Ten online payment methods – which one gets your vote?

How will your business accept online payments in the future? Do you think a mobile wallet like Visa Checkout or Apple Pay will be the market leader, or does a method like PayPal, Bitcoin or escrow payments take your fancy? Find out how the different methods can benefit your business and remember to vote on which method you are most likely to adopt in the future. Vote now!

Buying something online no longer means having to stretch for your wallets or bank cards. Payment technology is moving at an incredible pace, and merchants and consumers can now choose from a vast array of different payment offerings, from mobile wallets to virtual currencies like Bitcoin. We take a look at some of the newest payment offerings available to merchants and how these can help your business.


Visa Checkout

Visa’s online wallet, Visa Checkout, is aimed at making it easier for customers to make a purchase online, by issuing a single sign-in when they see the Visa Checkout button. Users register once and they can then make transactions across a variety of devices.

In Australia, brands already using Visa Checkout include Event Cinemas, DealsDirect, Bonds, Pizza Hut and CatchOfTheDay.

Visa Checkout claims it can help to increase conversions through a streamlined checkout process and can also help to reduce fraud, thanks to device fingerprinting and step-up authentication, which authenticate consumers before they make a purchase.

According to a comScore white paper commissioned by Visa Checkout, enrolled Visa Checkout customers had a 69 per cent conversion rate. Plus, there was a 66 per cent higher conversion rate for enrolled Visa Checkout customers compared with traditional checkout customers and a 7 per cent higher average transaction size for Visa Checkout orders than non-Visa Checkout orders among retail and travel sites surveyed.

The study also showed that enrolled Visa Checkout customers completed transactions 22 per cent faster (3.2 minutes) compared with traditional checkout customers (4.1 minutes).


Like Visa Checkout, MasterCard’s virtual wallet offering, MasterPass, promises customers a more convenient way to pay online and better conversion rates for merchants. Payment and shipping information is stored in one place, and MasterPass customers can use the service online wherever they see the MasterPass logo.

MasterPass allows customers to pay with a credit, debit or prepaid card from MasterCard, American Express, Diners Club International and Visa, and there are no fees for customers using the service.

Express Checkout

American Express has joined Visa and MasterCard by creating its own mobile wallet, Express Checkout. To use the service, customers simply need an email and password, and it promises greater security and faster checkout experiences.

Like Visa Checkout and MasterPass, Express Checkout aims to lower cart abandonment, increase customer loyalty and lower fraud – at no incremental cost to merchants’ businesses.

Anyone who has a MasterCard, Visa or American Express credit, charge or debit card issued in Australia can create an Express Checkout account.

Apple Pay

When Apple launches a new product or service, the world sits up and listens. And that’s exactly what happened last October when Apple Pay was revealed.

This mobile wallet service provides a secure and private way to pay for goods and services in iOS apps. It can also be used to pay for goods and services in physical shops and outlets that accept the contactless technology. The service works by users touching their Touch ID, which then provides all their payment and shipping information to the checkout.

In addition to the iPhone 6, iPad Air 2, and iPad mini 3, Apple Pay is also available on the Apple Watch.

Apple claims that Apple Pay is a safer way to pay, as users never hand over credit or debit cards and all payment information is assigned, encrypted and securely stored in the Secure Element, a dedicated chip in the iPhone, iPad and Apple Watch.

When a user makes a purchase, the Device Account Number, along with a transaction-specific dynamic security code, is used to process the payment.

Alternate payment options

China UnionPay

China UnionPay is now the world’s largest bank-card settlement organisation, according to a recent Nilson Report showing UnionPay had, for the first time, exceeded Visa in terms of global transaction volume, in the first quarter of 2015.

UnionPay was established in March 2002 by the People’s Bank of China and the State Council and is the most widely accepted card in China. It has grown rapidly internationally in recent years, fuelled by Chinese consumers increasingly travelling and studying abroad, and is now accepted in 150 countries and territories. Plus, 65 institutions in 17 overseas countries and regions have issued more than 10 million UnionPay cards locally. In Australia, Australia Post issues Load&Go China travel cards.

According to the Commonwealth Bank, in 2013 there were 4.2 billon UnionPay cardholders globally – or 50.6 per cent of all cards in circulation that year. It adds that UnionPay now accounts for 33 per cent of all card transactions worldwide, and the average UnionPay transaction is much higher than other global cards.

UnionPay is set to become more widely accepted in Australia as the country’s ties with China continue to strengthen. Tourism Research Australia’s International Visitor Survey for 2014 showed that tourist numbers from China surged 18 per cent to 784,000 arrivals, spending $5.7 billion. And that spending figure is set to double by 2020.


Alipay is a third-party online payment platform that was launched in China in 2004 by the Alibaba Group and its flamboyant founder Jack Ma. It has more than 350 million registered users and facilitates around 8.5 million transactions every day.

Alipay is a particularly good way for international merchants to gain access to the fast-growing Chinese online market, because it allows online merchants to receive payments from Chinese buyers in RMB and it is also strong on mobile, which is the preferred platform for millions of Chinese consumers.

Recently, Alipay launched a charm offensive for US-based retailers and has already attracted the likes of Macy’s and Saks Fifth Avenue.

Alipay works by collecting payment from customers in RMB and then transfers the payment to merchants in 12 foreign currencies (USD, EUR, JPY, GBP, CAD, AUD, SGD, CHF, SEK, DKK, NOK, HKD), based on a spot rate of settlement at that time.

Given it works with more than 65 financial institutions, Alipay can remit payments directly to a merchant’s bank account, meaning merchants do not need to set up a business or bank account in China.

POLi Payments

POLi Payments, a business of Australia Post, is a real-time online debit payment method that is an alternative to PayPal, BPAY and credit cards.

POLi works by allowing customers to pay via internet banking (to which 95 per cent of Australians have access), which makes it more cost-effective than many other payment methods.

There are many benefits for businesses using POLi, including instant payment notifications and easier reconciliation, as business owners can simply check their bank statement against their POLi report. Also, businesses only pay a 1 per cent transaction fee, which is capped at $3 plus GST, plus they are only charged for completed transactions and there is no ongoing obligation.

There are a number of different POLi options:

  • POLi Checkout, which allows businesses to accept internet banking payments at checkout. This is simply integrated via an API.
  • POLi Bill Pay, which allows businesses to create short URLs that can be sent via email or embedded into invoices. These ensure that payment will be for the correct amount and have the correct reference.
  • A POLi add-on for Xero, which enables Xero customers to pay invoices via their internet banking – POLi populates the payment details and updates Xero as soon as the payment is complete.
  • POLi also offers reduced rates for not-for-profit organisations, to allow them to accept donations on their websites or via a Facebook donation app.


PayPal is one of the most widely known online payment solutions in the world and allows consumers to pay online using their PayPal account balances, bank accounts or credit cards.

PayPal was founded in 1998 and has been active in Australia since 2005. There are 152 million active PayPal accounts in 100 currencies across 203 markets, processing 9.3 million payments daily. In Australia, there are 5.6 million active consumer PayPal accounts and 110,000 merchant partners.

Its global reach allows Australian businesses to transact locally and internationally and to hold balances in their PayPal accounts in 26 different currencies.

PayPal says that its top category in Australia is electronics, and it counts the likes of JB Hi-Fi, Kogan, DealsDirect,, Dick Smith, Logitech and Bing Lee among its merchants.

Its second most popular category in Australia is fashion, with retailers such as Sportsgirl, Alannah Hill, Country Road, SurfStitch, Peter Alexander, General Pants, eBay, PeepToe shoes, ASOS, Topshop and Etsy working with PayPal.

In recent years, PayPal has increasingly turned its focus to mobile payment solutions. In 2014, PayPal processed $46 billion in mobile payments – up almost 68 per cent on 2013. One in three PayPal Australia transactions now takes place on a mobile device.



Bitcoin is undoubtedly the world’s most well-known virtual currency, which means it is a payment system that is created and held electronically. Bitcoin was really the first cryptocurrency to garner mainstream attention, but even its creator Satoshi Nakamoto has admitted it is tricky getting your head around the concept of a virtual currency.

Essentially, unlike physical currencies, Bitcoin is decentralised and is not linked to any banks. Instead, Bitcoin is created digitally by a community, which anyone can join. This community “mines” bitcoins using a digital distributed network.

Only 21 million bitcoins can ever be created, but the coins can be divided into smaller parts.

This network also process transactions made with the virtual currency, which makes Bitcoin its own payment network.

While it remains to be seen whether virtual currencies will ever gain mainstream traction as a payment method of choice, some big name merchants, such as Expedia, have moved to start accepting Bitcoin for transactions.

Escrow payments

Escrow payments link payment with the delivery of goods. This helps to give customers more confidence when buying online, as their payment is only processed once they receive a delivery from the merchant.

An example is Australia Post’s PostPay, which ensures that payment is only released when a parcel is delivered and signed for.

If a merchant offers PostPay as a payment option, customers simply need to select it as their payment method when they are checking out in an online store.

PostPay works with Australia Post’s eParcel service for sending regular and Express Post parcels within Australia.

In addition to offering customers more peace of mind around payment and delivery, other benefits include less fraud, the ability to receive proof of delivery and no sign-up fees

Related articles

How secure online donations are supporting Melbourne’s disadvantaged How secure online donations are supporting Melbourne’s disadvantaged
Prahran Mission provides emergency relief and rehabilitation services to people experiencing mental illness, poverty, homelessness and economic disadvantage. We …
Tackling homelessness in Melbourne: a Q&A with Launch Housing Tackling homelessness in Melbourne: a Q&A with Launch Housing
From a lack of affordable housing to war veteran PTSD, there are many reasons for Australia’s homelessness crisis. We …
Funding your business, part 2: Growing with Government grants Funding your business, part 2: Growing with Government grants
Growth funding needn’t only come from private investors. The Australian Government, particularly since its Innovation Agenda announcement, can also …
Do you need insurance for your online business? Do you need insurance for your online business?
There are many potential losses to online businesses, from damage to stock to having your data hacked. We look …

Sign up to our newsletter

Online payments
just got easier