7 best payment systems for small business transactions in 2024

Key takeaways:

• Payment systems are systems that allow businesses to accept payments from customers.

• Payment systems can speed up purchase completion, reduce transaction costs, and simplify cross-border payments.

• The most comprehensive payment systems for big or small businesses should be cost-effective, fast, support multi-currency requirements and integrate well into existing tools and workflows.

For modern small businesses, cash is no longer king. This means having an  effective payment system has become essential for small businesses. The 2024 Global Payments Report notes that 49% of global transaction value will come from digital wallets,  improving the customer experience with quick purchases¹. In fact, FinTech Weekly found that embedded payments (one-click purchases in apps and on social media, for example) are projected to triple by 2026².

There are plenty of international payment platforms that can simplify transactions, improve consumer convenience, and drive growth. We compared the best payment systems for small businesses in Australia, analysing costs, scalability, and other features so you can choose the best one for your small business.

What are payment systems for small businesses?

Payment systems are tools that allow your business to accept monetary compensation in exchange for goods or services. They handle the transfer of money through payment processing and settle the payment by delivering the compensation to the destination account. Nowadays, modern payment systems also provide additional features like fraud protection and analytics, helping businesses to understand their customers’ buying habits.

There are many different types of payment systems, but it helps to look for end-to-end processing systems, also known as payment service providers (PSP), which cover all these tasks.

Modern fintechs like Airwallex (that’s us!) provide cost-effective solutions for cross-border payments, helping your small business grow into international markets. These are some key components that make up a payment processing system:

Payment gateway

A payment gateway is a tech service that securely transmits online payment data from a customer to a merchant. Payment gateways capture customer payment information and transmit it securely.

Payment gateways encrypt payment information and include tools to detect fraud. Once the payment gateway receives the transaction information, it sends the data to the payment processor for verification.

Payment processor

A payment processor is a tool that initiates and completes financial transactions. Once the payment gateway sends the data, the processor sends the information to the financial institution for approval. The processor will contact the relevant institution, depending on the payment method used (debit and credit cards, digital wallets, and virtual cards, bank transfers, etc).

The payment processor’s main goal is to ensure adequate funds in the customer’s account and to validate the payment. Once the request is approved, the processor notifies the customer’s bank to send the payment to the merchant bank.

Merchant acquirer

A merchant acquirer is a financial institution that helps small businesses process payments. The acquirer manages the merchant’s bank account and authorises transactions. It also handles transaction issues, including chargebacks, fraud, and payment disputes.

Top payment systems features to look for

There are several payment systems, but they’re not all the same. Think about the types of payments you want to accept and assess the system’s full suite of offerings to find the best one for your small business.

When choosing a payment system, here’s what you should consider:

• Costs: Consider any additional costs, including account, foreign exchange, foreign transaction, and transfer fees

• Implementation speed: Consider how long it takes to get started and how easy it is to integrate with existing tools

• Scalability: Assess whether it provides comprehensive solutions for end-to-end financial operations, including payment acceptance, expense management, multi-currency cards, and API integrations

• Data security: Determine whether it meets compliance regulations and properly encrypts data

• User experience: Choose a system that’s intuitive and doesn’t require opening several new screens to make payments

7 best small business payment systems in Australia

Here are the best online payment systems for small businesses in Australia, including ourselves, and how we stack up in terms of features, scalability, and speed.

• Airwallex: an all-in-one fintech platform for financial operations

• Shopify: an eCommerce platform with built-in payment systems

• Stripe: a payment system with business management tools and eCommerce integrations

• Square: a plug-and-play payment system with accounting integrations

• Adyen: a payment platform for online and in-person payments

• Clover: a Point of Sale (POS) system with built-in payment and commerce features

• PayPal: a digital payment system with individual and business capabilities

For small businesses, costs are often top of mind. Find the best payment system for your needs with this breakdown of costs and fees:

Airwallex 

• Key Features: Global payment acceptance, multi-currency accounts, FX and transfers, Yield (our high-rate business saver), multi-currency cards, expense management, and more!

• Cost: 1.65%–3.4% +A$0.30 per transaction

Airwallex is a global solution that helps your business grow without borders. It offers no-code to fully-customisable payment integrations, including Checkout solutions, Payment Links, and Payment Plugins that work with eCommerce platforms like Shopify, Magento, and WooCommerce. Not only does it offer simplified payment processing for small businesses, it also provides a suite of services that make handling transactions easier.

Airwallex Payments are integrated with our Global Accounts, which lets you accept payments in multiple currencies from international customers without forced currency conversions. You can then use the same balances to pay international suppliers, saving on unnecessary foreign exchange fees.

As an end-to-end financial solutions platform, we can help you stay on top of your small business costs with added features such as our Expense Management, multi-currency corporate and employee cards, and Bill Pay. Use these features to manage and track business expenses.

Shopify

• Key features: Multiple payment methods, third-party payment gateway integration, payment analytics

• Cost: 1.4%–1.75% + AU $0.30 per transaction³

Shopify is a payment system that lets businesses accept different types of payments, like credit cards and digital wallets. Businesses that use the Shopify platform automatically get Shopify Payments. This seamless integration creates a streamlined checkout process, which can lead to a better customer experience. Using Shopify Payments, it’s easy to manage your sales, payments, and payouts all within one simple dashboard.

The Airwallex Payment Plugin integrates with Shopify to give you a wider reach than just using Shopify alone. This plugin offers multi-currency support for businesses with a global customer base. Using the plugin, you can accept payments in multiple currencies and hold funds in different currencies, reducing the impact of exchange rate fluctuations.

Like most payment systems, Shopify offers peace of mind with PCI-compliant servers, encrypted data, and secure checkouts for all payment transactions. Businesses will enjoy the convenience of accepting multiple payment methods, although the coverage may not be as wide as other providers.

Setup is instant, so you can start processing payments immediately after creating your account. Shopify Payments offers several different pricing tiers to meet the budget needs of small businesses. Basic analytics and reporting offer insights into transactions and cash flow.

Stripe

• Key features: Offline payments, mobile payments, fraud prevention, global payments

• Cost: no monthly fee; 1.7%–3.5% plus $0.30 per transaction.⁴

Stripe is a global payment system that's well known for its wide usage across payments acceptance, managing subscriptions, and handling online transactions. It offers support for payments in more than 135 currencies and has regulatory licences worldwide for compliance in most countries.

The robust tool offers over 400 integrations, so businesses can build custom integrations with existing tools. Built-in reporting tools offer insights into company transactions and cashflows for simplified budgeting. Overall, Stripe provides comprehensive payment processing with a wide range of features and developer tools. But, Airwallex may be better suited to you if you’re also looking for robust cross-border solutions, such as competitive FX and transfers.

Square

• Key features: Offline payments, payment dispute management, POS systems

• Cost: No monthly fee; 2.2% per online transaction; 1.6% per in-person transaction⁵

Square is a payment processing system that lets businesses accept both online and in-person payments. In addition to handling transactions, it handles payment disputes on your behalf, and like many others, has active fraud prevention measures to protect your business.

While you can accept foreign transactions, Square doesn't offer multi-currency support. Meaning that if you receive payments from your customers in a different currency than yours, Square will charge you a foreign exchange fee to settle in your home currency.

Like other providers, Square can offer you Payment Card Industry Data Security Standard (PCI) compliance and 3D secure verification. If someone makes a payment and your servers are offline, Square will automatically process the transaction when you get things back online within 24 hours.

Adyen

• Key features: Global payments, cross-channel insights

• Cost: Processing fee of €$0.11 plus payment method fee⁶

Adyen offers end-to-end payment support for small businesses with both online and in-person transactions. While the tool is relatively easy to navigate, it doesn’t have small business features like onboarding tools or invoicing.

Similar to Airwallex, Adyen offers various payment methods, including Pay by Link, in-app, and recurring payments. Similarly, it has three checkout integration options that lets you choose from a completely customised framework, drop-in elements for easy payment page building, and components for a simplified approach. Unlike Airwallex, Adyen doesn’t offer multi-currency wallets.

Clover 

• Key features: POS hardware and software, custom integrations

• Cost: Monthly fees start at A$13; processing fees start at 2.3% plus A$0.10 per transaction⁷

Clover specialises in customised POS software and hardware to support in-person payments and inventory management. Its range of hardware and software solutions includes POS terminals and mobile payment devices. It also offers business management tools, including employee management, customer loyalty programs, and reporting.

Like other payment system offerings, Clover also offers integrations with eCommerce platforms, making it easy for sellers to track payments. Built-in developer tools also make it easy for small businesses to integrate custom-built websites. While useful, it’s not as robust as Airwallex, which is stronger in online payments and has a higher global reach.

PayPal 

• Key features: Invoicing, manual billing, eCommerce integrations, online checkout

• Cost: 2.6% plus fixed fee per transaction (international transactions incur a 1% add-on fee)⁸

PayPal is a payment system that helps process transactions using various payment methods, including PayPal, credit cards, and debit cards. Small businesses typically use PayPal to collect payments even if they don’t have a website or a payment page.

Similar to Airwallex, small businesses can easily send invoices with QR payment codes, and payment links that you can share on social platforms. The site also allows manual payments to handle sales placed over the phone and via email. Paypal offers additional tools, including working capital loans and business financing options. Airwallex, on the other hand, offers additional services like virtual cards and expense management to streamline financial operations.

Business benefits of a powerful payment processing system

Using payment processing services offers many benefits, whether you’re just starting out or you’re a small business with years of experience. Here are the benefits of a strong payment system:

Enhanced security

• Fraud protection: Advanced security measures, such as encryption, tokenization, and multi-factor authentication, help protect sensitive financial information and reduce the risk of fraud.

• Compliance: Ensures compliance with industry standards like PCI-DSS, which is crucial for maintaining customer trust and avoiding penalties.

Improved customer experience

• Seamless transactions: Provides a smooth and efficient checkout process, reducing cart abandonment and increasing customer satisfaction.

• Multiple payment options: Supports a variety of payment methods, including credit cards, debit cards, digital wallets, and bank transfers, catering to diverse customer preferences.

Increased efficiency

• Automated processes: Automates tasks like invoicing, recurring billing, and payment reconciliation, saving time and reducing manual errors.

• Real-time reporting: Offers real-time transaction data and analytics, enabling businesses to make informed decisions quickly.

Global reach

• Multi-currency support: Facilitates transactions in multiple currencies, making it easier for businesses to expand into international markets. It lets you accept payments from customers in the locales you operate and to collect and settle foreign currencies with multi-currency accounts.

• Cross-Border payments: Simplifies the process of accepting and making payments across borders, opening up new revenue streams.

Cost savings:

• Competitive rates: Often provide competitive domestic and foreign transaction fees and exchange rates, helping businesses save on payment processing costs.

• Reduced operational costs: Automation and streamlined processes can lead to lower operational costs and increased profitability.

Scalability

• Flexible solutions: Scales with the business, accommodating growth and increased transaction volumes without requiring significant changes to the system.

• Integration capabilities: Easily integrates with other business systems, such as accounting software, CRM, and ERP, ensuring a cohesive operational environment.

Grow your business with our next-generation payment system

As a small business, it’s important to choose a payment system that can grow with your business. Having one end-to-end financial operations platform cuts down on the time and cost involved in managing fragmented systems.

Airwallex is an Aussie-born business, yet we also have an extensive global network that empowers you to accept payments in 180+ countries via local payment methods, with competitive processing fees for both domestic and international payments. No-code and low-code options make it easy to accept payments across your social media platforms, website, or eCommerce platform.

As an end-to-end financial operations system, Airwallex's platform also offers Business Accounts and Spend Management tools. It really is a one-stop shop for business finances.

Payment systems for small businesses: frequently asked questions

What is the best payment system for a small business?

The best payment system for your small business will depend on your unique needs. We encourage you to do your research to find the system that fits your goals and requirements. Our platform, Airwallex, offers small businesses the most comprehensive, end-to-end financial operations system with global reach. We offer multi-currency accounts that make it quicker and more cost-efficient to help you accept, hold, and make payments internationally.

How can small businesses take card payments?

Small businesses need a merchant account and payment processing service to process digital payments, like card payments. You’ll also need a payment gateway to initiate and verify ‌transactions.

How do you set up an online payment system for a small business?

To set up an online payment system for your small business, partner with a payment system provider for end-to-end support. Make sure the provider you choose includes a merchant account, payment gateway, and payment processor. If you plan on accepting payments online on your website, build a payment form or payment page, and ensure that your provider meets compliance regulations.

Sources:

1. https://worldpay.globalpaymentsreport.com/en

2. https://www.fintechweekly.com/magazine/articles/the-growing-foothold-of-embedded-payments

3. https://www.shopify.com/au/payments

4. https://stripe.com/au/payments

5. https://squareup.com/au/en/payments

6. https://www.adyen.com/en_AU/

7. https://www.clover.com/

8. https://www.paypal.com/au/business/accept-payments

Disclaimer: The information in this article is based on our own online research. Airwallex was not able to manually test each tool or provider. The information is provided for educational purposes only and a reader should consider the specific requirements of their business when evaluating providers. This research is reviewed annually. If you would like to request an update, feel free to contact us at [[email protected]].

This information doesn’t take into account your objectives, financial situation, or needs. If you are a customer of Airwallex Pty Ltd (AFSL No. 487221) read the Product Disclosure Statement (PDS) for the Direct Services available here.