Credit Card Processing: 10 Things Aussie Business Owners Should Know

If you're running a business in Australia, you’ve probably already realised how important it is to accept credit card payments. From corner cafes to local online stores, credit card processing is a game-changer. But if you're not familiar with how it works, it can feel like a bit of a headache. Don’t worry – we're here to break it down for you, step by step.

In this article, we’ll walk you through everything you need to know about credit card processing, from how it works to picking the right payment processor, and the best ways to keep your transactions smooth, secure, and cost-effective.

What is Credit Card Processing?

At the simplest level, credit card processing is the system that lets your business accept payments from customers using credit cards. This involves a few different steps, including checking if the card is valid, verifying the customer’s account, and then transferring the money to your account.

When someone swipes, taps, or enters their card details, the payment goes through a series of steps – from your terminal to the customer’s bank and back to your merchant account. The whole thing happens pretty quickly – in the time it takes to say "thanks for your order!"

There are a few different types of cards you can accept – like credit, debit, and prepaid – but the processing method is generally the same. Whether you’re working in-store or online, knowing the ins and outs of credit card processing is a must.

10 Things Aussie Business Owners Should Know About Credit Card Processing in 2025

1. How Does Merchant Credit Card Processing Work?

The process of merchant credit card processing involves a few key players that work together behind the scenes. Here's a breakdown of the most important elements:

Payment Gateway: 

Think of this as the middleman. The payment gateway securely sends the credit card info from your customer to the payment processor. Whether you're taking payments online or in-store, the gateway makes sure everything's safe and secure.

Merchant Account: 

This is your special business bank account that holds the money from the payments you’ve received. After the payment is approved, the money temporarily sits here before being moved to your regular business account. It’s basically where all your transaction funds go first.

Payment Processor: 

This is the company that works with your bank to make sure that the money gets from the customer’s card to your merchant account. They're the ones responsible for making sure everything works smoothly.

All of these parts need to work together seamlessly to make sure that payments happen quickly and securely, whether you’re taking payments face-to-face or online.

2. Choosing the Right Payment Processor

Picking the right payment processor is one of the most important decisions you’ll make when setting up credit card processing. There’s a lot to think about – including cost, security, and features. Here's what you need to keep in mind:

Transaction Fees: 

Credit card processors usually charge a percentage of each transaction. Some go with flat rates, while others may have a tiered structure depending on the type of card or transaction or subscribed merchant fees. For example, international cards or rewards cards may cost more to process. Make sure you know what fees you’ll be up for, so there are no surprises down the track.

Payment Options: 

Ideally, you want a processor that supports a range of payment methods, from credit cards to mobile payments like Apple Pay or Google Pay. The more options your customers have, the more likely they are to complete their purchase.

Customer Support: 

You want to pick a processor with solid customer service – especially if you're new to this. Things can go wrong, and when they do, you want a provider who’ll sort it out for you quickly.

Security: 

Credit card payments come with a lot of responsibility, so make sure your payment processor meets the Payment Card Industry Data Security Standard (PCI-DSS). This ensures your customers' details are safe from hackers and other threats.

3. Understanding Credit Card Processing Fees

For many small businesses, one of the biggest headaches with credit card processing is the fees. It’s important to know exactly what you’ll be paying for. Here’s a quick rundown:

Transaction Fees: 

This is the fee you pay every time a customer uses a credit card to pay. Usually, this includes both a percentage of the transaction and a flat fee per payment (e.g., 2.5% + 25c per transaction). The fees can vary depending on the type of card being used.

Monthly Fees: 

Some payment processors charge a monthly fee to cover things like account maintenance, customer support, and access to the payment gateway. Be sure to check if this applies to your processor.

Setup Fees: 

Some providers charge a one-off setup fee to get you started. This could include getting your terminal up and running or helping you integrate the payment system into your online store. Make sure you check what’s included in any setup charges.

Chargeback Fees: 

If a customer disputes a charge, you’ll probably face a chargeback fee. Chargebacks can get expensive and, if they happen too often, can hurt your merchant account. Having a clear return/refund policy in place can help minimise these.

4. Keeping Payments Secure and Avoiding Fraud

When you’re processing credit card payments, security should always be a top priority. With more people shopping online, the risk of fraud and data breaches is higher than ever. Here are a few things to keep in mind:

PCI-DSS Compliance: 

The Payment Card Industry Data Security Standard (PCI-DSS) is a set of security guidelines that businesses must follow to protect customers' payment data. It’s required for anyone processing credit card payments, and if you’re not compliant, you could face hefty fines.

Encryption: 

This is the process of turning card information into a coded format so it’s unreadable to anyone who shouldn’t have access to it. Payment gateways and processors use encryption to keep your customers’ data safe during transactions.

Tokenisation: 

Tokenisation replaces sensitive card info with a unique code or "token". Even if someone gets access to this token, it’s useless without the decryption key. It adds another layer of security to keep payment data safe.

5. Payment Gateways: What to Look For

If you're running an online business, you’ll need a solid payment gateway. This is the tech that makes sure everything works smoothly when your customer enters their payment details. Here are some things to consider:

Easy Integration: 

The payment gateway needs to integrate well with your website or POS system. If you’re running an online store, it should work with your e-commerce platform and shopping cart.

Mobile Payments: 

Since more people are shopping on their phones, look for a gateway that supports mobile payment options like Apple Pay and Google Pay.

Fraud Prevention: 

Many payment gateways offer built-in tools to detect fraud, like address verification and CVV checks. Look for a provider that helps you protect both you and your customers from fraudulent transactions.

6. In-store vs. Online Credit Card Processing

Where you’re taking payments can affect how your processing works. If you have a physical shop, you’ll need a POS terminal to accept payments face-to-face. If you're online, you’ll need an e-commerce payment gateway. Here’s a quick comparison:

In-Store Processing: 

This involves using a POS terminal, where customers swipe, tap, or insert their card. It’s fast and secure, and in many cases, you can track customer data and manage your inventory as well.

Online Processing: 

When you sell online, credit card payments go through a payment gateway. It’s a little more complex because you need to ensure the website is secure and handle things like chargebacks. But it’s essential for any online store.

7. Tips to Reduce Credit Card Processing Costs

Credit card processing fees can add up quickly, but there are ways to keep costs down. Here are some tips:

Negotiate Fees: 

Don’t be afraid to haggle with your processor, especially if you’re processing high volumes. Some providers may offer discounts or more competitive rates.

Pick the Right Pricing Plan: 

Some processors offer flat-rate pricing, which makes things simple to understand. Others have tiered pricing, where fees change depending on the type of transaction. Work out which one works best for your business.

Encourage Cheaper Payment Methods: 

Debit cards and direct bank payments typically have lower processing fees. Offering discounts or incentives for using these options can help lower your costs.

Reduce Chargebacks: 

Make sure your return/refund policy is clear, and offer great customer service to minimise chargebacks.

8. Why Credit Card Processing Matters for Customer Experience

A smooth, secure payment process is key to keeping your customers happy. If customers can’t easily pay for their order, or if the process is slow and frustrating, they’re more likely to abandon their purchase.

Fast and Easy: 

The quicker the transaction, the better. Whether in-store or online, customers appreciate a hassle-free experience that gets them what they want without delays.

Multiple Payment Options: 

Offering a variety of payment methods (like contactless and mobile payments) gives customers flexibility and helps prevent cart abandonment.

Clear Receipts: 

Always provide customers with a clear receipt right after payment. It builds trust and gives them the info they need to track their purchase.

9. How Credit Card Processing and POS Systems Are Related

Credit card processing and POS systems go hand in hand, enabling seamless and secure transactions for businesses and customers. Here’s how they work together:

Payment Integration

Modern POS systems like POSApt are designed to integrate with credit card processors, allowing businesses to accept various payment methods, including debit cards, credit cards, and digital wallets like Apple Pay and Google Pay.

Faster Transactions

A well-integrated POS system ensures quick and smooth credit card processing, reducing checkout times and improving customer satisfaction. Contactless and mobile payment options further enhance transaction speed.

Security and Compliance

POS systems with secure payment gateways use encryption, tokenisation, and PCI compliance measures to protect customer payment data and reduce fraud risks.

Real-Time Reporting

By linking with credit card processors, POS systems provide real-time sales tracking, detailed POS transaction history, and financial insights to help businesses make informed decisions.

Multi-Channel Payments

A modern POS system allows businesses to process credit card payments not just in-store but also online, through mobile devices, and even for recurring billing, creating a seamless omnichannel experience.

As payment technology evolves, businesses that invest in a robust POS system with integrated credit card processing will stay ahead in providing efficient and secure transactions.

10. What’s Next for Credit Card Processing?

The world of payments is always evolving, so it’s worth keeping an eye on upcoming trends. Here are a couple to watch out for:

Mobile Payments: 

As more people use their phones to shop, mobile payment options like Apple Pay and Google Pay are becoming increasingly popular.

Contactless Payments: 

Tap-and-go payments are gaining traction, particularly for in-person transactions. It’s quicker, and customers love the convenience.

Cryptocurrency Payments: 

While still new, cryptocurrencies like Bitcoin are starting to be accepted by some businesses. While it's not widespread just yet, it’s an interesting trend to keep an eye on.

Essential for Businesses in Australia

Credit card processing is essential for most businesses in Australia. Understanding how it works, what fees to expect, and how to keep payments secure will help you provide a better customer experience and save on costs. Whether you're processing payments in-store or online, the key is choosing the right payment processor and staying on top of the latest trends.

By staying informed and selecting the best system for your business, you’ll be well on your way to growing your business and keeping your customers happy.