Credit card processors and merchant services providers enable restaurants to accept credit, debit, and contactless payments. 74% of customers pay with credit or debit cards at dine-in restaurants, and 81% of restaurant transactions are cash-less. So, to remain profitable, restaurants need a restaurant credit card processor that offers a competitive processing rate.
When considering your restaurant credit card processing options, you’ll hear the terms merchant services and credit card processor used interchangeably. Both terms describe the same thing in a different way.
The best restaurant credit card processing and merchant services are:
- Dharma Merchant Services: Best overall restaurant credit card processor
- Payment Depot: Best for high-volume restaurants with a high check average
- CDGcommerce: Best low-fee for small to medium-sized restaurants
- Fattmerchant: Best for cash-flow management
- Square: Small restaurants looking for an all-in-one payment solution for POS and online payments
- Toast: Best in-built restaurant POS credit card processing
How to Choose a Restaurant Credit Card Processor
Restaurants handle a majority of payments on-site and can process hundreds of payments in a day. So, getting the best rate for your restaurant is important. You’ll also want to consider elements like:
- Cost: The rate you pay per each transaction will be your biggest cost. You want a contract that clearly states that your fees will not increase. You’ll also want to consider any hidden fees.
- Startup fees and monthly minimums: Many processors charge a monthly or yearly fee for maintaining your account. They can get as high as $99 a month. Some processors will also charge you the difference if your transactions fall short of a pre-set minimum.
- Types of payments accepted: Beyond just the types of cards accepted, restaurants must consider the availability of contactless payments, pay at the table options, as well as online payment processing.
- Available hardware: Some credit card processors will include a free card reader when you sign on, but you may prefer to bring your own equipment.
- Speed of funding: The typical turnaround time from processing a credit card to seeing the funds hit your bank account is two to three days. The faster you receive funds from your payment processor, the more streamlined your business will be.
- Contract length and cancellation fees: If you need to cancel your contract, you want to make sure the cancellation fee is a flat rate, not a variable rate. The best credit card processors do not charge hefty cancellation fees, if at all.
- Integrations: Your payment processor should directly integrate with your point-of-sale (POS).
Based on these criteria, we found that Dharma Merchant Services is the best overall payment processor for the widest array of restaurants. Dharma offers flat rate processing at low industry rates that support independent restaurants of all sizes. In lieu of nickel and diming users with batch fees, statement fees, and the like, Dharma offers its service for a low $20 monthly membership fee, with no long-term contract and no expensive equipment leases.
Dharma Merchant Services: Best Overall Restaurant Credit Card Processing
Dharma Merchant Services offers payment processing solutions for bars and restaurants of all sizes. Its PCI compliance, mobile payments, and next-day funding options make Dharma a great fit for tight-margin restaurants concerned about cash flow. Dharma’s monthly fees start at $20 with a transaction rate of 0.15% plus 7 cents, plus interchange.
Dharma Merchant Services Strengths
Dharma Merchant Services Weaknesses
Reduced processing rate for high volume restaurants
Not ideal for low-volume restaurants
Next-day funding available
Doesn’t support high-risk restaurants
Low monthly fees
Customer support is not 24/7
Dharma Merchant Services Pricing
Dharma Merchant Services comes at a low monthly fee of $20, with transaction fees starting at 0.15% plus 7 cents per transaction, plus interchange. However, restaurants that process over $100,000 per month can get a reduced transaction fee of 0.10% plus 5 cents per transaction. For an additional $10 per month, you can access Dharma’s MX Merchant platform that acts as a virtual payment terminal, allowing you to process mobile payments and store customer payment information (a great option for high volume caterers).
You can purchase EMV terminals and pin pads directly from Dharma Merchant Services, though they do not offer equipment leases. Prices range from $95 for a handheld card reader to $499 for a Clover Mini POS terminal. Dharma also charges a $25 fee for chargebacks, which is on the low-end of the industry standard.
Dharma Merchant Services Features
Dharma integrates directly with popular restaurant POS systems like Upserve, Revel, and ShopKeep. Since Dharma operates on the Fiserv and TSYS platforms, any POS system that works with Fiserv or TSYS should support Dharma Merchant Services. Dharma’s website offers troves of information for customers, including detailed outlines of their application requirements and a massive catalog of card readers and payment terminals.
Dharma Merchant Services is well-reviewed by users and offers customer support via phone and email Monday through Friday from 8 a.m. to 5 p.m. Pacific time. It also offers a comprehensive support database that is accessible 24/7 on its website.
What Dharma Merchant Services Is Missing
Restaurants that process less than $10,000 per month in sales will struggle to get approved for a merchant account with Dharma. Restaurants that sell ingestible CBD items may also be declined for being too risky. While Dharma’s customer service is well-reviewed, it would be nice to have phone support on nights when weekends, when restaurants are busiest.
Payment Depot: Best for High-Volume Restaurant Payment Processor
Instead of offering merchant services with various percentage-based markup fees for online, in-store, and virtual terminal payments, Payment Depot covers everything with a subscription fee and a single transaction fee. There are no setup or cancellation fees, and every account comes with a free payment gateway and free reprogramming of any existing equipment. This transparent and flexible pricing structure makes Payment Depot one of the cheapest credit card processors for established businesses, including restaurants.
Rates start at $49 per month and interchange plus 15 cents per transaction. This higher monthly fee makes Payment Depot a good fit for higher-volume establishments.
Payment Depot Strengths
Payment Depot Weaknesses
Simple, flat-rate subscription model
Not ideal for seasonal restaurants
Great savings for high volume restaurants
Very small restaurants may spend more
No hidden fees
Not the best fit if you process less than $20,000 per month
Payment Depot Pricing
Payment Depot offers four subscription tiers. Its model combines all your monthly fees into a single monthly membership ranging from $49 to $199 per month, depending on your sales volume. Its flat per-transaction fee ranges from 5 cents and 15 cents on top of the interchange rate charged by card-issuers.
Monthly Sales Volume
Up to $25,000
Interchange + 15 cents
Interchange + 10 cents
Interchange + 7 cents
Interchange + 5 cents
For hardware, Payment Depot includes free card readers with all but the Basic membership. You can purchase a wide variety of card readers, pin pads, and even a full POS terminal via the Payment Depot website. Pricing for baseline readers starts at $99.
Payment Depot Features
On the back-end, Payment Depot operates on the Fiserv and TSYS networks, though most Payment Depot subscribers find that they get much lower processing rates through Payment Depot than they could obtain by working directly with Fiserv or TSYS. All Payment Depot merchant accounts are month-to-month, though you can get a discount if you are willing to pay annually.
If you opt for an annual membership, you will be offered a 90-day satisfaction guarantee. If after those first three months you aren’t happy with Payment Depot, it will refund your membership fees. Payment Depot advertises that it integrates with most restaurant POS systems, but it doesn’t provide a comprehensive list on its website. Like Dharma Merchant Services, Payment Depot should integrate with any POS that works with Fiserv and TSYS.
What Payment Depot Is Missing
High-volume and high price-point restaurants will definitely save money on credit card processing with Payment Depot. Since your restaurant is on the hook for subscription fees even if you have a slow month, Payment Depot is not a great fit for low-volume or seasonal restaurants.
CDGcommerce: Best Small to Medium-Sized Restaurant Payment Processor
CDGcommerce offers a wide array of subscription tiers to support a variety of restaurants. Small restaurants that process less than $10,000 per month get a flat-rate transaction fee. Higher-volume restaurants qualify for a monthly membership with flat interchange-plus fees. CDGcommerce’s prices are listed transparently, and it has no hidden fees. Pricing starts at $19 per month with transaction rates of interchange + 0.25% + 10 cents.
Memberships are month-to-month
Doesn’t integrate directly with the most popular restaurant POS systems
Multiple pricing tiers support different size restaurants
Bars and restaurants that sell CBD products may be classified as high-risk
Offers direct integrations with POS and reservations systems
Best rates only available if you pay 12 months worth of monthly fees upfront
CDGcommerce offers three different pricing structures, depending on your restaurant’s sales volume. For restaurants that process $10,000 or less per month, CDGcommerce offers a flat rate:
- 2.75% + 30 cents per transaction for swiped, dipped, or tapped in-person transactions
- 2.90% + 30 cents per transaction for manually entered, online, and card-not-present transactions
Midsize restaurants that process anywhere from $10,000 to $200,000 per month may be offered interchange plus rates. These rates also come with a monthly subscription fee that ranges from $19 to $49 per month, depending on whether or not you need an online payment gateway or additional security features. The transaction fees for midsize restaurants are:
- Interchange + 0.25% + 10 cents per transaction for swiped, dipped, or tapped in-person transactions
- Interchange + 0.30% + 15 cents per transaction for online and card-not-present transactions
High-volume or high price-point eateries that process more than $200,000 per month will be offered CDG’s membership based fees along with a flat, interchange plus rate. Though, to lock in the lowest of these rates, restaurants must pay for their entire years’ worth of monthly subscription fees upfront.
Monthly Sales Volume
Up to $75,000
Interchange + 10 cents
Interchange + 7 cents
Interchange + 6 cents
Rather than leasing or selling card readers to its users, CDGcommerce includes an EMV and NFC-compliant card reader for all subscription levels at no additional cost. However, you will be on the hook to pay the $79 per month to insure the equipment. It also charge a $25 fee for chargebacks, which is industry standard.
In addition to its flexible subscription structure, CDGcommerce offers well-reviewed 24/7 technical support. Its processor allows for easy tip-adjustments and integrates with restaurant POS software. In addition to POS, however, CDGcommerce integrates with reservation software, which can allow you to process deposits or cancellation fees directly from your reservation system rather than transferring the information to your POS.
During the onset of COVID-19, some restaurants added meal kit subscriptions as an additional revenue stream. Some payment processors classify this type of recurring payment processing as high-risk, but with enrollment in its PastePay program ($199 per year) CDG fully supports recurring payment structures like this. PastePay also includes tools for appointment scheduling, online store, and electronic gift cards.
What CDGcommerce Is Missing
CDGcommerce only integrates with a few restaurant POS systems, mostly lower-cost locally installed systems like Harbortouch, Restaurant Manager POS, POSitouch, and Future POS. If you are using a more streamlined hybrid or cloud POS, CDGcommerce may not integrate. To lock in the best rates, you should be prepared to pay all monthly subscription fees on an annual basis.
Fattmerchant: Best Restaurant Merchant Services for Cashflow
Like Payment Depot and CDGcommerce, Fattmerchant offers subscription-style, flat-rate credit card processing. Unlike its competitors, Fattmerchant offers same-day funding. Monthly fees start at $99 per month + 8 cents per swiped, tapped, or dipped in-person transaction.
Same-day funding options
Not a fit for small restaurants that process less than $10,000 per month
Excellent customer service
Does not provide complimentary or leased equipment
Integrates with 99% of restaurant POS systems
Not an all-in-one platform
Fattmerchant offers a truly straightforward fee structure. Fattmerchant does not charge any cancellation fees, statement fees, or batch fees. Customers pay a monthly subscription fee based on their sales volume, with a flat rate per transaction fee. There is no percentage mark-up or complicated math to figure out what your rates will be.
Annual Sales Volume
Less than $500,000
Interchange + 8 cents
Interchange + 6 cents
Fattmerchant sells several options for card readers via its website. They do not lease equipment or provide complimentary equipment.
In addition to basic payment processing, Fattmerchant offers several features to streamline online or advance payments. You can create a simple webform to accept credit cards online. Restaurants with a catering arm or recurring clients will appreciate the ability to securely save client credit cards, download payment reports, and integrate with QuickBooks. This platform also supports credit card payments made by scanning a credit or debit card with smartphone cameras.
What Fattmerchant Is Missing
The only major pitfall to watch out for with Fattmerchant is that the services are priced individually. This means that paying for a baseline membership to process in-person payments counts as one subscription. If you want to add online payments or invoice payments, you may need an additional subscription, which can double or triple your costs.
Square Payments: Best Payment Processing for Small Restaurants
Most of the providers on this list focus on medium to high volume restaurants that process $500,000 or more annually. Smaller seasonal restaurants, local caterers, or food trucks that fall short of that number will be better served by Square Payments. This familiar payment processing platform offers in-person and online payment processing to any business with a Square account. Pricing starts at just 2.6% + 10 cents for in-person transactions.
Because Square is ideal for new and small businesses, it’s also one of our top picks for best merchant services for small businesses.
Square Payments Strengths
Square Payments Weaknesses
Integrates with Square for Restaurants and Square Online
Funds can take 2–3 days to hit your account
Operates on payment terminals or smart devices
Unexpectedly large transactions are subject to holds
Flat-rate fees are clearly listed
Flat rates are a bit higher than industry-specific processors
When you look at Square’s pricing, you’ll notice the absence of a common payment processing word, “interchange.” That is because Square’s fees are truly flat rate. Square doesn’t charge different rates for different credit cards. Visa, Mastercard, Discover, and American Express are all processed at the same rate. The only variable in Square’s rates is whether the card is present, manually entered, or processed online.
Tapped, dipped, and swiped in person payments
2.6% + 10 cents
2.9% + 30 cents
Manually-keyed, card-not-present and card-on-file payments
3.5% + 15 cents
Square offers a free magstripe reader to Payments subscribers. You can also purchase Square-enabled card readers outright or with an installment payment plan from the Square website.
Square Payments Features
Signing up for Square’s payment processing is as simple as creating an account on its website and attaching your bank account. You can process payments via any smart devices from mobile phones to an iPad or Android tablet. Square users also have the entire Square ecosystem—which offers solutions for invoicing, delivery management, an online store, online ordering, and the full-spectrum Square for Restaurants POS—at their fingertips.
If you are considering Square Payments for its easy integration with other Square products, you can get a free trial of most any feature on the Square platform. Both the Square POS and Square for Restaurants POS also offer a completely free baseline membership.
What Square Payments Is Missing
High volume and high price point restaurants will see more savings with other providers. If your business grows quickly, or you have an unexpectedly busy week, you may experience longer than usual fund holds from Square. For small restaurants or operations like food trucks, however, Square is an excellent fit.
Toast: Best Built-In Restaurant POS Credit Card Processor
Toast’s payment processing is a bit different from the other on this list. This payment processor is only available on the Toast POS system. Like Square, Toast operates with flat-rate transaction fees and does not charge hidden fees like batch processing and statement fees that mass-market processors rely on. Unlike others on this list, Toast does not list its fees publicly. Instead, it quotes restaurants a flat rate fee based on sales volume and card-mix.
In general, we recommend that businesses use a credit card processor that integrates with their POS system. And, Toast offers the best POS system for restaurants.
Toast POS Strengths
Toast POS Weaknesses
Attached to a highly-rated restaurant-specific POS
Requires upfront investment in an entire POS system
Flat rate transaction fees
Can be pricey for small restaurants
No hidden fees
Fees are not listed publicly
To get Toast payments, you first need to become a Toast POS customer, so the pricing for Toast payments differs from others on this list. Because you need to invest in the full POS system, the upfront costs to enroll in Toast payments are considerably higher than opting for something like Fattmerchant or Dharma Merchant Services.
- Initial Fees: The POS starts at $79 per month, and there is a mandatory, one-time installation free that starts at $499.
- Transaction Fees: Flat rate, based on a custom quote.
- Hardware: Hardware will depend on the terminals and card readers you choose. Toast offers remote card readers and in-built readers attached to terminals. Packages start at $899.
Considering that access to Toast’s payment processing is dependent on first buying into the Toast POS, this option has a considerably higher upfront cost than others on this list. Toast as a brand, however, exclusively supports restaurant businesses; so for many restaurants, it may be a worthwhile investment.
Toast is a full-featured restaurant POS that is styled to support restaurant businesses of all sizes. Toast payment processing is built into the POS, which was designed specifically for restaurants by a team of former restaurant workers. Restaurant owners that are looking for a straight-forward payment solution that is built into their POS will find a lot to like about Toast.
The Toast ecosystem includes solutions for processing tapped, swiped, or dipped transactions as well as tableside payments and QR-code based payments on customer smartphones. Online order payments and payments via self-service kiosks are also available.
What Toast Payments Is Missing
To get Toast payments you first must be a Toast POS customer, which can set you back more than $1,000 just to get started. If you are a new restaurant looking for a payment and POS solution, though, this might not be a drawback. Toast POS earns consistently high ratings compared to the POS competition.
Restaurant Payment Processing Frequently Asked Questions (FAQ)
What does ‘interchange plus’ mean?
“Interchange” describes the credit card processing fees that are charged by the bank that issued the credit or debit card. Your credit card processor or merchant services provider pays these fees to issuing banks. The interchange fees are then built into the fees your credit card processor charges you.
A card processor might list its fees as “interchange plus 0.05%” to clearly illustrate its mark-up. Describing its fees this way allows the processor to tell you its direct price, since some credit card issuer’s fees are higher than others. American Express, for example, charges more than Visa. Some processors like Square instead opt to charge a flat rate for all of its credit card transactions.
Why do online payments have a higher processing rate?
Online payments made through your website or ordering app require the additional security of a payment gateway. If your payment processor supports online payments, it has a relationship with a payment gateway. Like the other parties in a credit card transaction, the payment gateway assesses its own fees. Your payment processor, typically, just passes these fees on to you for any online payments.
What are ‘hidden fees’?
Most of the providers on this list do not charge “hidden fees.” But if you are working with a different merchant service provider, you may notice several fees listed on your credit card processing or merchant services agreements.
Before you enroll with any payment processor, you should look for these fees in your contract so you know what to expect:
- Retrieval fee: Some card issuers charge you when a cardholder requests additional information about a transaction. This is usually the beginning of a chargeback dispute, so pay attention if you see one of these on your statement. Typically these fees range from $2 to $10.
- Statement fee: Sometimes also called a “Customer Fee,” this is a fee for sending you statements of your transactions. It is typically anywhere from $5 to $20 per month.
- Batch header fee: This is a fee for processing your credit card batches. Most processors charge between 5 cents to 20 cents per batch. It’s low, but it can add up, which is why most restaurants only “batch out” once per day.
Any payment processor will also list a “chargeback fee.” This is similar to a returned check fee and is incurred when a customer disputes a card charge generated by your business. The industry standard for chargeback fees is around $25, though for high-risk businesses this can go up to $50.
An overwhelming majority of restaurant customers want to pay for their meals with credit or debit cards. So any profitable restaurant needs the support of a payment processor to accept those payments. Since the majority of your sales will have payment processing fees attached, it is important to shop around for the best transaction rates you can find.
Considering all the variables restaurants face when choosing a payment processor, we found that Dharma Merchant Services is the best overall credit card processor for restaurants. It offers low interchange plus pricing that ensures restaurants will always get the lowest rates. Its next-day funding options keep your cash flowing smoothly. To see if it is fit for your restaurant, visit Dharma Merchant Services.