The Ultimate Guide to Payment Processing for Restaurants

Running a restaurant business involves handling many moving parts - managing inventory and suppliers, hiring, and training staff, maintaining facilities, and, most importantly, ensuring a smooth dining experience for customers. 

 One critical behind-the-scenes task that greatly impacts the customer experience is payment processing through an optimal payment gateway. Choosing the right payment gateway solution can make transactions seamless, while the wrong one can frustrate diners and hurt your bottom line.

What is a Payment Processor & How Can it Help Restaurants Accept Payments?

A payment processor is a company that handles credit card processing for businesses. They act as intermediaries between the merchant (restaurant), customer, and payment networks like Visa and Mastercard to authorise and settle credit card transactions. 

 For restaurants, the major benefits of using a payment processor include:

 ➔ Smooth transactions: Processors securely handle all technical aspects of transaction processing. Restaurants don't have to worry about connecting to payment gateways.

➔ Fast settlements: Cash from credit card sales gets credited to the restaurant's bank quicker, improving cash flow.

➔ Fraud prevention: Processors use advanced tools to detect and prevent fraudulent transactions. This saves restaurants from losses.

➔ Multiple integration options: Processors offer seamless integration with POS systems, online ordering platforms, reservations systems, etc.

Types of Payment Processors for Restaurants

Restaurants have access to different types of credit card processors. Choosing the right one depends on transaction volume, average ticket size and other specific business needs. The main types are:

Merchant Accounts 

This is the traditional processor model where the restaurant has a direct contractual relationship with a payment processor and acquiring bank. The processor handles the funding of merchant accounts and the settlement of transactions. This offers seamless reconciliation and good pricing for mid to large-volume restaurants. 

Payment Facilitators

Here, the restaurant does not directly have a merchant account but pays a payment facilitator, which handles underwriting and settlement. Facilitators aggregate payments before sending them to processors, making them ideal for small cafes and quick-service restaurants with lower ticket sizes. They have simple pricing and quick setup but higher transaction fees.

Mobile Processors

These modern payment processors offer proprietary card readers that connect to smartphones or tablets to swipe credit cards on the go. They are suited for food trucks and delivery-based restaurants. They provide strong analytics and reporting capabilities, but equipment costs are higher.

E-commerce Payment Gateways 

Online ordering and delivery are becoming ubiquitous across the restaurant industry. Gateways allow customers to pay securely via the restaurant's website or app. They integrate easily with popular website builders and shopping cart systems but have additional fraud protection costs.

What Should a Payment Gateway for Restaurants Have?

The right payment gateway can optimise the entire payment processing experience for restaurants. Here are some must-have features to look for in a restaurant payment gateway:

 ● EPOS (Electronic Point of Sale) - The payment gateway should seamlessly integrate with a restaurant's electronic point of sale system. This allows servers to input orders automatically sent to the kitchen and bar easily. When it comes time to pay, the bill can be accessed via the POS, and payment can be instantly processed through the integrated gateway. This creates a smooth, efficient dining experience.

● Payment Links - The gateway should allow restaurants to easily create and send payment links to customers via email or SMS. This allows customers to pay their bills remotely without closing out at the restaurant. It's very convenient for takeout orders or even dine-in scenarios where the customer needs to step away but wants to settle the bill beforehand.

● Split Payment Gateway - In situations with separate checks or bill splitting, the gateway should support easy dividing the total bill amount. Diners can pay individually according to their consumption share via multiple cards/payment modes. This removes bill payment friction for group dining scenarios. The gateway should also allow card linking for seamless payment.

Conclusion

A streamlined payment processing flow is critical for delivering great guest experiences in a restaurant. Investing in the right payment gateway or processor tailored to the restaurant's needs can maximise convenience, security, and savings from credit card transactions. With costs coming down and offerings getting more diversified, nowadays, there are compelling options for restaurants of every size and type to take their payment game to the next level. 

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