We don’t talk about payment processing very often, but it’s definitely an overlooked aspect for restaurant owners that greatly affects their business.
Searching for a credit card processing provider is a pain, and pouring over different companies for decent rates is tiring.
As tempting as it is to focus your attention on only one price point, there are two other important factors restaurant owners tend to overlook when selecting a credit card processing provider.
Instead of looking solely at percentages, try looking at these two other vital price points.
One of the biggest processing misconceptions is that percentages are the most expensive part of credit card processing. For restaurants and bars, you need to watch out for what your per-transaction fees are. Because they can add up quickly if you are mainly running small ticket items.
Think about it, if your average ticket item is $7-$20, then a per-transaction fee is going to have a large affect on how expensive your total credit card processing bill will be at the end of the month.
Fine dining restaurants that average meal tickets of $100-$200 will not have to worry as much about their per-transaction fee.
Now a lot of POS systems will require a gateway fee. This is not unusual, and doesn’t mean the credit card processor is ripping you off.
However, you shouldn’t let the gateway fee be ridiculous. There are different ways gateway fees are charged across different providers, some charge a handful of cents per transaction. Others have a tiered pricing model that is tied to the number of transactions you run on a monthly basis.
It doesn't really matter what model they use, what matters is the cost to you. Do the math, and figure out your cost. We have seen gateway fees that end up approaching the same total costs as the credit card processing fees which is much higher than it needs to be.
We at BNG Point-of-Sale offer support through our sister company BNG Holdings, Inc. that provides a reasonable gateway fee for our POS systems.
Finding other companies to do this may be challenging, and finding a good company to do this is a tall order.
A final thought on calculating costs. When you’re searching for a payment processing provider, it’s important not to get caught up in only one price point.
All costs need to be taken into consideration. Don’t ignore per-transaction fee, or gateway fees. Especially don’t fixate only on your percentage rates.
If you’re curious about our POS and credit card processing services, read our free case study about one restaurant's success with their credit card rates.