Online Payments for Australian Small Businesses: Stripe vs Square vs PayPal

Online payments in Australia have never been more accessible — but choosing the wrong platform costs real money. Whether you're a tradie sending invoices from the job site, a retailer taking in-person and online payments, or a professional services firm billing monthly retainers, the platform you choose affects your cash flow, your fees bill, and your customer experience.

This guide covers every major online payment option available to Australian small businesses in 2025, with real fee comparisons, use-case matching, and the GST implications most business owners overlook. The short answer: Stripe wins for online-first businesses, Square wins for businesses that need hardware, and PayPal is rarely the best choice for new setups — but the details matter enormously.

Why Online Payments Matter for Australian Small Businesses

Australia has one of the highest rates of card and digital payment adoption in the world. According to the Reserve Bank of Australia's 2023 Consumer Payments Survey, cash now accounts for less than 13% of consumer payments by number — down from over 60% in 2010. Your customers expect to pay digitally, and businesses that remain cash-only or invoice-only are increasingly leaving money on the table.

The ABS's 2022-23 Business Characteristics Survey found that approximately 35% of Australian small businesses still had no website or online presence. Of those that did have a website, a large proportion had no payment functionality at all. This is a significant competitive disadvantage: businesses that can accept payment at the moment a customer decides to buy — online, on mobile, or at the door — convert at dramatically higher rates than those who send a bank transfer request later.

For tradies specifically, the move to tap-to-pay via phone has transformed on-site payment collection. A plumber or electrician who can tap and receive payment the moment a job is done gets paid faster and faces far fewer "I'll transfer it later" situations.

Platform-by-Platform Breakdown

Stripe

Stripe is the developer's choice that has become accessible to everyone. It launched in Australia in 2013 and has become the dominant payment infrastructure for online businesses, SaaS companies, and increasingly, professional service firms. Stripe's key strength is its flexibility: you can embed a payment form on your website, send a payment link via SMS or email, create recurring billing, issue invoices, and build sophisticated payment flows — all from one account.

For Australian small businesses, Stripe's standout features are:

• Stripe Invoicing: Send professional invoices with a "Pay Now" button directly built in. Customers can pay by card, BPAY, or direct debit. Free for up to 25 invoices per month.
• Payment Links: Create a shareable payment URL in under a minute — no website required. Useful for tradies who want to text a payment link after completing a job.
• Stripe Terminal: Physical card readers that connect to Stripe, allowing in-person payments through the same dashboard as online payments. Hardware costs from ~$399 AUD.
• Payouts: Funds settle to your Australian bank account in 2 business days by default (faster with Instant Payouts for a 1% fee).

Stripe does not natively support Afterpay or Zip as checkout options (unlike some competitors), though third-party integrations exist. It also doesn't offer a walk-up hardware solution as seamlessly as Square.

Square

Square launched in Australia in 2016 and has built a strong presence particularly among retail, hospitality, and mobile service businesses. Square's defining advantage is its unified hardware-and-software ecosystem: the free Square Reader (a small Bluetooth card reader) lets any iPhone or Android become a payment terminal within minutes of signing up.

Square's key features for Australian businesses:

• Free card reader on sign-up: Square sends a free magstripe/contactless reader to new Australian accounts. A more capable Bluetooth reader is available for ~$59 AUD, and a full POS stand for retail is available from ~$599.
• Square Point of Sale (POS): A full inventory management, staff management, and reporting system built into the free Square app. Particularly well-suited to cafes, retail shops, and markets.
• Square Invoices: Similar to Stripe's invoicing product — send invoices with card payment links built in. Free tier available.
• Afterpay integration: Square now supports Afterpay at checkout (both in-person and online), which Stripe does not offer natively.
• Payouts: Standard next-business-day payouts to Australian bank accounts.

Square's weakness is its fee structure for high-volume businesses — the flat 1.9% rate is competitive at low volumes but doesn't offer volume discounts the way Stripe can (via custom pricing at scale).

PayPal

PayPal was the original online payment platform for Australian small businesses and still has strong brand recognition, particularly among older consumers. However, for new business setups in 2025, PayPal is rarely the optimal choice. Its fees are higher than Stripe and Square, its checkout experience is dated, and its dispute resolution process heavily favours buyers over sellers.

PayPal remains relevant in specific contexts:

• Businesses selling on eBay or Facebook Marketplace (PayPal is deeply integrated)
• Businesses whose customers are over 55 and trust the PayPal brand
• International transactions where PayPal's currency conversion can be convenient

PayPal's domestic transaction fee in Australia is 2.6% + $0.30 for card payments — higher than both Stripe (1.7% + $0.30) and Square (1.9% flat). For a business processing $50,000 per year, that's approximately $450 more in fees annually compared to Stripe.

Tyro

Tyro is an Australian fintech company founded in 2003 and is the most significant Australia-only payment provider on this list. Tyro's core product is its EFTPOS terminal hardware, which is popular with medical practices, hospitality venues, and retail businesses that do high transaction volumes. Tyro integrates directly with many Australian-specific POS systems including Kounta, Deputy, and medical practice management software.

Key Tyro characteristics:

• Integrated EFTPOS: Tyro terminals can integrate with your POS system so transactions are automatically matched, reducing reconciliation time significantly.
• Surcharging: Tyro makes it easy to pass card surcharges on to customers, which is common practice in Australian hospitality and medical settings.
• Medicare and HICAPS integration: Tyro's terminals support Medicare and health fund claiming, making it essential for medical, dental, and allied health businesses.
• Pricing: Tyro quotes custom rates based on monthly turnover. Entry-level rates typically start around 1.4% for domestic Visa/Mastercard, making it competitive at higher volumes.

Tyro requires a minimum monthly volume to be cost-effective and is not suitable for very small businesses or those who primarily transact online.

Till Payments

Till Payments (formerly Paydock) is an Australian payment orchestration platform that is particularly popular with businesses needing to route transactions across multiple payment providers. It's more relevant for mid-sized businesses with complex needs than for typical small businesses. Pricing is custom and typically involves a monthly platform fee plus per-transaction costs. For most small businesses, Stripe or Square will be a simpler and more cost-effective choice.

B2BPay

B2BPay is an Australian-founded payment service designed specifically for business-to-business invoice payments — and it works differently from every other platform on this list. Instead of the seller paying the card processing fee, B2BPay's model passes the surcharge to the payer. You send a payment link on any invoice; the buyer pays by card and covers the processing cost; you receive the full invoice amount.

This makes B2BPay a meaningful alternative to Stripe and Square for Australian trade businesses and professional services firms that primarily invoice clients on terms but want to offer card payment without absorbing the fee. An electrician invoicing a construction company for $4,800 doesn't want to lose $80 in card fees. B2BPay solves that specific problem.

Key B2BPay characteristics:

• Surcharge passed to buyer: The card processing fee (typically 1.5–2.5% depending on card type) is added to the buyer's payment, so you receive the full invoice amount. This is legal in Australia under ASIC's surcharging rules, provided the surcharge reflects the actual cost of processing.
• Xero and MYOB integration: B2BPay integrates with both accounting platforms, allowing you to embed a "Pay by card" link directly in your Xero or MYOB invoice. Reconciliation is automatic when the client pays.
• No monthly subscription: B2BPay operates on a pay-per-use model. For businesses that invoice sporadically — a builder invoicing at project milestones, for instance — this is more cost-effective than maintaining a Stripe account with a monthly card reader subscription.
• ABN-linked setup: B2BPay is built around Australian business structures. Setup requires your ABN, and the platform is designed to be compatible with ATO reporting requirements.
• Not an e-commerce gateway: B2BPay won't replace Stripe or Square for a retail website or booking system. Its specific strength is the invoice payment workflow — suitable for B2B trade, consulting, and professional services rather than direct-to-consumer retail.

B2BPay sits alongside rather than competing with Stripe or Square for most businesses. A plumber might use Square for on-the-spot card payments at a job and B2BPay for invoicing commercial clients who prefer to pay by card. Fees vary by plan — verify current pricing at b2bpay.com.au before committing.

Fee Comparison Table

All fees in AUD. Correct as of early 2025 — always verify current pricing directly with each provider before making a decision.

Platform	Setup Cost	Monthly Fee	Domestic Card	Intl Card	AMEX	Payout Timing
Stripe	$0	$0	1.7% + $0.30	3.5% + $0.30	2.2% + $0.30	2 business days
Square	$0 (free reader)	$0	1.9% flat	1.9% flat	1.9% flat	Next business day
PayPal	$0	$0	2.6% + $0.30	3.6% + $0.30	3.6% + $0.30	Instant to PayPal, 1-3 days to bank
Tyro	Terminal rental/purchase	From ~$29	From ~1.4%	Varies	Varies	Next business day
Till Payments	Custom	Custom	Custom	Custom	Custom	Custom
B2BPay	$0	$0	Surcharge to payer (~1.5–2.5%)	Surcharge to payer	Surcharge to payer	1–3 business days

Note: Square charges the same 1.9% for domestic and international cards, which makes it particularly advantageous for businesses with international customers. Stripe's international card surcharge is significant if you regularly charge overseas clients.

Head-to-Head Comparisons: Stripe vs Square vs PayPal vs B2BPay

Stripe vs Square Australia

This is the most common comparison for Australian small businesses, and the answer is mostly about your business model rather than fees. Both are excellent platforms — the 0.2% fee difference (Stripe 1.7% vs Square 1.9% for domestic cards online) is immaterial for most small businesses.

Choose Stripe if: You primarily transact online, issue invoices electronically, need to embed a payment form on your website, or want recurring billing for subscriptions. Stripe's online checkout experience is slightly smoother, and its integration with Xero, MYOB, and accounting tools is more flexible.

Choose Square if: You regularly take payment in person — at a job site, a market stall, a retail counter, or a client's location. The free Square Reader tap-to-pay hardware is genuinely excellent, and Square's flat 1.9% rate for all card types (including international Visa/Mastercard) makes it predictable. Square also offers a better free point-of-sale app for businesses that need inventory tracking.

Can you use both? Yes, and many Australian businesses do. A tradie might use Square Reader at job sites and Stripe Invoicing for commercial clients who pay online. There's no contract or exclusivity requirement with either platform.

Stripe vs PayPal Australia

For Australian businesses setting up online payments from scratch, Stripe is almost always the better choice over PayPal. PayPal charges 2.6% + $0.30 per transaction versus Stripe's 1.7% + $0.30 — on a $1,000 transaction, that's a difference of $9 per transaction. PayPal also holds funds in new accounts for up to 21 days, which creates genuine cash flow friction.

PayPal's advantage is familiarity: many older demographics and B2B customers feel more comfortable paying via PayPal because they've used it for years. If your customer base skews 50+ or you're selling to businesses that already have PayPal accounts set up, PayPal checkout as a secondary option (alongside Stripe as primary) can increase conversions. eBay and certain marketplaces also mandate PayPal.

B2BPay vs Stripe Australia

B2BPay and Stripe solve different problems. Stripe is an all-purpose payment gateway where you (the business) pay the processing fee. B2BPay is a B2B invoice payment platform where the card processing fee is passed to the customer (the payer), meaning you receive your full invoice amount.

If your business regularly invoices other businesses — trade accounts, commercial clients, consulting retainers — B2BPay's fee-passing model can be significantly better than Stripe. A $5,000 invoice processed through Stripe costs you approximately $85 in fees; through B2BPay, your client pays the surcharge and you receive $5,000. This is legal in Australia under ASIC surcharging rules, provided the surcharge reflects the actual processing cost.

B2BPay is not suitable for consumer-facing retail or e-commerce. Consumers expect you to absorb card fees; passing surcharges to retail customers (while legal) damages conversion and trust.

B2BPay vs PayPal Australia

For B2B invoice payment, B2BPay is the stronger choice. PayPal's 21-day hold on new accounts is particularly damaging for cash-flow-sensitive businesses, and PayPal's B2B invoice tools are less polished than B2BPay's Xero/MYOB integration. B2BPay's surcharge-to-payer model also means you retain more of each invoice amount on large transactions. PayPal wins only on name recognition — some older clients feel more comfortable with a PayPal payment link than an unfamiliar platform.

Alternatives to Stripe and Square in Australia

If neither Stripe nor Square fits your situation, the meaningful Australian alternatives are:

• Tyro — the best fit for hospitality and retail businesses needing EFTPOS integration with Australian POS systems (Lightspeed, Impos, Oracle). Competitive rates for high-volume merchants but not suitable for occasional payments or invoice-based businesses.
• B2BPay — the right choice when you invoice other businesses and want to pass card fees to the payer.
• Pin Payments — an Australian-founded gateway (now owned by Till Payments) that supports card payments, direct debit, and recurring billing. A genuine Stripe alternative for businesses that prefer to work with an Australian company.
• eWAY — an established Australian gateway used by many local e-commerce sites, particularly those on Magento or custom PHP platforms. Integration documentation is strong for Australian developers.

Use Case Matching: Which Platform for Which Business?

Tradies (Plumbers, Electricians, Builders, Painters)

For tradies, the best payment setup in 2025 is typically Square as the primary in-person solution combined with either Square Invoices or Stripe Invoices for sending invoices to commercial clients.

The Square Reader is ideal for tradies because:

• It's free to get started — no hardware cost barrier
• The Square app works seamlessly on any iPhone or Android
• Customers can tap their card or phone on the reader the moment the job is done
• Square's invoice feature lets you send a professional invoice with a card payment link for clients who prefer to pay from their computer

If you're a plumber doing a mix of emergency residential work (tap payment on-site) and ongoing commercial work (invoiced billing), Square handles both from a single platform.

Retail Businesses

Square is the clear winner for retail. The Square for Retail app is a full point-of-sale system with inventory management, barcode scanning, staff clock-in, and end-of-day reporting — all free for basic use. The Square hardware ecosystem (readers, stands, receipt printers, cash drawers) integrates seamlessly. For a small retail shop spending $30,000-$150,000 per year, the 1.9% flat rate is cost-competitive and the POS functionality saves hours of manual reconciliation.

Professional Services (Accountants, Consultants, Lawyers)

Stripe is typically the best fit for professional services businesses because its invoicing and recurring billing functionality is more sophisticated. Stripe's integration with accounting platforms like Xero and MYOB is also excellent — transactions automatically reconcile, reducing bookkeeping overhead. For an accounting or consulting firm sending regular invoices, Stripe's invoice-with-payment-link workflow is clean and professional.

Online-First Businesses

Stripe is the dominant choice for any business primarily transacting online. Its documentation and developer APIs are industry-leading, its checkout conversion rates are high, and its integration with major e-commerce platforms (Shopify, WooCommerce, Squarespace) is seamless. For businesses building a custom website, Stripe's embeddable payment elements can be added to any page with minimal technical knowledge.

GST and Tax Implications

This is an area where many Australian small businesses make expensive mistakes. Here's what you need to know:

Are payment processing fees GST-inclusive?

Yes — Stripe, Square, and PayPal all charge GST on their processing fees for Australian businesses. This means the fees you pay are GST-inclusive (i.e., 10% GST is included in the stated fee). The good news: this GST is a business expense and you can claim the GST component back as an input tax credit on your BAS, provided you're registered for GST.

For example: if Stripe charges you $170 in processing fees in a quarter, approximately $15.45 of that is GST, which you can claim back. Keep your Stripe/Square monthly statements as the tax invoices that support your ITC claims.

GST on sales

The payment platform you use does not affect your GST obligations on sales. If you're registered for GST, you must collect 10% GST on taxable sales regardless of how you collect payment. Most businesses should configure their payment platform to ensure pricing is displayed correctly — if you charge $110 for a service ($100 + $10 GST), ensure your invoice clearly shows the $10 GST component.

PAYG Withholding from payments

If your business makes payments to contractors or employees through any platform, standard PAYG withholding rules apply. Using a payment platform doesn't change your obligations. Always check ATO guidance if you're unsure about withholding requirements for specific payment types.

Reporting to the ATO

The ATO receives third-party data from payment providers as part of the Taxable Payments Annual Report (TPAR) regime. If your business is in a TPAR industry (building, cleaning, courier, IT, road freight, security), you need to report payments made to contractors regardless of how they were collected. Additionally, from 2024, payment platforms are required to report merchant settlement data to the ATO — the ATO will use this to cross-check your business income declarations.

Getting Started: Step-by-Step for Each Platform

Getting started with Stripe

1. Go to stripe.com and create a free account with your email address
2. Complete identity verification (passport or driver's licence, plus business details including ABN)
3. Add your Australian bank account for payouts
4. Choose your first product: Payment Links (for quick payment collection), Invoicing (for client billing), or speak with a developer if embedding on your website
5. Test with a $1 transaction to confirm payouts are working before going live

Getting started with Square

1. Go to squareup.com/au and sign up with your email address
2. Verify your identity and add your ABN and business details
3. Order your free card reader — it will arrive by post within 3-5 business days
4. Download the Square Point of Sale app on your phone
5. Add your bank account and confirm a small verification deposit
6. You're ready to take your first payment — just tap "Charge" in the app and have the customer tap their card

Getting started with PayPal

1. Go to paypal.com/au and create a Business account
2. Verify your identity and add your bank account
3. Generate a payment link or add the PayPal checkout button to your website
4. Note that PayPal holds funds for 21 days for new accounts — this eases over time as your transaction history grows

The Bottom Line: Which Should You Choose?

For most Australian small businesses in 2026:

• Online-first businesses and SaaS: Stripe
• Tradies and mobile service businesses: Square (tap-to-pay at job sites) + B2BPay for commercial invoicing
• Retail with in-person POS needs: Square
• Professional services (accountants, consultants): Stripe or B2BPay (to pass card fees to clients)
• High-volume retail or hospitality: Tyro (get a custom quote)
• B2B invoice payments where you want to receive the full amount: B2BPay
• eBay/marketplace sellers: PayPal (you often have no choice)

If you're specifically looking for an alternative to Stripe or Square in Australia, B2BPay and Tyro are the two most meaningful locally-built options. B2BPay solves a different problem (B2B invoice payment without the seller paying fees); Tyro is a better fit than Stripe or Square if you need integrated EFTPOS hardware with Australian POS systems. For pure online payments at standard small business volumes, Stripe remains the most flexible and developer-friendly choice.

The key is to match the platform to how your customers actually pay you, not to choose the most popular option. If you're building a new website and want payment capability built in from day one, our free invoice generator can help you get started with professional invoicing while you set up your payment account.

For a practical step-by-step guide to getting set up — covering Stripe, Square, EFT, BPAY, Afterpay, and B2BPay — see our guide to how to accept payments online in Australia, including the ABN requirements, GST considerations, and which setup takes less than an hour.

Once your payment platform is sorted, the next question is often what the whole website setup should cost. If you're comparing options, our guide to affordable website design in Australia breaks down every tier of the market — from DIY builders to agencies — with honest pricing data and a checklist of what every website must include.