Australia’s payment landscape has evolved significantly in the past few years. Card payments have largely replaced cash, while digital wallets have scaled rapidly. Although still emerging in many countries, instant bank transfers move over $1 trillion Australian dollars (AUD) through the New Payments Platform (NPP) each year.

As a result, a checkout flow that previously leaned on cards may now feel incomplete to customers. To decide which payment methods to offer, businesses must understand how they impact multiple factors such as conversion, payment acceptance costs, and settlement times.

Below, we’ll discuss common payment methods in Australia, how they work, and how to offer a mix that improves revenue.

What’s in this article?

• What are common payment methods in Australia?
  
• How do different payment methods influence cost, speed, and checkout experience?
  
• What regulatory and operational factors shape payment choices in Australia?
  
• How should businesses decide which Australian payment methods to offer?
  
• How Stripe Payments can help
  

What are common payment methods in Australia?

Common payment methods in Australia include cards, digital wallets, buy now, pay later (BNPL), bank transfers through PayID, direct debit through PayTo, and BPAY. As of 2022, cash represented only 13% of consumer payments in Australia.

Here’s how they work:

Cards

In Australia, about 75% of all transactions are made by card. Contactless tap-and-go payments are standard for in-person purchases. Cards run through a standard online flow that requires the card number, expiration date, card verification code (CVC), and/or a saved card token.

When a customer taps or enters a card, their details go to the business’s payment processor, which checks for authorization with the card network and issuing bank. If the bank approves, the sale goes through and the business receives the funds, normally within one to three business days.

Dual-network debit cards are also common in Australia. Debit cards typically can run on the domestic eftpos network or the international Visa/Mastercard network. If the customer taps, the transaction usually routes through the international networks by default. But businesses can turn on least-cost routing, which sends contactless debit transactions through whichever network is cheaper at that moment.

Note: an update to card rules in 2026 will restrict merchants’ ability to surcharge and may make cards a less attractive payment method.

Digital wallets

Digital wallets such as Apple Pay and Google Pay have become a default option for many Australians, rising in popularity because of the speed and security they offer. In a single month in 2024, Australians made over 500 million digital wallet transactions worth more than $20 billion AUD.

When a customer pays with a digital wallet, they authenticate with Face ID, Touch ID, or a passcode. The phone uses near-field communication (NFC) to send a token to the terminal (for in-person transactions) or secure in-app/web flow (for online checkout). The transaction then clears over the same networks as a normal card.

BNPL

BNPL splits a purchase into installments while paying the business upfront. More than one in three Australians have used BNPL for online purchases, and annual transaction volume is more than $20 billion AUD. BNPL is particularly effective in ecommerce and retail, where installment options can increase conversion and cart size.

At checkout, the customer chooses a BNPL option and logs in or signs up. The BNPL provider checks affordability and approves or declines the purchase. The provider pays the business, minus a fee. The customer then repays the provider across the agreed installments.

While BNPL feels instant to the customer, it has a few extra steps and credit-assessment layer running in the background.

PayID

PayID, which runs on the NPP, has made real-time bank transfers much simpler. Customers can send money using a phone number, email address, or Australian Business Number (ABN) instead of bank-state-branch (BSB) and account numbers. Australians have created more than 27 million PayIDs, and NPP moves nearly $2 trillion AUD annually in real-time transfers.

To use it, the customer enters their PayID into their banking app. Their bank confirms the name, and the business receives the funds near-instantly.

PayID removes interchange fees and eliminates chargebacks. But it involves one more step for customers, who must switch over to their banking app to pay (unless the business uses a more integrated handoff).

PayTo

PayTo, which is also built on NPP, modernizes direct debit and is a strong alternative to cards, especially for recurring payments.

Traditional direct debit (BECS) pulls funds from a customer’s bank account after customer authorization. It’s reliable for subscriptions and recurring billing, with settlement typically taking one to two days. However, failures from insufficient funds or closed accounts can show up after the fact.

PayTo is set to replace BECS completely by 2030. With PayTo, the business instead sends a digital “payment agreement” to the customer’s banking app. The customer can approve it instantly. Payments then clear in real time, and customers can view or pause agreements in their bank app.

BPAY

BPAY is a bill-payment system integrated into almost every Australian bank. The business places a biller code and customer reference number on the invoice, and the customer pays through their banking app. Funds generally settle the next business day.

BPAY isn’t usually part of a real-time retail checkout, but it remains deeply entrenched for household and business bills. It’s integrated across nearly all banks’ online and mobile apps, which makes it familiar to customers.

How do different payment methods influence cost, speed, and checkout experience?

Each payment method carries different tradeoffs. When choosing a mix of options, businesses working in Australia should balance cost, settlement timing, and checkout path.

Here’s how each method works:

Credit and debit cards

• Cost to business: Credit is typically 1%–3%; debit is often <1% (typically cheapest via eftpos and least-cost routing)

• Settlement speed: 1–3 business days

• Checkout experience: In-person tap is instant; online entry requires card details unless saved

Digital wallets (e.g., Apple Pay, Google Pay)

• Cost to business: Equal to underlying card fee

• Settlement speed: 1–3 business days

• Checkout experience: In-person tap is instant; biometric confirmation makes online and mobile checkout very fast

BNPL

• Cost to business: Typically higher than card fees

• Settlement speed: 1–2 business days

• Checkout experience: Fast for existing users; new users go through signup and a rapid credit check

PayID

• Cost to business: Low and/or flat fee

• Settlement speed: Instant and 24/7

• Checkout experience: Requires switching to a banking app, unless a third party provides integrations

PayTo

• Cost to business: Low and/or flat fee

• Settlement speed: Instant confirmation, real-time payment initiation

• Checkout experience: Customer approves payment agreement in their banking app

BPAY

• Cost to business: Flat fee

• Settlement speed: Overnight batch settlement

• Checkout experience: Customer pays through their bank app; not used for real-time checkout

What regulatory and operational factors shape payment choices in Australia?

Australia’s payment environment is shaped by hands-on regulation, modern infrastructure, and consumer expectations of straightforward and low-cost methods. These influence what businesses can offer and what customers expect.

Here’s what’s to know:

Regulations are pushing lower-cost payments

The Reserve Bank of Australia (RBA) caps domestic interchange fees. Debit interchange sits at a few cents, and credit is capped at 0.5%–0.8%. In 2025, the RBA proposed cutting the credit cap to 0.3%. If passed, this cap would be implemented from July 2026. The RBA has also pushed banks and processors to support least-cost routing, which means businesses can steer contactless debit transactions through the cheaper eftpos network.

BNPL is coming under formal credit regulation

Because BNPL is being pulled under the National Consumer Credit Protection Act, it will soon come with formal affordability checks and responsible-lending requirements. This will bring more consistency to approvals and eliminate rules that previously prevented businesses from surcharging BNPL fees.

New infrastructure is reshaping settlement speed

The NPP, which sits underneath PayID and PayTo, enables instant bank transfers and real-time direct debit approvals. Australia plans to retire the BECS Direct Debit system by 2030 and replace it with PayTo.

Operational norms are defining consumer expectations

Tap to pay is nearly universal, digital wallets have become standard, and BPAY remains embedded in bill payment routines. These norms create an environment where customers generally expect businesses of every size to support fast, easy, and flexible payment options.

How should businesses decide which Australian payment methods to offer?

Choosing the right mix of payment methods is ultimately about satisfying customer expectations while keeping your own costs, operations, and risk under control. Building on the positives of the Australian market (e.g., consistent consumer payment habits and mature payment methods), can help you create an effective strategy.

Here’s what to consider:

Start with your customers

Different audiences tend toward different payment patterns:

• Younger, mobile-first shoppers are more likely to use digital wallets and BNPL

• High-ticket or business-to-business (B2B) buyers frequently use bank transfers or PayID

• In-person retail must support tap-and-go or lose step with the market

Determine how your customers already pay and start there.

Match the method to the transaction

Payment fit depends on context:

• Low-margin, high-volume retail: Emphasize cheaper debit routing and PayID for big orders

• Subscription or membership models: PayTo can cut down churn from expired cards

• Impulse or mobile-heavy purchases: Digital wallets can reduce abandoned carts

• Large invoices: Customers often opt for account-to-account transfers

Only offer what makes sense for how you sell.

Balance cost with conversion

Some methods are more expensive, but reliably increase sales. BNPL carries high fees, but the flexibility it offers can lift conversion rates or cart size enough to be worth it. Digital wallets cost the same as cards and often improve mobile conversion. PayID and PayTo settle instantly at almost no cost, but might require more customer education.

Keep complexity manageable

Each new payment method adds a layer of refunds, settlements, reconciliation, and customer support. A unified payments provider such as Stripe helps centralize this under one integration and one reporting surface.

Stay ahead of regulatory and infrastructure shifts

PayTo adoption is rising, and BECS is scheduled to sunset by 2030, so any business running direct debit should plan for migration. BNPL’s shift into credit regulation could also change user flows over time, and RBA interchange updates can affect your cost structure. Stay on top of these changes, and you’ll be prepared to shift along with Australia’s dynamic payment ecosystem.

How Stripe Payments can help

Stripe Payments provides a unified, global payments 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 payments 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.