There are many reasons why chefs become restaurateurs. But a passion for food and great people skills can build a strong foundation upon which a  thriving restaurant can be built. However, great success in the kitchen doesn’t always translate to success in the office. Failing to understand and anticipate your customers’ needs can prove an impediment to your business no matter how good your food is. The restaurant game is typically low-margin and high turnover, meaning that you need to keep bringing in lots of new diners to thrive in this competitive market.

You need to serve not just great food, but a dining experience that assures outstanding value for money. And part of this is quick and easy payment processing. You need a merchant service that makes it easy for the customer to pay as well as being easy and affordable for the restaurant to manage.

With that in mind, here are some useful tips on choosing the right credit card processing system for your restaurant…

Know what happens when your customer makes a payment

Before we get into establishing a criteria for a restaurant payment processing system or merchant service, it’s important to know just what happens every time one of your customers swipes their card. Knowing where that money goes is vital if you’re to make informed decisions about your card processing system.

Broadly speaking; the process is as follows;

  • The customer pays 100% of the tab for their meal.
  • 1.87% goes to your issuing bank.
  • 0.13% goes to the card association (Visa, Amex, Matsercard, Discover etc.).
  • 0.3% goes to the payment processor.
  • 0.2% goes to the payment gateway
  • That leaves 97.5% to go to your restaurant

Rates may vary depending on the card association or payment processor, but that’s where 2.5% of your payment goes before entering your cash flow.

Choose a rate type that works for you

There are several rate types available to restaurant businesses. Which type you choose will depend on your restaurant, your turnover, your strategy and your goals. These include;

Interchange-Plus– This consists of 3 types of fees set by the bank, the credit card association and the payment processor. Rates vary by card type but the processor’s fee can be negotiated. Because you don’t know which cards your customers will be using you can’t always preempt the fees.
Flat-Rate- This is becoming increasingly popular. Fees are based on a median rate between cards and so there’s no fluctuation between card types. This can make costs more transparent and make cash flow projections easier.

Tiered– Sometimes processors may have tiered processing rates. These tend to be 3 tiered; Qualified, Mid-Qualified and Unqualified. Because processors don’t always disclose what makes their rates qualified, this can make it difficult to preempt their markup.

Avoiding hidden fees

It’s vital not to commit to a processing system until you’ve ascertained exactly what their fees are and are reasonably certain you won’t get any unpleasant surprises. You’ll be relying on your payment processing partner to ease cash flow to keep your vendors paid and to give your customers the experience they deserve. Keep your eyes open for hidden fees by;

  • Keeping an eye out for variable cancellation fees. Fixed fees may seem a tiny bit more costly up front but they are more reliable and better for your cash flow.
  • Analyze your payment fees. Once you know how they’re structured, you can plan your finances more easily.
  • Make sure your contract insulates you from fee increases. Otherwise your rate can change at any time.

Speed and security

After your customers have enjoyed their meal, they want to be able to get on with their day. Choose a processing system that allows them to pay quickly and conveniently by using contactless payment, Apple or Android pay where appropriate.

Needless to say, the more security assurances you can provide your customers, the more value you can generate for them so make sure you know what your system’s data security provision and fraud protection measures are.

Leveraging restaurant analytics

Next generation processing solutions have a number of cool built-in features which can help you to better track your restaurant’s performance. For example, some can leverage analytics to identify which diners are returning guests and which are brand new customers.

Loyalty programs

Finally, a great loyalty program can see repeat customers coming back to your restaurant time and time again. Many next-generation processing solutions will enable you to enact customer rewards by putting funds back on a diner’s card after the transaction has gone past a certain cash value.