Restaurant Credit Card Processing Calculator

Understand your rates, find out how you can lower them.

Credit card processing is a complex subject. And for a busy restaurant owner, you need a simple way to understand how it works, and what you’re paying. You don’t have time to read through pages of statements to get to your bottom line. That’s where the Restaurant Credit Card Processing Calculator comes in.

Using this (free!) calculator, all you have to do is answer three questions and you’ll quickly understand what you pay in fees… and what your options are for saving money!

Calculate my Processing Rate

How Does Restaurant Credit Card Processing Work?

Approximately 81-percent of the money spent at full-service restaurants in America is charged to debit, credit or prepaid cards. And with the onset of technology, cash may not be the only thing diners are saying goodbye to. Tech-based payments, like online ordering or mobile wallets, are a simple way for customers to pay for their meals quickly and easily. Diners may forget their wallets, but they never forget their phones.

When it comes to “cashless” technology such as Apple Pay or chip cards, the consumer loves the idea of not having to wait once they are done with their meal. This, it has been shown, increases loyalty and guest tip percentages – in some cases tips increase as much as 40-percent for in-app payments!

One thing is clear: whether it’s accepting credit cards or accepting Apple Pay, accepting any form of payment that isn’t “cash only,” seems to be a huge opportunity for restaurants… but it comes with a cost.

Those pesky credit card processing fees.

Swiping a card at a restaurant comes with a fee. Using Apple Pay or a tabletop kiosk is still associated with a card… and you guessed it, a fee.

With a growing number of customers using credit cards and cashless options for purchases in restaurants, payment processing is necessary for accomplishing the hospitality mission.

How Does Restaurant Credit Card Processing Work?

For many restaurant owners, a credit card processor is seen as nothing more than a middle man. It’s the “person” who moves funds from point A to point B, while charging a fee. And OK, that is certainly part of the process, there’s a whole lot more that goes into it.

Here are the key parties involved in restaurant credit card processing.


The authorized user of a credit or debit card, also known as the diner about to pay you money. They are responsible to pay in full all charges made to said card*. Kind of obvious, but we thought we’d throw it in.

*Naturally, EMV has made this part a bit tricky. More on that below.


A business or non-profit organization that has contracted with a Merchant Bank to accept payments — also known as you, the business owner who wants to process the payment.

Then, we have the financial middlemen between your customers and you.

Merchant Processor:

Also referred to as merchant service providers, these third-parties act as the middlemen between the card issuing bank and merchant. They’re authorized to set up merchant accounts and route transactions through the proper channels on behalf of the merchant bank.

Credit Card Associations:

These are the companies that make the credit cards. Visa, Mastercard, Amex, and Discover are brands, or associations. They set the rules, and in many cases, some of the fees – like the interchange fee, which they share with the Issuing Bank.

Card Issuing Bank:

The credit card association, believe it or not, does not issue the credit card. This is why “Synchrony Bank” may be the person who sends your bill for a store credit card. These are the financial institutions that issue credit cards – Chase, Citi, Bank of America, etc. Some Card Associations may take on the role of Issuing Bank and issue and develop their own credit cards (e.g. Discover, American Express) and those fees are often higher.

Credit Card Processors:

These may also be referred to as Acquirers or Acquiring Banks. These are the “messengers” between the merchants and credit card associations. They pass batch information and authorization requests so businesses can complete transactions. The credit card processor charges you processing fees – the primary cost you pay for payment processing.

Every time you accept a payment on your point of sale (regardless of whether it’s a drive-through or a bar POS), all of the players mentioned above have a role – typically behind the scenes. Here’s a visual of that flow.

How Credit Card Authorization Works

What Are The Average Credit Card Processing Fees?

For most restaurateurs, one of the biggest mistakes they make is to assume the rate they pay is the cost. Which usually means they’ll pick the lowest “cost,” without truly understanding all of the restaurant credit card processing fees they’ll be paying.

“The biggest mistake, although it’s somewhat unavoidable if it’s your first time opening a business, is getting scooped up by the first processor that comes along. You may not understand how significant an impact your processor can have on your bottom line. Most small businesses are so desperate to just get their doors open that they will do whatever they can to speed up the process, and unfortunately that sometimes means you sign contracts that you shouldn’t.”

-Tony Lucca, Owner, 1905 Bistro & Bar and El Camino

On any credit card transaction in your restaurant, there are 3 fees that represent the cost associated the that swipe.

Transactional Fees:

Every time you swipe, these fees are assessed. Interchange and assessments are examples of transaction fees. These are the fees the card-issuing banks and associations charge for each transaction. Interchange fees usually consist of a percentage of each transaction in addition to a flat per transaction fee. Assessments are usually based on a percentage of the total transaction volume for the month.

Fixed Fees:

These fees show up on your monthly statement under a variety of of “fine print”. Examples of these might be your terminal fees, PCI compliance fees, or annual fees, as well as any monthly fees you pay your payment processor.

Incidental Fees:

The name is pretty transparent – these fes only appear per incidence. These are most often related to chargeback fees. These fees can also be batch fees or non-sufficient funds (NSF) fees.

Three fees. OK. Easy enough, right? Understanding that is half of the picture. Once you know where the fees on your monthly statement are coming from, you have to understand how your restaurant credit card processor comes into play – and how they get paid.

Understanding Credit Card Pricing Models

For the most part, restaurateurs don’t have control over the various fees they incur when cards are swiped in their restaurant. But they do have control over choosing a credit card pricing model – since they have control over choosing a credit card processor.

As a restaurant owner, you want simplicity. You just want to accept payments from your guests – this includes a variety of cards from your guests, while paying the lowest possible rates for each card type.

However, since interchange fees are non-negotiable your hands feel a little tied. This means you’ve got to choose the right pricing model to ensure you aren’t paying a ton of additional charges that don’t add any value to your business.

Choosing the right pricing model from your payments provider is your only chance to do better for your restaurant in this regard and will have a major impact on your
bottom line.

Here are the restaurant credit card processing pricing models to know.

Interchange Plus

Interchange is a percentage rate set by the banks and payments networks. This rate can vary from restaurant to restaurant making it difficult to give an exact estimate.

Here’s what you need to know.

  • You pay the exact interchange fee, plus a fixed processing fee set when you sign up.
  • If Card Associations change or reduce the fees, you get the savings.
  • Your payment acceptance fees are explained to you in a way that you can understand.
  • No hidden fees – Interchange itemizes your “wholesale fees” and “markups” and lists them on your monthly statement.
  • Fees can differ based on how the card is captured – in fact, you may be charged more in some cases (e.g. you key in the card).


When processing providers designate pricing by “tiers” – based on a set of qualifying criteria – and price transactions accordingly. For example, in the 3-tiered pricing system, the first tier (lowest cost to the merchant) is a standard transaction or swipe of a qualified card, the second tier might be a higher-cost rewards card, and so on.

The majority of business owners are on a tiered plan. This makes it difficult for them to understand their credit card processing rates.

  • Tiered pricing plans categorize credit card transactions into three categories – qualified, mid-qualified and non-qualified.
  • Rates vary based on the categories, ahd while qualified rates are the lowest they must meet all of the processor’s criteria to earn that rate.
  • Some business owners enjoy the hard-coded rates as they find it easier to understand what they are paying, while it has been said that some processors take advantage and charge excessive fees.


This is a very similar pricing model to Tiered, minus the tiers themselves. The best example of it in “the real world,” would be PayPal.

  • All transaction types in this model cost the same percentage and transaction fee.
  • All costs are blended together to create one rate and fee, which can result in a higher transaction cost per swipe.
  • There is typically no monthly fee.

Flat Rate

Flat rate is an increasingly popular pricing model for credit card processing. The easiest way to explain it, and the version of flat rate processing mostly commonly used is where a payments processor charges based on a fixed percentage of credit card transactions.

For restaurants, a flat rate pricing model can come with many benefits:

  • Predictable rates restaurants can understand.
  • You know your payments processing costs each month.
  • Payments simplicity is achieved.
  • Transparent pricing with no hidden fees.

10 Misconceptions About Restaurant Processing and Payments

Don’t let misconceptions make your decision about restaurant credit card processing any harder than it has to be. Download our free guide book.

Download Now

Credit card processing sucks. It doesn’t have to.

For most restaurant owners, payment processing is a necessary evil. With an ever growing number of customers using credit cards for purchases in restaurants, payment processing is a requirement for accomplishing the hospitality mission. However, most restaurateurs feel these credit card processors don’t add value and are seen as a commodity cost of doing business. If you’re feeling like the money you pay for credit card processing fees is just another utility, like the gas or electric, it’s time for that to change.

Here’s what you should look for in a payment processor:

Fair and Transparent Pricing

Valuable Insights About Your Restaurant: 

You should receive actual insights about your restaurant and guest purchase decisions by combining all the systems in your restaurant.

Simple and Easy To Understand Reporting:

Traditional processors deliver pages of statements that are useless to restaurant owners. Credit Card statements, consumer information, and trend data should be combined to give you insights into your guests’ purchase decisions so you know what adjustments to make that directly impact your growth.

Secure Processing:

Ensure your processor is certified PCI Level 1, the highest level of security compliance certification offered by the PCI Security Council. Combine that with EMV to protect your business from chargeback liability and secures payment processing using tokenization and point-to-point encryption.

Cost Savings:

Complete the calculator above to learn how much you can save.

EMV and the future of restaurant payments.

If only swiping a credit card for processing was the only thing we had to worry about when it came to accepting payments. It seems that those days are long behind us and have been replaced with a wide range of payment options—from mobile phones to credit cards.

There’s certainly been confusion in the restaurant industry around new payment methods —compliance and liability concerns regarding EMV payments specifically come to the forefront with more complicated forms of payment and equipment to match. The October 2015 deadline for restaurant EMV compliance may be far behind us, but 66% of businesses found meeting EMV compliance standards a challenge.

Why? Well probably because they don’t understand it completely.

Here’s what the growth of EMV compliance means for restaurants.

EMV is an acronym for Europay, MasterCard, Visa, and refers to the security chip standard in credit cards. The alternative is the, now outdated, magnetic strip. Never fear, the magnetic strip still works. But your liability has shifted in the event of fraud and chargebacks.

A common myth is that restaurateurs need to be ready to take on the liability of all in-person fraud committed in conjunction with not offering payment via EMV. This actually only applies to a small subset of fraudulent transactions called “card-present” counterfeit EMV fraud, which occurs if you run the payment on a counterfeit EMV card through magstripe transaction. Another useful way to think about or remember this is that the liability typically rests with the party with the lesser technology.

Bottom line: If you did not meet the EMV compliance deadline with any hardware upgrades and are continuing to process cards with magnetic strips, you are now liable for any fraudulent charges that occur on your restaurant POS with in-person EMV chip cards.

Fortunately, technology for restaurants continues to become more sophisticated to keep up with these trends and, depending on the solution, won’t break the bank when it comes to your restaurant credit card processing rates.

Thousands of restaurants turn to Breadcrumb POS by Upserve to deliver remarkable hospitality.

Restaurant POS software should be intuitive, so you can focus on your guests, not your technology. Schedule a 15-minute demo and see how Upserve can give you everything you need.

Request a Meeting