If you’re looking for ways to pay for your online purchases without using a debit card, you might be wondering what your options are. Well, you’re not alone. We’ve been asked this question a few times so we thought we’d jot down our thoughts.

Credit Cards

Credit cards are the most obvious alternatives to debit cards to most consumers.  Debit cards and credit cards look very similar and they are accepted by the same places.  They also charge similar amounts to shop keepers and service providers for processing payments made by the cards.

The main difference between debit and credit cards is interest. Credit card providers make money by charging interest on the balance. Debit cards, on the other hand, are linked to a bank account and deduct funds directly from it. Credit card payments depend on the credit limit, while debit card payments depend on the available funds in the bank account.

Virtual debit cards.

These are digital versions of your physical debit card that you can use exclusively to pay online without needing your physical card. They work by generating a unique card number for each transaction, which reduces the risk of fraud and identity theft. Some examples of virtual debit cards are Apple Pay, Google Pay, Samsung Pay, Fitbit Pay and Garmin Pay. You can link these services to your existing bank account or debit card and use them to make contactless payments in-store or online. Some banks also offer their own virtual debit cards, such as Westpac’s Digital Card.

Online payment services.

Think of these as third-party platforms that allow you to pay online using your bank account, credit card or debit card balance. They act as te go-between between you and the store. Some of the services may offer additional features such as: buyer protection, dispute resolution and even rewards. You’ve probably heard of the big name online payment services like PayPal, Poli and BPAY. PayPal is definitely one of the most popular and widely accepted online payment services, which lets you connect in your credit card, debit card or PayPal balance. Poli is an Australian service that lets you pay directly from your bank account without sharing your financial details with the merchant. BPAY is mainly used for paying bills, but it is becoming more popular for some online retailers also accept it as a payment method.

Buy now, pay later services.

Buy now, pay later(BNPL) lets you split your online purchases into instalments that you pay over time, usually without interest or fees. They are similar to credit cards, but they don’t require a credit check so the barrier to entry is lower. Some examples of buy now, pay later services you’ve probably heard of are Afterpay, Zip, Klarna and Humm. Afterpay is undoubtedly one of the most popular and widely available BNPLs in Australia. They operate on a fortnightly basis which lets you pay for your purchases in four instalments.

Zip on the other hand offers two products: ZipPay & ZipMoney. ZipPay lets you pay for purchases up to $1,000 in weekly, fortnightly or monthly instalments and Zip Money lets you pay for purchases over $1,000 in monthly instalments with interest-free periods.

Klarna is a Swedish service that lets you pay for your purchases in four fortnightly instalments or in one lump sum within 60 days. It is integrated with the Commonwealth Bank and can be used with their range of debit cards. Humm is an Australian service that lets you pay for purchases up to $10,000 in weekly or fortnightly instalments.

Each of these alternatives has its own pros and cons, so you should always compare them carefully before choosing one that suits your needs and preferences. You should also check the terms and conditions of each service, such as fees, charges, interest rates (if any), refund policies and security measures.

Want to access foreign currencies?

If you’re looking for a simple and convenient way to manage your money across multiple currencies and countries, you might want to consider the Wise multi-currency card. This is a debit card that lets you hold over 50 currencies in your account. The unique feature is that you can spend at the real exchange rate with low conversion fees. You can also send money internationally with Wise at low costs and fast speeds. The Wise card is accepted anywhere that accepts Mastercard, and you can use it online or in-store. You will need to pre-load it with funds though, which could take a day or two depending on who you bank with.

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So whether you want to avoid fees, get more protection or just have more flexibility, there are plenty of alternatives to debit cards that you can use in Australia. The best option for you depends on your personal situation and preferences, so do your research and find the one that works for you.