Last updated on March 28th, 2025 at 01:07 am
Restaurant Credit Card Processing: The Ultimate Guide for Business Owners
What Is Restaurant Credit Card Processing?
A restaurant merchant account is a specialized payment processing solution that allows restaurants to accept credit and debit card payments. The restaurant merchant account works as a bridge between the restaurant’s bank and the customer’s bank for the purpose of facilitating safe credit card payments. With an omnichannel restaurant credit card processing account, customers can make payments via a retail credit card machine, restaurant website, or mobile app.
The merchant account temporarily holds the funds received from the customer’s credit card. Depending on the agreement between the restaurant and the merchant processor, these funds are sent to the restaurant’s bank account in 1-2 business days. Advanced restaurant payment processing solutions come with virtual terminals, POS integration, and a fully functional API.
The processing fees for accepting credit card payments at restaurants depend on many factors. The key differentiator is the nation where the restaurant operates. In some nations, card transaction pricing is regulated by the government. In the US, the rates range from 1.5% to 3.5%. QuadraPay has been providing affordable credit card processing services to restaurants since 2016. The restaurant merchant account specialists at QuadraPay have created this industry guide for you. We are sure that after reading this guide you will have a deeper understanding of credit card processing for restaurant businesses. Let’s begin.
Retail vs. Online: Which Restaurant Credit Card Processing Solution Is Right for You?
Choosing the right restaurant merchant services company is crucial for the growth of your business. Restaurants that operate via a retail store can opt for credit card terminals. If your restaurant offers deliveries and takeaway, then you may choose an online payment solution. Let us explore these solutions in detail.
Retail Credit Card Processing for Restaurants:
Retail terminals are best for traditional dine-in restaurants, quick-service restaurants, and food trucks. A retail credit card terminal for a restaurant is a physical POS system that accepts card payments and also efficiently manages inventory. These brand new terminals support a variety of cards, including EMV chip cards and magnetic stripe cards. Merchants can also accept NFC payments and e-wallets like GPay, Apple Pay, and Samsung Pay. With retail credit card terminals, restaurants can accept transactions in fast mode and improve table turnover. Strict security parameters reduce fraud risk. Modern terminals support industry-specific requirements such as tipping and bill splitting.
Online Credit Card Processing for Restaurants:
The online payment solution is perfect for those restaurants that offer online ordering, catering services, and deliveries. This solution works with e-commerce websites and mobile apps. All transactions are processed while implementing mandatory security parameters to prevent fraud. With features like one-click checkout, regular customers can place orders almost instantly. The restaurant payment gateway supports subscription payments. Restaurants can expand their reach beyond the physical location by using an online payment system. By using self-hosted e-commerce websites, restaurants avoid the high commissions of third-party delivery platforms.
Key Features of a Restaurant Payment System:
A restaurant merchant account does not only offer a payment acceptance system but also offers various other features and benefits. Knowing these features can help entrepreneurs in efficiently using the credit card processing solution. Let’s explore some of these features.
Contactless Payment Support
While traditional magnetic strip-based cards are still in use, most credit card issuers have started issuing EMV and NFC-enabled cards. By accepting contactless payments, restaurants can increase their revenue while reducing the risk of card-present fraud.
Restaurant Point-of-Sale (POS) Integration
Restaurants prefer to use their existing point-of-sales system with the new credit card terminal. The good news is that most of our solutions are compatible with popular restaurant point-of-sale systems. By synching the retail credit card terminal with the POS system, restaurant owners can easily perform order management, inventory tracking, and sales reporting. Beyond this they can also use features like split payments, tipping options, and customized receipts.
Multiple Payment Methods
For maximum conversion, our payment solutions come with multiple payment methods. You can easily accept all types of credit and debit cards; along with that, you can also accept ACH and bank transfers. By offering multiple payment methods to your customer, you increase the possibility of a successful transaction.
Wireless & Mobile Payment Terminals
Our credit card terminals come with multiple connectivity options such as Wi-Fi, Bluetooth, and 4G. These compact devices are perfect to process payments at tableside, curbside, drive-thru, or at the counter.
Secure PIN & Signature Authentication
Some restaurants may prefer to get a signed acknowledgement from customers at the time of payment. For this we offer pin pad terminals with a signature screen. Most of the time these terminals are used at fine dining restaurants. Such a requirement is rare at casual dining restaurants.
Digital Invoices
Many customers prefer to get paperless digital receipts. Our payment solution comes with email and SMS-based receipt generation. However, if a paper receipt is required, then a printer can be connected to the point-of-sales system.
When you choose a feature-rich restaurant credit card processing solution, then you can confidently accept credit card transactions from your customers. A good solution will help enhance the overall customer satisfaction level. Whether you are searching for a retail credit card terminal or online payment processing account, you should make sure that you get the above-listed features for better operations.
Restaurant Credit Card Processing Fees
When you operate a restaurant business, it becomes extremely important to keep control of costing. Working with expensive credit card processors can chew up your profit. That is why it is important for you to have a proper understanding of all the fees associated with credit card processing at your restaurant. Once you are aware of these fees, then you will be able to negotiate well with your payment processor. Keep in mind that in the restaurant payment industry, there are fixed and variable fees. The most common fees are explained here.
Transaction Fees
This is a small percentage that a restaurant merchant pays on every transaction. Depending on the card type used, the transaction fee can vary. However, in general, restaurants pay between 1.5% and 3.5% for credit and debit card processing.
Monthly Fees
Some credit card processing companies charge a monthly account fee from restaurant owners. If you negotiate well with the payment service provider, chances are that they will remove or reduce this fee.
Chargeback Fees
Restaurants that operate on a hybrid model and accept online payments may face chargebacks. In such instances, if the restaurant is unable to provide a solid defense, then the customer will win the chargeback case. For every lost chargeback, the restaurant owner pays a chargeback fee.
Equipment Fees
Some processors may offer free credit card terminals for qualifying restaurants. However, in most cases, these devices come with basic features. For advanced devices, there is usually a cost involved. The merchant can either pay this cost at one time or can choose a rental plan.
Restaurant Credit Card Processing Application Process
The application process for a restaurant credit card processing account is simple. However, it is important for you to understand all the steps involved, as it will help you get quick approval.
Research and Compare Providers:
The first step is to research available options. Do not make the selection without comparing at least three restaurant payment processors. You should work with the provider that offers services that match your business requirements, such as online payment, retail credit card terminals, or mobile transactions.
Complete the Application Form:
After identifying the right payment service provider, you will have to share your business details with them. The merchant processor will send an application form to you. On this merchant account application form, you will share your essential details, such as business name, contact information, how many years you have been running the restaurant business, average ticket size, and details about the products and services offered.
Provide Supporting Documents:
Along with the application form, you also have to send several business and personal documents. The objective of collecting such documents is to verify the legality of your company and also identify the owners. The most common KYC documents include the copy of the business license, recent utility bill, personal identification document of the directors, previous bank statements, and the processing history.
Underwriting Process:
Once you submit the application form and the KYC documents, then the payment processor will start the underwriting review. The merchant processor will identify the risk level of your business and, based on that, determine whether they will give you an account or not. In most cases, restaurant merchant accounts are approved within a week’s time; however, if the merchant’s profile is not good, then this time may be extended.
Agreement & Setup
If the payment process decides to onboard your company, then you will receive a merchant account agreement with the details of the pricing. Once you sign the agreement, then you will get the integration and setup information.
Restaurant Credit Card Processing: Common Questions Answered
Red Flags to Avoid When Choosing a Restaurant Payment Processor
When choosing a restaurant payment service provider It is important for merchants to be watchful about some red flags. As these can be an indication that you should stay away from such providers. You should avoid working with any payment processor that does not give you clear pricing. Stay away from all those providers that are vague about fees. Any provider that charges an excessive setup fee or forces you to accept an early termination clause should be avoided. Stay away from providers that do not offer clear terms and conditions or have unprofessional customer service.
What Pricing Model Should a Restaurant Choose, Interchange-Plus or Flat-Rate Pricing?
It is important for restaurant owners to understand the key difference between interchange plus pricing and flat rate prices. For a restaurant, entering change plus pricing means a small markup charge by the payment processor on the actual brand card fees. This is a transparent structure where the restaurant can see how much is being paid for each card type. On a flat-rate pricing model, a restaurant only charges a fixed percentage for all transactions regardless of the card type. A flat rate price model can be similar to understand but in the long run can be expensive for the restaurant. If you process a lot of transactions, then we suggest you explore the Interchange Plus price model; however, if your transactions are limited, then you should stick with flat-rate pricing.
The Future of Restaurant Payment Processing
The payment processing industry will continue to evolve. Better transaction processing solutions will be made available for restaurant businesses. We will see an increase in the use of digital wallets and NFC-enabled card payments at restaurants and related establishments. The restaurant industry will see great acceptance for voice and cryptocurrency payments. Card brands will implement strict rules to reduce fraud. Technology companies will develop innovative products by utilizing blockchain technologies to identify and block suspicious transactions. As a restaurant business owner, you should keep an eye on these developments to stay competitive while adapting to changes.
Conclusion: Final Words
Choosing the right restaurant merchant account is a very important task for restaurant owners. Whether you run a traditional dine-in restaurant, bistro, pizzeria, or a modern cafe, the right payment solution can have a significant impact on your business operation as well as profits. By understanding the above-mentioned features, price structure, and red flags, you will be able to make an informed decision.
If you have any questions regarding restaurant credit card processing, then feel free to email us at [email protected]. If you want us to assist you in your search for the best restaurant credit card processing account, then please fill out the merchant account application form.
