There are numerous reasons why eCommerce continues to grow in popularity. New Zealand was, for a while, lagging behind the rest of the western world, but this is no longer the case. In December 2014, there was a 12 per cent rise from the previous year in online spending in New Zealand. The most desirable online categories for online shoppers were, respectively, food and entertainment, books and newspapers, and computers & peripherals categories.

1. Top 8 Methods for Accepting Online Payments in New
Zealand
There are numerous reasons why eCommerce continues to grow in popularity. New Zealand
was, for a while, lagging behind the rest of the western world, but this is no longer the case.
In December 2014, there was a 12 per cent rise from the previous year in online spending in New
Zealand. The most desirable online categories for online shoppers were, respectively, ​food and
entertainment​, ​books and newspapers,​ and ​computers & peripherals​ categories.
Entrepreneurs are taking notice of the Kiwis’ positive outlook on online shopping, and are
rushing to meet this demand. One of the most important decisions you as an online retailer need
to make is deciding on what payment options to offer your customers.
Tweet: Tweet: “New Zealand’s Top online payment systems” @POLi – Click to Tweet
This post will walk you through the three main areas to consider when choosing an online
payment method for your business as well as the top 8 services in New Zealand.
Don’t leave this decision until the last minute
The biggest mistake many new business owners make is to put off making a decision about
which online payment solution to use until the last minute. You need to think about this topic
before your website is anywhere close to being launched as it can take a long time to get the
facilities you need in place.
Also, when it comes to accepting credit cards your bank may not be willing to give you a facility
for online payments at all.

2. Two big things you need to consider
1. How will your customers want to pay for your products or services?
It’s important to think about the kind of people you wish to target. Consumers have different
levels of comfort with shopping online particularly when it comes to paying for things.
Some people are accustomed to shopping online; they’re used to using a credit card to buy
things. Others are happier to pay via bank transfer (a behaviour heavily influenced by being
brought up on Trade Me).
Then of course there is the issue of accessibility to different payment methods (50% of New
Zealanders don’t even own a credit card). So, to avoid missing out on a lot of potential custom,
it’s very important to ensure you offer a ​range​ of payment methods that cover both credit and
debit options.
People want to ​choose​ how they pay. The retailers who offer them this choice stand to win.
2. What overall options do you have?
Broadly speaking, your options include accepting credit card payments via a payment gateway,
credit card payments via Paypal and payments direct from your customers’ bank accounts. It can
feel like the options are endless ­ scheme credit and debit, direct bank transfer, gift cards, prepaid
cards, offline Internet Banking, qcard, loyalty cards, Prezzy cards ­ but they can be categorised
broadly as follows:
1.Credit Card​.
You will need a Merchant Account from a bank for online (card not present) transactions, and
note that your bank may not be willing to give you this. You’ll also need a relationship with a
payment gateway provider (see below) and your website will need to integrate with that
provider.
You can offer your customers a credit card option via Paypal but it’s expensive and your
customers will need to be diverted to the Paypal environment. Paypal tends to go hand in hand
with eBay and therefore it’s not as popular in New Zealand as other parts of the world.
2. Bank transfer.
You could allow your customers to pay you via their Internet Banking by providing them with
your bank details. The downside is, this approach is not very elegant, cart conversion will be
terrible and the payment reference errors will drive you crazy.
The two best options for New Zealand retailers are POLi and Account 2 Account. These systems
both utlise the customer’s Internet Banking to enable them to make instant payments online.

3.
3. Everything else.​
Outside of Bank transfers and credit cards, you could consider all the other card schemes –
loyalty, prezzy, qcard etc. To be honest though, most NZ Retailers would consider these payment
options to be pretty low down the list of priorities.
1. Credit Card & Payment Gateways
Credit Card Schemes – there are a range of credit card schemes operating in New Zealand. The
most commonly known are Visa, Mastercard, Diners and American Express.
There are two fees that you should be aware of when considering offering credit card. Your bank
will charge you a Merchant Service Fee (or MSF), typically a percentage of the transaction value
– anywhere from 1 – 6%, (but likely to be around 4% for a startup business in a low risk business
category), and your gateway will charge you a per transaction fee as well.
Payment Gateways – these connect all participants in a transaction together, i.e the merchant
(you), the issuing bank (the bank that issued the card to your customer), the acquiring bank (your
bank that issued you with a Merchant Account) and the credit card schemes.
The common Payment Gateways in New Zealand are DPS Payment Express, Paystation,
Flo2cash and IP Payments. There are also new entrants such as Swipe that provide a complete
service so you don’t need a separate relationship with a bank – i.e you get one fee per transaction
that incorporates the MSF and gateway fee. Confusing, I know!
The main New Zealand banks often have a branded Gateway offering e.g. BNZ Buyline or ANZ
eGate. Often the banks’ offering is simply while labelled from one of the Payment Gateway
providers, meaning the bank uses their system but put their branding on it.
Flo2Cash
Flo2Cash provides credit card services to enable merchants in receiving their payments as easily
as possible, whether it be over a landline phone, internet or your mobile phone. All transactions
are processed in real time. Like Swipe they’re able to offer a bundled service negating the need
for a facility from a bank.
http://www.flo2cash.co.nz/creditCards.php
Paystation
Specialised payment technologies development for eCommerce entrepreneurships as a Paymark
Certified Solutions Provider, PayStation is there to help you find the right payment solution for
you and your customers. They support internet credit card payment through the following banks:
ANZ, ASB, Bank of New Zealand and Westpac. Paystation was recently purchased by Trade
Me.

4. http://www.paystation.co.nz/cms_display.php
DPS – Payment Express
DPS is a well known credit card/payment gateway provider in New Zealand. It offers a range of
services including merchant hosted and non­hosted options as well as a simple manual credit
card processing facility.
https://www.paymentexpress.com
IP Payments
IP Payments offers a versatile service, and empowers you to handle any kind of payment. You
can handle real­time transactions, batch payments, even recurring transactions. It is always good
to give your customers the option to use their phone to complete payments and order products or
services. Every third New Zealander owns a smartphone, and it would be purely illogical to
ignore this market which is only going to get bigger.
http://www.ippayments.com/
SecurePayTech
SecurePayTech.com provides secure and affordable credit card authorization and processing
services for on­line businesses. Comprehensive reporting of individual transactions combined
with historical trend analysis keeps you firmly in control of your business.
http://www.securepaytech.com/
PayPal
The alternative way to offer your customers credit card payment options is via​ ​Paypal.
Many small startups go down this path first ­ particularly if they can’t get a Merchant Account
from a bank or want a low cost entry into the market. Although, it is pretty easy to get started on
Paypal, the transaction fees are high which can eat into your profit margins pretty quickly
https://www.paypal.com/nz/
2. Direct Bank Transfer
POLipay
POLiPay has been allowing customers with New Zealand bank accounts to make purchases and
pay without using a credit card since 2007. It offers a seamless experience delivered via the

5. customer’s Online Banking. Simply log­in to your bank account and confirm the payment.
POLiPay is extremely secure and simple to use, and above else, allows people to shop through a
familiar platform ­ their Online Banking account. This is an attractive selling point for online
shoppers and could well increase your online sales with fewer transactions dropped during
checkout.
Ease of use and familiarity are great allies of eCommerce since there is still a bit of caution
coming from New Zealanders when it comes to online shopping. Letting them operate from a
familiar territory helps bridge this trust gap significantly.
http://www.polipay.co.nz/
DPS Payment Express Account to Account
Payment Express Account2Account offers a similar service to POLipay but has only been in the
market since 2014 and therefore this service and brand hasn’t been exposed to as many
consumers as POLi. Payment Express charge’s monthly fees so take this into consideration if
you’re not going to use them as your credit card payment gateway.
http://www.paymentexpress.co.nz/Products/Ecommerce/Account2Account
Choose an online payment solution wisely
There is a lot to consider when it comes to choosing the perfect online payment method for your
online business. Depending on which segment of the market you want to target, your long­term
business plans, the state of your finances as well as your functionality preferences, what is ‘ideal’
may vary.
All of the above mentioned solutions are reliable and tested, but it is up to you to make the final
call when it comes to picking the one that works for you. Finding that ideal fit when it comes to
payment methods is something you can’t get any other way.
We hope this list helped you make the right decision.
What are your thoughts on the best online payment methods in New Zealand? Let me know in
the comments below!
Until next time!
Jeff Skidmore
Director, POLi