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Merchant Accounts for Restaurants


Restauranteurs have much to consider when running a restaurant--more than just a menu or a genre or an aesthetic. There are many important business decisions to consider, some minute enough that you may not think to plan ahead for them.

Merchant accounts are one such business choice, namely what vendors you will use and how you will incorporate these costs into your budget. Our restaurant consultants can provide references for the best vendors for your establishment and assist in creating a business plan that appropriately includes associated costs. We sat down with National Restaurant Consultants president David Kincheloe to get the most important tips when seeking out a merchant account.

First, there are different types of merchant accounts. "There are banks, third-party resellers, and back-end processors," explains Kincheloe. And with each type of account and processor comes different considerations.

Kincheloe says to consider fees above all. "Usually fees are calculated on several basis points over the bank interchange rate. A lot of third-party vendors will charge 30-50 basis points above that interchange rate."

But wait! There's more. "On top of that, there are transaction fees," Kincheloe continues. "It adds up to a significant amount given that 80-90 percent of restaurant sales are paid for via credit card. And under new Durbin law, there are also fees for debit cards."

Besides fees, it's crucial to understand how your merchant account works. "Know when your merchant provider credits you. With a lot of companies, it takes two to three days to deposit funds into your account. Find a company that deposits the next day," Kincheloe suggests.

So what's all this going to cost you in the long run? Our restaurant consultants are now seeing an interchange rate plus zero basis points with flat monthly fees and small transaction fees, which is great news for restaurant owners. A more normal rate is typically the interchange rate, plus 15-20 points and a five to six cent transaction fee, plus a $25 monthly charge.

Knowing these figures allows you to budget, though new laws do allow businesses to pass along these fees to the customer.

"Still, I'm more in favor of being transparent with guests and considering this an overhead cost," advises Kincheloe.

For more information, contact us today. We can help you find the best merchant account for your business and incorporate costs into your business plan