1) Australian Web Host is probably more expensive. If this is a probably, looking for something in Los Angeles etc - with lower latency to Australia being the key. USA sites tend to fare quite well here anyhow.
2) You will need SSL and dedicated IP as long as you store some sensitive information, such as passwords etc. SSL protects the transit of data. Basically any e-commerce type of application should have SSL. It also gives users better trust in purchasing from you even if you will be using Paypal.
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