Payment gateways australia
ONLINE CREDIT CARD PAYMENTS AND PAYMENT GATEWAY REVIEWS IN AUSTRALIA
With the numerous Payment Gateways in Australia it has become an increasingly difficult task to determine which Payment Gateway in Australia is the best value. This website provides information on some of the major Payment Gateways in Australia to help merchants or start-up business owners determine which Australia Payment Gateway may be best suited for accepting payments online for their online business.
Major Payment Gateways in Australia
There have been many changes in the industry over the past few years. It is important to determine if the provider you choose is Australian owned or not as a lot of the providers have sold to foreign corporations.
- Merchant Warrior
- IP Payments (acquired by Bambora who was acquired by Ingenico who was acquired by Wordline keep up!)
- Pin Payments
What is a Payment Gateway?
To understand exactly what a Payment Gateway in Australia is capable of and determine whether you require a Payment Gateway in Australia it is important to differentiate between a Payment Gateway and a Third Party Processor.
The world’s largest Third Party Processor is PayPal. A Third Party Processor such as PayPal or Stripe does not require its merchants to obtain a merchant account and because of this there are certain advantages and disadvantages in this approach. If a merchant does not have to setup their merchant account they are able to start processing transactions much quicker and the initial costs may seem cheaper than utilizing a Payment Gateway in Australia. The downside is that Third Party Processors do not settle funds daily (there is often a delay) and the fees which are often higher. In the past having a direct merchant account and payment gateway setup would work out cheaper in the long run. However, as more payment gateways start offering ‘all-in-one’ solutions (merchant account and payment gateway bundled) there are providers that are able to compete directly with Banks and offer competitive rates.
A very simple way of understanding exactly what a Payment Gateway in Australia does is to imagine paying for fuel at a service station with your credit card. You place your credit card into a physical terminal and swipe it, the software on the terminal then processes the transaction on behalf of the service station and notifies the store attendant whether the transaction was successful or not. In an online payments scenario a Payment Gateway is the software that processes the transaction on behalf of the merchant.
Merchant Warrior is a local Australian Payment Gateway that aids merchants in establishing a merchant account and can offer merchants the flexibility of choosing a merchant account with a Bank, or provide an ‘all-in-one’ solution that bundles a merchant account and payment gateway at competitive rates. If you’re looking to establish a merchant account give Merchant Warrior a call – (07) 3166 5489.
Once you have established a merchant account you simply pass this information to a Payment Gateway in Australia and you will be able to accept payments online, receive daily settlements to a merchant account which is owned by yourself, receive reports and commonly enjoy low fees.
Due to the fast pace of the payments industry cost comparisons are not as simple as “A vs. B”. You need to understand the lingo that Banks and providers use in order to not be confused and end up paying more than you thought.
Firstly, you need to be aware of the different types of cost models:
- Blended Pricing
- Interchange Plus
- Cost Plus Plus
The above terms are used when discussing pricing for a merchant facility. Many third party processors such as PayPal or Stripe will bundle both a merchant facility and payment gateway into one offering and offer a “Blended” pricing model. It’s simple. You can start accepting payments for 2.4% + 30c or 1.75% + 30c (as an example). This pricing is often targeted towards small businesses and is a cost effective method for a small business to start accepting payments in the short term. A blended pricing model is a model that bundles all fees (interchange, gateway fees and scheme costs) into one – but more on this later.
A simple explanation of “Interchange” is the fee that the provider of your merchant facility has to pay an issuing bank (your customers Bank) for processing the transaction. VISA make their interchange fees publicly available in Australia they can be found here. As shown by the link depending on the type of credit or debit card used a different interchange fee applies (for example a corporate card has a different interchange fee compared to a standard card and so on).
So, Interchange Plus means interchange + (scheme fees and provider processing fees). Interchange Plus Plus means interchange + provider processing fees + scheme fees. Eg. You may receive interchange plus pricing of Interchange + 0.5% + your gateway fees. You may receive interchange plus plus pricing of Interchange + 0.5% + 10c (scheme fees) + your gateway fees.
Both Interchange+ and Interchange++ pricing models are very transparent with the fees being charged but can be difficult to reconcile. Merchant Warrior offers free rate reviews so if you have questions or are confused about quotes and want comparisons reach out to them.
3rd Party Processor vs. Payment Gateway
Paymate is an example of a third party processor. To view the difference in fee structures between a Third Party Processor and Payment Gateway in Australia we’ll review the cost of PayMate and Merchant Warrior a local Australian Payment Gateway.
The following information from www.paymate.com.au:
At the time of this writing: Transactions charged at 2.6% foreign currency payments incur an additional 2.75% as the funds are converted into AUD prior to being settled to the merchant.
Merchant Facility & Payment Gateway in Australia fees
At the time of this writing Merchant Warrior was charging the following for an online merchant account:
- Establishment: $0
- Monthly: $0
- Per Transaction Fee also known as Merchant Service Fee (MSF): 0.5%-1.5% (negotiable and depends on the industry and volume of your business)
At the time of this writing National Australia Bank was charging the following for an online merchant account (if using a third party payment gateway):
- Establishment: $0
- Monthly: $0
- Per Transaction Fee: Interchange + 0.74% (negotiable and depends on the industry and volume of your business) + $0.10
At the time of this writing the Australian Payment Gateway fees (Merchant Warrior):
- Establishment: $0
- Annual: $400
- Per Transaction Cost: between $0.04 and $0.45 depending on the number of transactions you are processing.
For the most cost effective option you will want to compare processor merchant fees (that include a merchant account and payment gateway) vs a payment gateway’s fees and a Bank’s merchant account fees.
The Best Payment Gateway in Australia?
Each of the Payment Gateways in Australia listed above have their strengths and weaknesses. Determining which Bank and which Payment Gateway is best suited for your business will depend solely on your business industry and the requirements of your online business. The Australian Bank Comparisons & Australian Payment Gateway Reviews can help you determine which Payment Gateway in Australia may be the best option for your needs.