Payment gateway integration options for start-ups in Australia

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Payment Gateway Integration Options for start-ups in Australia

Payment Gateway Integration Options

When it comes to online payment gateways, Australian business owners (G’day Mates) still face many hurdles setting up eCommerce stores. This is mainly because there are few payment gateways compared to US counterparts and Australian banks are more conservative in serving online businesses. In this article, we explore the payment gateway options that Australian start-ups have and alternatives that can help business owners start accepting credit cards online easily.

The eCommerce ecosystem in Australia is steadily growing and merchant account providers from the US are taking note. With notable subscription commerce businesses like 99designs and Atlassian coming from Australia, it is no wonder that subscription payment solution providers like Braintree are setting base in Aussie.

PayPal in Australia

For a long time, start-ups or businesses that wanted to accept credit cards online in Australia have had to rely on PayPal. If you choose to sell with PayPal, you may not need to use SSL on your website (You’ve to use SSL if you are using API to connect with PayPal – PCI Compliance and getting trust from your customers). This is one of the advantages of using the payment processor. The benefits of PayPal are clear:

  • Low transaction fees
  • Fee sign up and easy set up
  • Different plans for both businesses and individuals
  • Majority of customers trust PayPal for online payments

However, the horror of PayPal usually comes when merchants least expect. The company’s strict automated security protection has been a cause for worry for many merchants. Without warning, PayPal can freeze funds in your account and it may take up to six months to get your problems sorted out. (Read more PayPal horror stories). With customers waiting for their orders or suppliers on your neck, you can easily go out of business.

Another downside of using PayPal is that the company does not support credit card portability. This may not be an issue if you do small time eCommerce  However, if you are running a subscription based business, you may be back to square one should you decide to switch to a different merchant.

Payment Gateways in Australia

You can integrate a gateway on your website i.e. a third party provider that manages the customers’ transactions. Payment gateways ensure the security of your customers’ credit card data by facilitating the transaction between their financial institutions and your bank in a secure manner.

Let’s look at some of the top payment gateways in Australia.

1. Braintree

Braintree has just entered the Australian market and is expected to make it easy for businesses that sell to the US and Europe. The company is set to challenge PayPal’s dominance in the country by offering conveniences like credit card portability. The online payment gateway and merchant account solution charges a $35 monthly fees and transaction fees start at 2.28% + $0.30 per transaction. Check more on Braintree’s pricing at its website.

With Braintree’s reputation in the US, it will definitely make an impact in the Aussie market.

2. Pin

We discussed about a number of companies trying to clone Stripe in other countries in one of our article. Pin is one in that category. They are in Beta and expected to launch soon. Just like Stripe, Pin was designed for Developers. It does not require a gateway or a merchant account. Pin boasts of simple signup and transparent pricing. It includes a monthly service fee + paying for successful transactions.

If you want to participate in the Beta, you can send a request here.

3. eWay

eWay is another great option of accepting credit cards in Australia. We’ve heard some great feedback about their support. The payment gateway has partnered with over 23 local banks to enable direct deposits for merchants. eWay takes out the hassle of getting paid online and has integrated over 180 Australian shopping carts and has a community of over 500 developers that can help you with setting up the payment gateways.

Some of the features of the payment gateways include:

  • No redirecting customers away from your website
  • Social commerce communication tools
  • Support for mobile payments
  • Reporting tools to help you track transactions
  • Different pricing based on plans

4. Fat Zebra

FatZebra prides itself in understanding the complexities of Australian banks with regards to merchant accounts and online businesses. Unlike in the US where more banks are ready to offer merchant accounts, the situation is a little tougher in Australia. FatZebra makes it easy for anyone to start selling online and has partnered with major banks in the country including NAB, Bank SA, St. George, Commonwealth Bank, ANZ and others.

5. PayMate

PayMate is a great PayPal alternative in Australia and supports online and mobile credit card payments. The company helps businesses understand the set up requirements and local regulations on accepting credit cards online and will send the money to your bank. EBay Australia has integrated the gateway on its website and recommends it to online shoppers.

With PayMate, you can receive payment from customers from 60 countries. PayMate operates in nearly the same way as PayPal. Both buyers and sellers can use the gateways for online transactions.

Other payment gateways in Australia you can consider includes MasterCard Internet Gateway Service (MiGS), Payflow Pro, Payment Express, SecurePay Australia, WorldPay Global Gateway, Paychoicee-PathMerchant WarriorSecurePayeMatters, and SCNet.

International Payment Gateways

If you are an Australian business that sells overseas, particularly to US or Europe, you might want to sign up with a payment gateway that is more popular in your target market and a gateway in that country to avoid international fee for your customers. While online technology and fraud protection has tremendously improved, many shoppers are still reluctant to give their credit card details at gateways that they do not know. Therefore, you will want to support the payment gateway that your market is used to.

Below are some payment gateways that Australian business can opt for if they are selling internationally.

1) 2Checkout

2Checkout also combines a payment gateway and merchant account into one. With 2CO, you can accept international payments, PayPal payments and also set up recurring payments. This is one of the most preferred international PayPal alternatives in countries where PayPal has severe restrictions. If you are targeting markets in the EMEA countries, 2CO can be a good solution.

2) Google Checkout

Google’s alternative to PayPal is Google Checkout. The advantage of the payment solution is that millions of people use Google services and this makes the checkout process simpler. The transaction fees with the solution depend on monthly sales volume. If your sales are less than $3000, the fees start 2.9% + $0.30.Click here for a more comprehensive fee break down.

Choosing a Payment Gateway for your Australian Start-up

There are other alternative online payment solutions that Australian business owners can opt for. What is however important to remember is that your solution should be used by the majority of your target market. If you are selling mainly to the local market, one of the solutions from Australia will be great. On the other hand, if you are selling overseas, some of the international payments will be ideal.

When choosing a merchant account provider, you need to check whether the solution will work for your business. Look at the fees, merchant account agreement, support and reputation of the company. Ultimately, you will have to strike a balance on the features that you want and what the merchant account provider offers.

Which payment gateways do you recommend for Australian start-ups or businesses that wish to accept credit card payments? Share your thoughts below.

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Posted on December 6, 2012

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