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Efficient and secure restaurant payment processing is key to succeeding in the competitive restaurant industry. It goes beyond just taking credit cards. Modern payment methods need to fit well into your restaurant's daily operations, improve the customer experience, and keep payments safe.
A great payment system can handle different payment methods, stay compliant with regulations, and manage transaction data, helping your restaurant run smoothly and keep customers happy.
In this blog, we will explore restaurant payment processing in detail, the key features you should look for, and the processing fees. So, let’s dive in.
Restaurant payment processing is the system and technology that enables seamless, secure transactions between your diners and your business. It includes the hardware, such as terminals for accepting credit, debit, and digital payments, the sophisticated software and backend systems that approve transactions, move funds, and ensure compliance with industry standards. It is the bridge between your customer’s money and your bank account.
These systems help make sure the payment goes through smoothly and then transfer the money to your bank account. In return for their service, they charge a processing fee.
The restaurant payment system is complex, with different key players working together to make sure transactions go smoothly. Here's a breakdown of what happens behind the scenes:
As the restaurant owner, you are the merchant. You set up the payment system and take payments from your customers.
A payment processor is a third-party company that helps move funds from your customer’s bank to your bank. They provide the equipment, like payment terminals, to accept debit and credit card payments. Once the payment is processed, the money is usually sent to your bank account within one to three business days.
Card brands like Visa, Mastercard, and American Express set the guidelines for where and how credit cards can be used. As intermediaries, they help manage the transactions between your restaurant and the banks that issue the cards. Each card brand has its own system, which can influence the fees you pay and how quickly transactions are processed.
The issuing bank is the bank that gives your customers their credit or debit cards. For example, if a customer uses a Visa card from Chase, then Chase is the issuing bank. This bank checks if the customer has enough money or credit to make the purchase.
For online orders, a payment gateway is often used. This safe system protects the customer’s payment details and sends them to the payment processor, making sure the information stays secure during the transaction.
Finally, the customer starts the process by deciding to pay with their card. Their role is important because they are the ones providing the money. After they choose how to pay, they either enter their card details or use a contactless method to begin a safe transaction.
Here's a quick look at what basic features you’ll find in a restaurant payment processing system:
Efficient payment processing for restaurants doesn’t just speed up your guest payments; it can transform the entire operation. Here's how:
Offering contactless payments keeps operations quick and smooth. Plus, faster transactions mean happier customers who are more likely to return.
With faster restaurant payment processing solutions, you can turn tables over more quickly, especially during peak hours. For example, contactless payments can shave off minutes during the checkout process.
Integrated systems cut down on the chances of human error. This makes sure your sales and inventory management system reports are always accurate.
Real-time reporting allows you to track everything from sales trends to cash flow. Then, you're much more likely to make informed business decisions.
Payment fees can be a bit confusing to understand. So, here’s a quick breakdown:
MDR is the percentage taken from the transaction amount as a fee by the payment processor. It usually has a few parts:
Transaction fees usually include two parts:
This is the basic breakdown of what you pay whenever a customer makes a payment.
A customer pays with a credit or debit card at your restaurant.
The payment details are sent to the payment processor, which sends it to the card network (like Visa or Mastercard).
The card network checks with the customer’s bank to make sure there are enough funds or credit.
Once the payment is approved, the money is transferred, and these fees are taken out:
Processing fees vary with the type of transaction method you've opted for. Here's how:
A student credit card with a small limit costs less to process than an international business card with many perks. High-end cards like American Express usually come with higher processing fees, such as from 2.5% to 3.5%. On the other hand, a standard Visa or Mastercard levies a 1.5% to 2.5% processing fee.
Generally, more secure payment methods are cheaper. For instance, swiped cards usually have lower fees compared to online payments, where fraud risk is higher. EMV chip cards are more secure than old debit or credit cards and cost less to process. Phone orders, where the card isn’t present, also cost more due to higher fraud risks.
Larger restaurant or food truck chains often get better processing rates as they handle higher transaction volumes. Processors know they’ll be dealing with a lot more transactions, so they’re willing to offer lower rates to secure their business.
On the other hand, small, independent restaurants process fewer transactions. So, they're riskier and less profitable for processors, leading to higher rates.
Now that you understand payment processors and their rates, here's how you can find the right fit for your restaurant:
With these insights, you can narrow down your options for a service provider. Whether you want the personalized support of a Merchant Account Provider or the quick setup of a Processing Aggregator, picking the right choice is important. In the end, you can go with an MAP and combine it with a good processor to get the best benefits from both.
Restaurant payment processing goes beyond just swiping cards. With integrated POS systems and top-notch security, picking the right processor can make a big difference in how smoothly your restaurant runs and how happy your diners are.
OneHubPOS plays nice with your payment processing system. Packed with amazing features and top-notch support, it’s here to make payments easier. Whether you're running a restaurant, food truck, bistro, or even a pizza joint, OneHubPOS has got your back. Get started with just $1!
Typically, a payment takes just a few seconds to process. For most restaurants, it’s a quick swipe, tap, or scan. If your system is up-to-date, it can be as fast as 2-3 seconds. Older systems might take longer.
Most modern payment processors make integration easy. Just plug in hardware (like card readers) and sync your software through an app or platform. If you’re unsure, OneHubPOS offers in-person support via email.
You’ll usually face three main fees:
Make sure to read the fine print. Also, note that OneHubPOS charges the lowest transaction fees, just 2.3%!
Yes, it’s legal in many places, but it depends on local laws. Some restaurants add a small surcharge for credit card payments, but you’ll need to clearly display this for your customers.
Make sure your processor has good dispute management so that it handles chargebacks smoothly. Also, be proactive with clear refund policies to avoid disputes.
Contactless payments, QR code payments, mobile wallets, and even cryptocurrency are trending! Integrating these can speed up service and appeal to customers.
Roopak Chadha, Director of Business Development with expertise in Business Growth & Strategy, Customer Success, and Product Management. Excels in driving business growth through strategic planning, customer-centric approaches, and effective operational leadership.
