Lower Card Processing Fees for Restaurants

Understanding Card Processing Fees

Running the floor of your restaurant is no small task. Between managing staff, keeping customers happy, and ensuring the kitchen runs smoothly, the last thing you want is to lose money to high card processing fees. Understanding these fees is the first step to reducing them.

When a customer pays with a credit card, a percentage of the sale goes to the card processor. Typically, this ranges from 2% to 3.5% per transaction. On a $1,200 catering order, this could mean losing $24 to $42 right off the top. For a 60-seat restaurant doing $20,000 in monthly credit card sales, this could add up to $400 to $700 in fees each month. For small restaurants, every dollar counts.

Use Bank Transfers for Large Orders

For larger transactions, like catering orders or event deposits, consider using bank transfers, also known as ACH payments. These transfers usually have much lower fees than credit card payments. For instance, using Stripe, ACH payments cost 0.8%, capped at $5. So, on that same $1,200 order, you'd only pay $5, saving you a significant amount.

How to Encourage ACH Payments

• Offer a Discount: Encourage customers to pay via ACH by offering a small discount. Even a 2% discount on a $1,200 order saves the customer $24, which can be a good incentive.
  • Script Example: "We offer a 2% discount on large orders if you choose to pay via bank transfer. This not only saves you money but also helps us keep our costs down."
• Educate Customers: Many customers are unaware of the difference in fees. A simple explanation can go a long way.
  • Script Example: "Did you know that paying by bank transfer can save both of us on fees? It's a secure and easy way to handle larger transactions."
• Highlight Security: Assure customers that ACH payments are secure and reliable.
  • Script Example: "Bank transfers are highly secure and processed through trusted banking systems, ensuring your payment details are safe."

Consider USDC Payments

If you're open to trying new methods, consider accepting payments in USDC (a type of stablecoin). Stripe allows USDC payments at a 1.5% fee, which can still be lower than some credit card fees. However, this option requires Stripe approval and isn't available in New York.

Steps to Implement USDC Payments

1. Contact Stripe: Reach out to Stripe to inquire about enabling USDC payments.
2. Educate Your Staff: Ensure your team understands how USDC payments work so they can explain it to customers.
3. Promote the Option: Let customers know you accept USDC payments through signage or during the payment discussion.

Streamline Your Payment Process

Efficiency in payments can save time and money. Here are a few tips:

• Consolidate Invoices: Instead of multiple small invoices, consolidate them into one larger invoice when possible. This reduces the number of transactions and associated fees.
  • Example: If you cater weekly for a local office, send one monthly invoice instead of four weekly ones.
• Set Up Recurring Payments: For regular customers, set up recurring ACH payments. This ensures timely payments and reduces administrative work.
  • Example: For a customer who orders $500 worth of meals every week, set up a monthly ACH payment of $2,000.

Leverage Technology

Consider using an AI host like RestaurantPilot to streamline communication and payment processes. This tool can handle reservation requests, catering inquiries, and even send out invoices with payment options like bank transfers and USDC. Learn more about how it can help your restaurant here.

Keep an Eye on Fees

Regularly review your processing statements. Look for any unexpected fees or increases. Sometimes, processors increase rates without notice. If you spot something unusual, don't hesitate to negotiate with your provider.

Common Mistakes

• Not Reviewing Statements: Many restaurant owners neglect to review their statements regularly, missing out on potential savings.
• Ignoring Fee Increases: Accepting fee increases without question can cost you in the long run.

Final Thoughts

Lowering card processing fees requires a proactive approach. By understanding your options and educating your customers, you can keep more of your hard-earned money. Every little bit helps, especially in a competitive industry like ours.

Conclusion

Running a small restaurant means every decision impacts your bottom line. By focusing on reducing card processing fees, you can improve your margins and invest more in your business. Remember, it's about making small changes that add up over time.