You opened your restaurant with a dream to share your love of food with the community.
But between skyrocketing costs and slim profit margins, expenses can quickly spiral if you don’t manage them carefully. Payment processing fees take a huge bite out of revenue for many restaurants.
Yet with the right card processing solution in place, you can simplify transactions and maximize profits.
This guide breaks down the essential information restaurant owners need to make smart decisions when evaluating card processing systems.
Why Card Payment Processing is Vital for Your Restaurant
Today’s consumers increasingly rely on cards over cash.
And credit and debit card payments are rapidly overtaking cash as the preferred mode of transaction.
For restaurant owners, this shift means adapting to the needs of your customers by offering seamless card payment options.
Benefits of Accepting Card Payments
Expanding Your Customer Base: By accepting cards, you open your doors to more people. Nowadays, many customers prefer not to carry cash.
They find paying with a card easier and safer. When you accept card payments, you’re telling these customers, “We’ve got you covered!” This approach helps in attracting not only the regulars but also new faces who might just become loyal customers.
Speedy Transactions: Time is money, especially in the bustling environment of a restaurant. Card payments can speed things up. When a customer pays with a card, the money can move quickly into your account. Some payment systems even allow this transfer to happen almost immediately.
Internet Sales Opportunities: If you’re also serving up delicious meals through an online ordering system, card payments are essential. They make buying food online easy and safe for your customers.
When people order food from your website or an app, they can pay with their card right then and there. This method is not only convenient for them but also secure, as good payment systems protect their card information.
Choosing the Right Credit Card Processor
For your restaurant to accept card payments, you’ll need a card processor. There are a few different types to choose from, each with its own way of working:
Banks: You can start by asking your bank if they offer card processing services. They are likely to have options that fit your restaurant’s needs.
But remember, getting this service through your bank can involve a lot of paperwork, and they might take a close look at your business before saying yes.
Third-Party Processors: These processors are great if you don’t want to open a special account just for handling card payments.
They handle everything – from checking if the card is good to use to making sure the money ends up in your account. They’re kind of like an all-in-one service.
Independent Sales Organizations (ISOs): These are companies that work with third-party processors to set up card payment services for businesses like yours.
They take care of getting things ready for you to accept card payments, but they don’t handle the payments themselves. ISOs can be easier to work with than banks, but they might charge more per transaction.
Financial Service Providers: These are big names like MasterCard, Visa, and Discover. To work with them, you’ll usually need to go through another company that helps businesses get set up with these services. American Express is a bit different because you can apply to them directly.
Mobile Credit Card Processing
For on-the-go or small-scale operations, mobile processing solutions offer flexibility and compatibility with various devices, including smartphones and tablets.
Cost Considerations
Understanding the full scope of costs associated with card payment processing is crucial for making a financially sound decision for your restaurant. Here are the key expenses:
Transaction Fees: These are charged for each payment processed. The fee varies depending on the type of transaction: card-present transactions (where the card is physically swiped or inserted) typically cost between $0.10 to $0.30, while card-absent transactions (like online or phone payments) range from $0.20 to $0.50.
Monthly Summary Fees: This fee, usually around $10, covers the issuance of monthly statements detailing your credit card transactions, providing a clear view of your sales and charges.
Equipment Costs: This is often the largest upfront investment, covering terminals for swiping credit cards. Basic terminals might range from $150 to $350, while those with printers could be $250 to $500.
Wireless terminals, offering more mobility, could cost between $500 to $1000. Leasing equipment is a more affordable short-term option, often starting at around $25 per month.
Additional Fees: These can include application or setup fees, which may be around $200 and are not charged by all providers.
It’s important to not only consider these individual costs but also understand the cumulative impact on your restaurant business’s finances.
While it might be tempting to opt for the cheapest solution, the lowest price doesn’t always equate to the best value. Ensure that your choice balances cost-effectiveness with the quality and reliability of service.
Before you make a purchase, consider these points
Before settling on a card processor, consider the following:
Customer Support Quality: Ensure the processor offers prompt, helpful customer support, vital for resolving any payment issues swiftly.
Equipment Reliability: Choose equipment known for its durability and reliability, minimizing downtime and maintaining smooth operations.
Fund Transfer Timelines: Verify how quickly funds from transactions are deposited into your account, as this impacts your cash flow efficiency.
Fee Variability and Negotiability: Understand all potential fees and explore negotiation possibilities to get the best deal for your business.
Contract Terms: Carefully review the contract, paying attention to termination clauses, minimum charges, and any hidden terms to avoid surprises.
Remember, the cheapest option isn’t always the best. Balance cost with the service and reliability you need to run your restaurant efficiently.
Making the Smart Choice
Choosing the right card payment processor is a significant decision for any restaurant owner. It affects not just your day-to-day operations but also your long-term financial health.
Take the time to research, compare, and understand your options. With the right system in place, you’ll not only meet your customer’s expectations but also enhance your business’s efficiency and profitability.
