Restaurant owners, whether from family-run small businesses, local chains, or large corporations, have a passion for building their businesses through serving others. Food is life, as the saying goes. But it’s nearly impossible to grow your business, provide exceptional customer service, and run a streamlined operation without the best restaurant credit card processing solutions.

It’s one thing to offer exceptional, mouthwatering, unforgettable cuisine, but if accepting payment for your indulgences proves difficult, your food might not be worth it to many consumers. By finding innovative payment systems, the right merchant tools, and a payment processor that cares about your growth, you will be on the track to a successful business for years to come.

This article is catered to business owners looking to spice up their restaurant credit card processing solutions and find the best system out there to meet their unique needs.

What is Merchant Credit Card Processing?

Restaurant merchant credit card processing solutions means that businesses are able to accept credit cards and debit cards for payment with a provided service. Accepting plastic payments beyond the scope of just cash or check opens up a world of new possibilities for merchants. However, in order to accept digital payment, rather than paper, merchants must sign up to have a merchant account with a payment processor.

What is the Role of a Merchant Processor?

A merchant’s payment processor is the connection between the credit card networks, the issuing banks, and the merchant’s account. Without payment processing services, there would be no way for a merchant to accept digital transactions in-store, or online.

Restaurant Credit Card Processing: How it Works

Credit card processing for restaurants is the same idea as credit card processing in pretty much any other type of retail situation. The main difference is the vast variety of platforms that restaurants can use due to the way that each type of restaurant is set up.

For general retail, you have in-store or eCommerce. For service industries, you have mobile payments, ACH, and more. 

However, with restaurants, you can have any number of these types of structures or all of them combined depending on the business. Meaning, a restaurant can serve its guests in the following structures:

  • fast-food 
  • fast-casual
  • dining 
  • fine dining
  • pick up 
  • delivery
  • food trucks
  • catering
  • Pop-up 
  • etc

This means that customers are paying either at the counter, in the drive-through, at the table, online, over the phone, or the server takes the card and completes the transaction behind the scenes. 

In many cases, there are restaurants that offer multiple ways to pay for their customers, meaning they can choose to dine in and pay at the table, call via the phone, or order online, and pick up their order to go. 

What Types of Payment Solutions Are Available For Restaurants?

With so many different structures for restaurants, there needs to be a variety of payment methods available to choose to accept credit card payments. Below, we will go over the ___ most common ways that restaurants can accept credit cards from their customers. All of which the right payment processing provider will offer once approved for a merchant account. 

Payment Gateway

First thing first, to facilitate any type of digital transaction, a merchant will utilize a payment gateway with their merchant account. The payment gateway is a digital bridge that allows payments to move from the customer to the business. 

A payment processor will provide the gateways to move the received payment information from the cardholder’s issuer to the merchant’s acquiring bank.  

Though a payment gateway is a virtual concept, it is still attached to both virtual and physical payment processing systems such as the ones described below. 

POS Systems

Traditionally, the most common credit card payment solution was and still is the POS system. A POS system not only is attached to physical card readers, but it can also be linked with a virtual terminal online. Furthermore, POS systems even offer additional business tools such as:

  • Order management
  • Customer relationship management
  • Inventory tracking
  • Gift card options
  • Employee management
  • Transaction reporting
  • Business Analytics
  • Marketing tools

Stationary Card Terminals 

Now, with a POS system merchants will have either or both, a stationary or wireless card reader (or terminal). A stationary terminal would stay in one place. Typically, this would be best for over-at-the-counter restaurants. Counter-service restaurants could include fast casual dining, fast-food/drive-through, food trucks, and the like.

A stationary POS system terminal would also be used in some restaurants. Ones where the server will bring the black check presenter to the table, wait for the customer to put their credit card in, and take it to the back to run the transaction.   

Wireless Card Terminals

Wireless card terminals, on the other hand, are more flexible. Servers can bring wireless terminals to the customer. It’s popping up more and more at sit-down restaurants. The diners will finish their meal and rather than the wait staff bring the check presenter, they will simply present the payment terminal to them. 

The customer will still get a breakdown of the details of their costs for their beverages and food. Then, they will enter their card into the terminal. No need to wonder how long the server will be with their card in the back and what they may do with full access to those sensitive details. 

Implementing wireless terminals into your restaurant is a great way to reduce customer hesitation and the risk of fraud

Online payments

Our last restaurant credit card processing solution is online payments. Though restaurants are not an eCommerce type of business, online payment processing for food actually makes a lot of sense. 

Especially with the aftershock of the COVID-19 pandemic, contactless payments took on a vital role. Customers wanted to pay for their meals with little to no contact with staff and terminals. And the payments industry made that possible. 

Online payments allow for contactless transactions and can take many shapes depending on how each restaurant offers them. Online payments occur via a virtual terminal. A virtual terminal is an online terminal where customer and card information is keyed in, rather than swiped, dipped, or tapped. 

But getting to a merchant’s virtual terminal can be a few different processes. The first is simply manually navigating to a restaurant’s website via a smartphone or a computer. Once an order or reservation has been placed online, the website will direct the customer to a payments page, or in other words, the virtual terminal, to complete the transaction. 

Another way to navigate online payments is through exclusively mobile payments. Yes, a merchant’s website can be accessed via mobile phone. But, QR codes and tap-to-mobile payments are only available with smart devices. 

QR codes

QR codes are small black and white patterned squares that merchants can print at the bottom of checks. From there, a customer would open their smartphone’s camera app and hover over the QR code image until a link pops up on their screen. The customer then clicks on the link and is directed to the merchant’s virtual terminal. 

QR codes can be used for more than just payments. Printed onto anything, a QR code can direct a smartphone user to any link that a merchant would like. Such links could also include the menu, a discount code, the reservation list, the homepage of the restaurant’s website, and more. 


Tap-to-mobile technology transforms a restaurant’s smart device like an iPad or a cell phone into a wireless terminal. And like contactless terminals, NFC-enabled phones allow contactless payment from one smart device to another. 

So, rather than offering third-party apps to customers to transfer funds to digital wallets or using a third-party mobile card reader that is plugged into the device, a restaurant’s staff can use an app installed in a company phone, and have the customer simply hover their device (with a mobile wallet open) to pay the restaurant directly into their merchant account. No third-party devices or digital wallets are required. 

What Are Credit Card Processing Fees For Restaurants?

Now that you have been informed of the best restaurant credit card processing solutions, it’s probably the right time to go over restaurant credit card processing fees. With all this technology, there are obviously suppliers and facilitators involved to make it happen. And of course, nothing is free. There are costs that restaurant merchants incur when they decide to accept credit card payments. 

Restaurant merchant credit card processing fees may include, but are not limited to:

  • Interchange fees
  • Authorization fees
  • Transaction fee 
  • Assessment fees
  • Equipment fees
  • Monthly fees
  • Chargeback fees
  • etc

Are Credit Card Processing Fees Worth it?

So is it worth it? Why pay money to accept money? It’s a good question, but the answer is yes, it is worth it. If a restaurant were to only accept cash, the number of customers lost would be outstanding. Sales would decrease. Profits would plummet. 

Why? Well because cash is inconvenient. 41% of Americans do not use cash to pay for anything. Most don’t even carry it with them. Cash takes up more room in wallets and when broken up to pay for goods and services, change is created. 

No one wants to carry around, not count their change to make exact purchases. Cash is easily lost and there is no way to track it. Cash also offers no rewards. This is why credit cards have the upper hand. 

Credit card issuers offer perks, rewards, and incentives every time a cardholder makes a purchase. These rewards can be cashed in for money to their account, gift cards, or travel incentives. Therefore, it is important for your restaurant to offer ways for your customers to pay for their food with their credit cards. 

Who Charges Processing Fees?

When it comes to credit card processing fees for restaurants, there is a trickle-down effect. Everyone who has anything to do with the process has their hand in the pot. You have your card brands (Visa, Mastercard, American Express, Discover), your issuing banks, your payment processor, and your merchant service provider. 

The merchant service provider connects the restaurant to their gateway and terminals and has a direct relationship with the processors and banks. The processors and banks have direct relationships with the card brands. So each entity has fees that they charge to restaurants that are using their services. 

For example, a restaurant would pay card brand assessment fees, interchange fees, transaction fees, and monthly statement fees. These fees pay one or all of the entities, depending on who trickled down payment to who and who marked it up to make more money off their services from the restaurant. You may think you are just paying your merchant service provider, but really, they are paying everyone involved in the transaction process.

How Much Are Processing Costs?

There are no absolute or average credit card processing fees for restaurants. How much a credit card company charges a restaurant depends on the pricing model that they offer and the interchange rate of each card. Unless the payment provider charges a flat rate for all of their merchants.  

For example, Square payments charge 3.5% of each transaction plus a $0.15 per transaction fee. So if a restaurant ran a payment for $100. They would pay Square $3.65 of the $100 dollar transaction. If it was a $10 transaction, the restaurant would pay $0.50. 

But every provider charges different rates. Such as 2.5% plus $0.10 transaction fees, or they may have a more transparent pricing model called interchange plus pass-through. Which is basically charging the exact cost of the card to the restaurant plus a per transaction fee. (More on this below).

How Are Credit Card Processing Fees Calculated?

The first thing that goes into consideration when it comes to determining credit card processing fees per provider is the interchange rate. The interchange rate is the cost associated with each individual card through each individual card brand. So in reality every transaction incurs different costs. 

For example, a Gold American Express card may cost more to process than a standard Visa card. So payment providers charge merchants enough to cover these costs plus an up-charge to make a profit off of the facilitation services. 

The good news is each card brand offers clear access to their continually changing interchange rates. You can take a look at them here:


As we mentioned before, some payment providers charge a flat-rate. Meaning it’s a constant rate. So whether the interchange is higher or lower for a certain card, the flat-rate never changes. Thus the merchant may be losing out on lower interchange rates for some cards, but may be lucking out if their flat-rate is lower than the higher interchange of other cards. 


Tiered pricing uses the interchange rate plus additional factors that would affect the riskiness of the transaction. The four pricing tiers are:

  • Qualified
  • Rewards
  • Mid-Qualified
  • Non-Qualified

 The risk factors that determine the qualification category might be:

  • The sale location 
  • Card-present vs card-not-present
  • The card level (rewards, business, etc)
  • Credit vs. debit 
  • The captured cardholder data (name, address, etc)
  • The amount of time lapsed between the authorization and the settlement

Interchange Plus Pass Through

Then there is interchange plus pass-through. This is the most transparent of all pricing structures. Payment providers who offer interchange plus pass-through charge the restaurant the exact cost of the specific card’s interchange rate, plus an additional fee, to make a profit off of facilitating the transaction.

What is a Good Processing Rate?

Good processing or effective rate is really dependent on a specific merchant’s needs. Processing rates can vary between 1.5% and 3.5%. The per transaction fee can vary from $0.10 to $0.20. If you find a payment processor on the lower end of these scales, you’re off to a great start. 

But remember, interchange rates always vary based on the card. So if you are on an interchange pass-through structure, be aware you may pay both the lower and the higher end of the interchange scale, but you will never overpay for something that costs less. 

Can You Pass Credit Card Processing Fees to Customers?

In many cases, yes! You can pass your merchant fees onto customers with credit card surcharges. Surcharges are fees that merchants charge their customers at checkout should they decide to make a payment with a credit card. It’s basically a convenience fee that the merchant charges, but the fee is to cover the cost the merchant incurs from accepting that form of payment.

However, before implementing such strategies, there are certain rules that merchants need to be aware of. For example, surcharges are not allowed in certain states. Additionally, merchants are not allowed to charge a higher surcharge than the actual cost of the processing fees. It is important to be aware of all surcharge rules and how they might affect the relationship between you and your customers before implementing them in your establishment. 


Restaurant credit card processing is similar to that of other retail processing. But depending on your restaurant, you have options on how and where to collect your digital payments. Be sure you speak to different providers about what restaurant credit card processing solutions they offer and the different fee structures you can choose from.