Navigating the World of Credit Card Processor Fees

Accepting credit card payments is a non-negotiable aspect of running a successful restaurant. Navigating the landscape of selecting the perfect credit card processor can be overwhelming, especially when trying to determine if you're getting a favorable rate. The key lies in calculating your credit card effective rate to gain clarity on the best choice for your restaurant.

Marketplace, the daily business news company, recently chronicled how credit card fees at one independent eatery have continued to increase to become the third highest cost behind labor and food cost. As a restaurant owner, it's crucial to weigh the fees and considerations associated with different processors to make an informed decision.  But the best place to start is knowing how to calculate your effective rate. 

Calculating your effective rate is essential in understanding the total cost your business incurs to accept credit card payments. Simply divide the total fees deducted for the month by the amount processed. For instance, with sales of $100,000 and fees totaling $3,000, your effective rate would be 3%. Ideally, a favorable rate should be below 3%, especially if your monthly sales exceed $100,000.

By carefully evaluating these fees and considerations, restaurant owners can select a credit card processor that aligns with their business goals and contributes to long-term success in an increasingly cashless society. If you would like to ask a question about your specific situation, feel free to email me.

Back to Blog