Are you paying too much in restaurant credit card fees?

Robert Peterson, AVP, New Business North America

Running a restaurant isn’t cheap; one of the most important (and confusing) expenses restaurant owners deal with is credit card processing fees. While it’s not impossible to manage card payments on your own, most businesses choose to work with a payment processor provider to handle credit card transactions.

A payment processor provides merchants with payment terminals and hardware that allow businesses to accept payments. However – there are several different types of credit card processing and each comes with their own hidden fees. How can you know if you’re paying too much in credit card fees and what can be done to simplify payment processing for your business?

How are restaurant transaction fees determined?

How much your restaurant pays in total fees is determined by the payment gateway, credit card processor, credit card association, and the issuing bank. Everything from the size of your business to the number of transactions you plan on processing can drastically impact processing rates.

Most processors offer one of the following pricing models:

  • Flat-rate pricing: the credit card processor charges one flat rate for any and all credit card transactions. With flat-rate pricing, the merchant pays a flat fee with a fixed percent per transaction added on top (e.g., 2.7% + $0.19 per transaction).
  • Interchange-plus pricing: the credit card processor charges a fixed markup fee based on the interchange fee charged by the card associations (Visa, Mastercard, etc.) and then add the fees taken by your merchant services provider.
  • Tiered pricing: the credit card processor asseses each transaction and charges fees based on the “type” of transaction that took place. High-risk transactions, such as charges made with corporate cards, high-reward credit cards, and card-not-present transactions are charged higher fees than qualified transactions.

 

Most Common Types of Credit Card Fees

Regardless of which pricing model you choose, most restaurant fees will fall into one of three categories: transactional fees, flat fees, and incidental fees. Together, these fees compromise the total cost of your merchant account and can show you how much you'll pay monthly.

Run Your Restaurant Like a Well-Oiled Machine

An easy-to-use restaurant management system allows you to run your establishment like a well-oiled machine. It will enable you to track your cash flow, monitor your inventory, and manage your employees. Simply put, an RMS can help you develop a robust and streamlined workflow for your restaurant. Hence, you can serve your customers better while protecting your business’s bottom line. When you consider these features, it will be easy for you to choose a system that will suit your restaurant’s needs.

  • Transactional Fees: refer to fees that your business incurs anytime you complete a credit card transaction; it’s normally the responsibility of your payment processor to handle these fees.
  • Flat Fees: refer to fees are issued by your payment processor and will vary depending on which provider you choose; it’s common to negotiate these fees before signing your contract.
  • Incidental Fees: refer to fees that you're charged by your payment processor or merchant account provider as a result of specific occurrences­like in the case of fraud, chargebacks, or insufficient funds.

Most businesses view their payment processor as a small piece of their larger tech stack; when in reality your choice of payment provider can make or break your customer experience. Slow transactions, technology issues, and hidden fees; choosing the wrong payment processor for your restaurant can be detrimental to your brand.

Examples of Credit Card Fees

While credit card fees are the biggest issue on most restaurateurs' minds when it comes to payment processing - there's also the hidden cost to your back office. How much time (and money) is lost every day to credit card disputes and working with your bank over phone?

  • List of others/hidden charges: Set-up Fee, Installation Fee, Payment Gateway Fees and PCI Compliance Fees
  • Annual Fees: Early Termination Fees, Monthly Fee, Monthly Minimum, Statement Fees, Terminal Lease and IRS Report Fees (1099k issuance)
  • Online Reporting Fees: Association Fees and Cancellation Fee
  • Chargeback/dispute: Address Verification Service (AVS), Voice Authorization Fee (VAF), Retrieval Request Fee, Batch Fee and Non-Sufficient Funds Fee
  • Oracle charges only Flat Fee per transaction

The Benefits of Oracle Payment Cloud

There is a direct correlation between the functionality of your payment processor and your business's ability to scale locations and explore new revenue channels. Integrating your payment processing with your POS system gives you a single payment solution for curbside pick-up, delivery, in-person dining, and self-ordering kiosks. With Oracle Payment Cloud managing both your POS and your payment solution, you can eliminate the back and forth between vendors, eliminate costly credit card fees, and streamline your payment processing.

  • Transactional Fees: refer to fees that your business incurs anytime you complete a credit card transaction; it’s normally the responsibility of your payment processor to handle these fees.
  • Flat Fees: refer to fees are issued by your payment processor and will vary depending on which provider you choose; it’s common to negotiate these fees before signing your contract.
  • Incidental Fees: refer to fees that you're charged by your payment processor or merchant account provider as a result of specific occurrences­like in the case of fraud, chargebacks, or insufficient funds.

Most businesses view their payment processor as a small piece of their larger tech stack; when in reality your choice of payment provider can make or break your customer experience. Slow transactions, technology issues, and hidden fees; choosing the wrong payment processor for your restaurant can be detrimental to your brand.

Benefits of Oracle Payment Cloud

 

Fast and secure checkout experience

Oracle Payment Cloud Service supports all major credit card providers and digital payment methods. Our payment acceptance devices fit all of your card present sales channels including counter-top, kiosk, mobile pay, and tablet.

Payment methods accepted:

  • MasterCard
  • Visa
  • American Express
  • Discover
  • UnionPay
  • UCB
  • Diners Club International
  • Apple Pay
  • Samsung Pay
  • Google Pay

You will also get peace of mind knowing our devices are enabled with EMV technology which shifts liability for fraud and chargebacks away from your business. Oracle also handles any chargeback disputes your restaurant may deal with. When a chargeback is issued for a purchase – you can rely on a dedicated member of our team to manage the entire dispute process on your behalf.

 

Workstations and Payment Accessories that fit your business needs

Oracle workstations run on Simphony and can easily stand up to the hustle and bustle of a busy restaurant environment. Whether you’re dine–in only or you’re expanding your reach to new digital channels, you can easily accept payments with Oracle workstations and hardware.

Workstations come ready to work with cash drawers, EMV credit card readers, receipt printers, barcode scanners, and other payment accessories from a wide variety of third-party vendors. Our one for onehardware offer gives you the ability to expand Simphony's reach across your restaurant properties without a significant upfront investment.

 

Oracle MICROS Simphony + Payments = Your Restaurant in a Box

Choosing Oracle as your payment processer ensures your entire POS technology stack work together. No more worrying if your hardware accessories from one vendor are compatible with your new POS software. The end-to-end restaurant experience starts and ends with Oracle’s full-service restaurant POS solutions.

Oracle is removing the guesswork from payments by offering a fixed percentage fee + per transaction fee, with no monthly payments for the service. Oracle customers can add payments to a current Simphony subscription today and access our new simplified, end-to-end payments solution all under a single contract.

Oracle is removing the guesswork from payments by offering

  • Fixed percentage fee

    with no monthly payments for the service

  • Flexible pay-as-you-go model

    with no monthly payments for the service

Our competitive fixed-rate pricing means you never have to worry about how much you’re really paying per payment. No multi-year contracts or exorbitant fees for canceling your contract, you can pause, stop, or cancel your Oracle Payment Cloud Service at any time without incurring a single penalty or cancelation fee.

 

Looking Forward with Oracle

Oracle Payment Cloud Service is an affordable addition to your Simphony subscription. Our product experts are excited to work with you on switching to Oracle MICROS Payment Cloud Service.