restaurant payment processingA recent Consumer Payment Study conducted by Total System Services (TSYS) concluded that 74% of diners in the United States settled their bill using a credit or debit card because it’s more practical and provides convenience. To serve more customers, 92% of restaurants now accept cards.
To succeed in your venture, you must, at the very least, learn the basics of online payments for restaurants and find the best credit card processing company to help set you up in no time.

Read on to know more about the best credit card processing for restaurants.

Payment Processor for restaurants
A payment processor provides the point of sale (POS) machine or payment software to the restaurant, which allows them to accept digital payments such as debit or credit cards. The payment processor acts as a middleman between the restaurant and the customer’s issuing bank by properly clearing and routing the transaction.
After the settlement, the money is then deposited to the restaurant’s merchant account.
Payment processors then charge restaurant credit card processing fees. The average credit card processing fees for restaurants range from 1% to 4%. Some credit card acquirers add $.10 to $.30 per transaction.
Some may think that getting a payment processor is costly, but they actually help businesses by simplifying their accounting and payment processes. Even more important is their services usually come with compliance and data security tools, which hugely decreases the probability of fraud, scams, and disputes for restaurants and businesses.
A payment processor increases a business’ profit by enabling them to accept card payments. Most customers spend more if they use a credit card, and tipping servers is much easier.

Factors affecting restaurant credit card fees
Payment processors do a rate selection procedure to determine the amount that will be imposed on a restaurant. The process includes checking the restaurant’s credit history, their established or projected income volume, and assessing the whole industry.
Note that businesses that bear a low risk and high volume tend to have lower rates compared to newly opened restaurants.
In availing of their service, acquirers impose three types of fees namely flat, situational, and processing. Take note of the following fees:

  1. Flat fees are composed of annual, batch, monthly, network access, online reporting, payment gateway, statement, and terminal cost. It is highly suggested to familiarize yourself with the contract first before signing as you may receive a costly monthly bill. Also, some of the mentioned costs are negotiable, so use your dealing skills efficiently.

To make sure you get the best credit card processing for restaurants, do your own research, and compare other payment processor rates. Some offer lower fees, or they may not charge for features your business will not use.

  1. Situational fees are made up of costs brought about by a possible cancellation, chargeback, and liquidated damages. Other costs included in this type are international, monthly minimum, NSF, and set -up. Note that most of the fees can be negotiated.
  1. Processing fees are determined per transaction and are made up of three different types of fees: the interchange fee by the issuing bank, the card brand fee, and payment processor markup.

What are the restaurant credit card processing fees?
For example, a customer paid $100 for his meal. Automatically, a $1.54 will be charged to cover the interchange fee set by the issuing bank. Credit cards (American Express, MasterCard, Visa, etc.) are affixed with interchange fees, and every time a customer uses it, a charge of .3% for debit cards and 1.81% for credit cards takes place.
A small percentage cost known as the card brand fee amounting to $.10 will then be included in the total cost. Finally, as payment routing the money from the cardholder to the card brand network, $.35 goes to the payment processor.

What is the best restaurant credit card processor?
best restaurant merchant accountIn choosing the best restaurant credit card processing for your business, you must know that there are two types: the aggregator and merchant account providers.
An aggregator offers a basic process equipped with a flat fee per transaction. Small businesses opt for this type of processor as the benefits are fast and it comes with a simple fee structure.
One disadvantage of acquiring services from aggregators is that you will have to pay higher rates on cards. Account holds are also frequent due to suspicious activities, making the flow of your business inefficient. Also, waiting for the funds to be transferred on your account may take time.
Merchant account providers, on the other hand, offer businesses many features such as their own merchant ID and hardware such as restaurant credit card machines.
Hardware is classified into two: Integrated payments and non-integrated payments. Integrated payments assist your Point-Of-Sale or POS system with accounting procedures, lessening errors caused by manual computation.
On the other hand, manual entering is needed when you choose non-integrated system hardware. Just make sure all the logged information is correct every time you use it.
During interruptions, merchant account providers can give your business protection to still operate. In terms of their service charge, they will present a pricing model where your business will settle the exact amount stated on the card.
Comparing the two types of payment processing, it’s safe to say that while aggregators offer flat-fee pricing with higher costs for lower interchange rate cards, merchant account providers use cost-plus pricing with exact or low cost for low tier rate cards.

How to choose the best payment processor for your restaurant
Listed below are some useful advice to help you decide on choosing a payment processor. Bear in mind that the best deal offers an advantage not only to you but for your customers as well.

  • Compare all available options. Note that some payment processors offer lessened transaction fees but may come with a higher flat fee. What will benefit your business more in the long run?
  • During your shop around, ask them the specific charges each option bears. Make sure you understand the contract, specifically its scope and length.
  • Find a partner that can work efficiently with your existing POS software.
  • Check reviews and comments about the service of the payment processor. Make sure it aligns with your business’ goal.

For more information or to get started with your restaurant credit card processing services, please contact one of the Allied Payments representatives.   Our team of restaurant payment professionals will be happy to help you find the best merchant account for your business.