners?

Choosing a payment partner in Australia is important: you’re choosing a system that moves your revenue, protects your customers’ data, and shapes your operations. If your business is growing, you need a partner with modern infrastructure, smart tooling, and a support team that understands local context.

Here’s what matters when you evaluate providers.

Local method support

Customers in Australia pay with cards, digital wallets, and real-time bank transfers via the NPP, including through services such as Osko and PayTo. Your payment partner should support domestic EFTPOS routing for lower fees.

Global and multicurrency capabilities

If you sell across borders, your provider should accept international cards without failover issues. If customers abroad can’t pay in a way that’s natural for them, you could lose them at checkout. Your provider should convert currency transparently and offer clear foreign exchange rates.

Licensing, security, and reliability

Partners that aren’t transparent and clear about compliance won’t scale with you. Work only with providers that are up front about their data handling and security practices. Payment services should be registered with AUSTRAC (if applicable), PCI Level 1 certified, and operating under an AFS license or an authorized representative model.

Clear costs

Look beyond the headline rates to understand the processing charges. Does the provider have dual-network card routing (via EFTPOS) to reduce interchange fees? Are there hidden charges for refunds, chargebacks, or payouts? Can it offer volume-based pricing when your scale justifies it?

Integration tools

The details of integration and how much control your team has over the payment experience will shape daily workflows. You need a partner with strong application programming interfaces (APIs), well-designed dashboards, and real-time reporting. Also consider other clients’ reviews and testimonials to understand whether the onboarding speed and ongoing support match your needs.

What challenges arise when scaling payment volume in Australia?

Growing payment volume shouldn’t create chaos. But without tight systems and the right infrastructure, it often does. Scaling your payment systems takes deliberate investment.

Here’s what you should keep an eye on.

Reliability under load

Payment systems need to be resilient as well as fast. At scale, even a brief outage at your gateway or upstream at the Reserve Bank of Australia or NPP can create real downstream pain. Choose providers with proven uptime, redundancy, and active incident response. Subscribe to their status pages, and monitor your own fail rates.

Reconciliation and cash flow

More payments mean more data to match. You’ll need automation to reconcile payouts, fees, refunds, and settlement timing across methods. If you’re using multiple payment methods, ensure your system can coalesce those into one clean ledger view.

Fraud and disputes

Card-not-present fraud tends to grow with volume, as do chargebacks. You’ll need to calibrate risk tools, invest in evidence workflows, and track performance across regions and card types. Tools such as 3D Secure and machine learning–based fraud scores help, but they require tuning.

Compliance drift

Larger volumes and cross-border flows raise expectations on AML and KYC, tax reporting, and PCI scope. What worked at launch might not hold under audit at scale. Revisit your provider agreements and internal controls regularly.

How Stripe Payments can help

Stripe Payments provides a unified, global payment solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe.

• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.

• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.

• Improve payment performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.

• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.