1. Understand different payment methods

No one type of payment is best – it will depend on the needs of your business. Make sure you understand how the different methods work.

Credit cards let customers pay for goods and services by creating a debt with a credit card provider.

Debit cards deduct the sale amount from a customer’s bank account.

You can process credit or debit card payments online or by using a physical EFTPOS terminal.

A direct debit is an automatic payment set up on your customer's bank account using their BSB and account number. Direct debit lets you collect payments straight from a customer's bank, making it fast and easy for them to pay you.

Your customer needs to fill out a direct debit form authorising you to take payments from their bank. You can set this up either:

  • directly through your bank.
  • through a direct debit provider. Do your research and shop around for the best service and rates.

Online payments let your customers pay for your goods and services through your website.

Payments can be automatic and convenient. Make sure payment information is encrypted to protect your customers.

Cash payments are useful for low-value items or if other payment methods are unreliable. You will need a method of tracking your sales such as a cash register.

You will also need to regularly bank your cash. Avoid storing large amounts of cash to reduce the risk of theft.

A buy now, pay later (BNPL) service lets your customers pay for their purchase in interest-free instalments.

The customer needs to pay the BNPL provider back over time. However, the provider will give you the full amount at the time of purchase, minus a fee of between 2% and 8%. 

Gift cards and vouchers can increase sales around special occasions. They can also help promote your brand and bring in new customers.

If your business sells gift cards, you’ll need to comply with the gift card laws.

Paying by cheque is rare now that we have electronic payment methods. Cheques require more handling to process and can attract fees. They also take about 3 business days to clear.

A money order tells a bank, credit union, building society or post office to pay you money.

Unlike cheques, money orders are prepaid. Because of this, they can’t bounce due to insufficient funds. But they can bounce due to other problems, such as suspected fraud.

Paying by money order is rare now that we have electronic payment methods.

Digital currencies are similar to money. They can be used to buy and sell goods and services. However, the value of digital currency can change more quickly than traditional currency.

Businesses don’t have to accept digital currency as payment because it isn’t legal tender. 

2. Consider your customers

When choosing payment methods, you need to think about your customers.

Customer preferences

Choosing the payment method your customers prefer makes them more likely to pay on time.

The most common payment method is electronic credit and debit cards. Most in-store card transactions now use contactless 'tap and go' payments.


Some payment methods are more private than others. For example, credit cards and other electronic payments automatically keep a record of the transaction.

Customers might prefer to pay cash for some goods and services, such as medication, to protect their privacy.

3. Make sure it’s reliable

Depending on where your business is, reliance on electricity or telecommunications can be an important factor to consider.

For example, EFTPOS and other electronic payment systems need electricity and an internet connection. While some can operate offline, others may not be available if the systems go down.

4. Check the costs

Some of the costs to consider when you’re choosing your payment methods include:

  • service fees – for example, EFTPOS and credit card providers often charge service fees.
  • transaction costs – the bank may charge a cost for each transaction.

5. Evaluate the risks

Think about the risks of different payment methods. For example, cash has a higher risk of theft because it doesn’t go directly into your bank account. There's also more risk of mistakes with payments.

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