Different ways to pay

Choosing a payment method

Normally we don't think much about the way we pay for things. But did you know you can be charged transaction fees for different types of payments? These fees can add up over time and make a dent in your savings.

So the next time you buy something, consider the payment options below.

Online payment options

Many businesses allow you to make payments online through your bank using 'Pay anyone' or BPAY. But there are now even more online payment methods available to you.

Online and mobile banking

Banking online or from your mobile phone or tablet is a convenient way to access your bank account if you want to pay bills, check your account balance or transfer funds. But there are some things you should consider before using online or mobile banking.

Instant payment with PayID

Gone are the days of waiting for your money to transfer between banks. With PayID, you can send and receive money immediately, without a BSB or account number.

Find out more about how PayID works.

Buy now pay later

Some retailers offer buy now pay later services like Afterpay, Certegy Ezi-Pay and zipPay, which allow you to order or buy a product immediately and delay payment or pay by instalments over time. These services may also be offered in-store via a mobile app.

Read more about how buy now pay later services work.

In-person payment methods

There are many options available for you to make a payment in person, including cash, EFTPOS, credit and cheque.

Use cash

Cash is usually the cheapest way to pay because you know exactly how much you have to hand over. With some other payment methods, you won't know the real cost until you get your statement from your bank.

However, accessing cash can be expensive. Your bank may charge a withdrawal fee at their branches or ATMs, and sometimes it can be more expensive to use another bank's ATM. Find out how many withdrawals you can make before you are charged a fee and how much that fee is.


Some banks charge you each time you make an EFTPOS transaction and this can add up to quite a lot over a year.

If you like the convenience of paying with EFTPOS, check that your transaction account is right for you. Although some banks don't charge anything for paying by EFTPOS, others may include it in the monthly account-keeping fee, or provide you with a set number of free transactions per month. For more information see transaction accounts.

EFTPOS chargeback

Selecting 'credit' rather than 'cheque' or 'savings' as the account type on an EFTPOS purchase may give you extra protection if you don't receive what you bought. You can ask your bank for a chargeback.

Pay by cheque

Depending on what the type of account you have, most banks will charge you for having a cheque account and paying by cheque. If you write a cheque for an amount that is more than you have in your bank account, your bank will probably charge you a dishonour fee.

Make sure you understand all the charges you could incur and keep a close eye on your account to make sure you always have enough money if you choose to pay by cheque.

Smart tip

Retailers who add a surcharge when you use a card must put up signs to let you know. Visit the ACCC for information about credit, debt and prepaid card surcharges

Pay by credit card

Using a credit card can be the most expensive way to pay because of high fees and interest rates. To find out more, see our information on how credit cards work and smart ways to use your credit card.

Tap and pay

Contactless payment technology allows you to pay for transactions under $100 by tapping or waving your card. For transactions over $100, you will also need to enter your card PIN on the merchant's terminal.

Pay by gift card

A gift card is a card loaded with an amount of cash that enables you (or the person you give it to) to buy goods and services. Treat gift cards like cash - you can't replace them if they are lost or stolen. Check the expiry date of the gift card and use it before it expires.

Use prepaid cards

Prepaid cards allow you to load a specific amount of money on a card and then use those funds wherever the card is accepted. Unlike gift cards, they can often be used where credit cards are accepted and are not limited to particular retailers.

Find out more about how prepaid cards work.

Pay by lay-by

While many shops offer buy now, pay later services in store, some may still offer the ability to lay-by your purchases. This is where you pay off an item over a certain period of time. Unlike buy now, pay later services, the shop keeps the item until you've paid it off completely.

This is a good way to pay if you can't afford the item right away because shops don't charge you any interest (although there may be some fees and often a deposit is required). Make sure you know what happens if you make some payments but decide you don't want to pay the rest off. You'll need to find out if you will get your money back.

For more information about the lay-by laws in your state or territory, contact your fair trading organisation:

Pros and cons of different payment methods

There are a number of things to consider before choosing a payment method. The table below outlines different types of payments and some of the pros and cons associated with each.

Payment method Pros Cons
Online and mobile banking
  • Payments are easy and fast
  • Easy to keep track of your spending
Instant bank transfers with PayID
  • Payment is usually made within seconds
  • Removes risk of entering the wrong bank account information when sending money
  • Can be unavailable due to system maintenance or technology issues
  • Could be vulnerable to banking and credit card scams
Buy now pay later services
  • Interest-free terms
  • Tells you how much you owe on each payment date
  • The refund process is the same as if you paid in full at time of purchase
  • Encourages impulse spending
  • A range of fees apply
  • Can lead you to take on more debt than you can afford
  • Immediate payment
  • No additional fees
  • Easy to keep track of your spending
  • Some businesses may not accept cash
  • Carrying large sums of cash can have a high risk of theft
  • Easy to use
  • Fast payment method
  • Payment processing fees can be high
Credit card
  • Accepted almost everywhere
  • Easy to keep track of your spending through your online banking or mobile app
  • Can lead to impulse spending
  • Payment processing fees can be high
  • May lead you to take on more debt than you can afford
Gift cards
  • Easy to give as a gift
  • Limits the amount of money you can spend
  • Can only be used in the store that issues the card
  • Can expire before you use it
  • Low risk of theft, as only the payee can cash the cheque
  • Money stays in your account until the payee banks the cheque, so you can stop payment if there's a problem
  • Not all businesses accept cheques
  • If there's not enough money in your account to cover the cheque, your bank will charge fees
  • Helps you avoid debt by paying for the item over time
  • Available in-store for high cost purchases
  • You can't take the item home until you've paid it off
  • If you cancel, you may lose the money you've already paid

Next time you pay for something, think about what you are being charged. If you like paying for things by EFTPOS or withdrawing money from an ATM in small amounts, make sure your account is giving you the best deal for making these transactions.

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Last updated: 26 Apr 2019