Payment Methods for Restaurants

Options, setup, and fees


The days of walking into a restaurant and having to decide between cash and card are mostly gone, and restaurants are adapting their payment methods to these changes.

More and more payment methods for restaurants are popping up every year. Consequently, customers are often asking for more and more options from their favorite restaurants.

Keeping up with the current payment trends can involve a lot of work. But it can also create a dedicated following amongst your customers.

So where do you start when setting up your restaurant’s payment services? How does it work? How much does it cost? Is it safe? Is it worth it? How many people use this payment method? There are a dizzying amount of questions associated with how to accept payments from customers today. But hopefully, we can answer these questions and more for you around the following topics:

Commonly accepted payment types and how they work

1. Cash

Classic and easy for all parties, cash transactions are the simplest form. As long as you have an adequate float and accurate bookkeeping, there’s not much to worry about. It is also important to note that restaurants usually offer the option of paying cash when ordering online. It caters to those who want the convenience of ordering online but are hesitant about using online payment methods. Although new payment methods are constantly refined, there will always be a market for cash transactions, of which all businesses should be aware.

2. Credit/debit card

In both cases, customers are paying via a card that connects their bank account to the restaurant’s bank account (known commonly as the issuing bank and acquiring bank respectively). When swiping, inserting, or tapping a card at a restaurant, payment technology sends the card and bank information through a payment gateway to the acquiring bank, which then asks for verification from the issuing bank. When verification details such as card number, expiration date, and cardholder are verified through the system, the transaction may go forward. Here’s where things differ between debit and credit cards:

- Debit cards take money directly from a customer’s account; this means, they must have enough money to cover the transaction in their account at the time of the sale.

- Credit cards offer a certain amount of debt to customers each month which they then must pay off. They don’t necessarily need to have the money at the time of sale. It is important to know how to face declined cards and other customer card problems.

- Tapping cards is increasingly popular today, rather than swiping or inserting a card and entering a PIN. Near-field communication (NFC) technology has developed significantly and shows no signs of slowing down. Customers enjoy the ease and many new payment methods are capitalizing on this trend.

3. PayPal

Founded in 1998, PayPal is one of the oldest and most trusted online payment methods worldwide. Over 300 million people have connected either a bank account or credit card to PayPal, in order to make payments to businesses and people. PayPal can be set up for in-restaurant payments. It seems easier to then just pay with a debit or credit card which supports the PayPal account. But you may be surprised at the price of convenience. That is, not having to carry your card around and being able to pay with your smartphone. PayPal also allows restaurants working with online ordering services to offer a quick and trusted payment method to their customers.

4. Apple Pay

The world of Apple is ever-increasing and has recently entered the digital payment game. Apple Pay allows users to upload their credit and debits cards, so they can use them via their iPhone or Apple Watch.

Customers can then pay at any place accepting contactless payment methods. Apple accepts most major credit cards and banks at the moment, as they are looking to increase their influence on the market. Transactions are authorized by a PIN, fingerprint, or facial recognition from the customer depending on their device’s technology.

Apple Pay is available in over 40 countries and if Apple’s reach with the iPhone is any indication, there is no sign of stopping. Predictably, Apple Pay is only available for Apple users (iPhone 6 or newer).

5. Google Pay

Like Apple Pay, Google Pay (formerly Google Wallet) is a virtual payment service available for smartphones. Credit and debit cards are uploaded and can be accessed via the app and used in contactless payment transactions.

Google Pay is mostly available for Android systems but is available for IOS in the USA and India. Google Pay is available to customers at participating businesses in over 70 countries from Kazakhstan to Vietnam.

Available to use either online or via contactless payment in-store, Google Pay is an emerging leader in the field of virtual payment methods.

6. App payment

Some restaurants have their very own payment apps. It’s easy to spend when you don’t have to re-enter your details every time you want to make a purchase. Bigger companies and restaurants have capitalized on the willingness of customers to have their payment data saved and stored in their app.

How does the app payment work? Some apps allow customers to connect a credit or debit card and pay via this method when making an order.

Others connect buyers in the app to a third-party delivery system, which eliminates some responsibility on the restaurant’s part, but takes away from their profits.

When considering the first option, there are significant upkeep and security issues with storing credit card data. This is mostly left to the high-roller companies with large technology sectors to maintain.


Perhaps your restaurant has been operating as a cash-only business. Or maybe you’re just getting off the ground, and feel it is wise to implement a cashless payment system right away.

Simple point of sale (POS) hardware can cost anywhere from $800-$1400 (US dollars) to get set up. But much depends on the quality, sophistication, or simplicity that you and your restaurant desire. For example, some POS systems provide an all-in-one type setup run through an iPad.

In a simplified version: you buy the hardware, pay a monthly subscription fee, and you get all the perks included in the software such as cheque splitting, online ordering, menu suggestions, and tips management. A hardware (some items are more expensive than others) is needed to get an iPad-operated POS system up and running.

Here is what you’ll need for an example all-in system:

  • Wifi and router: devices communicate with each other using a local connection.
  • iPad: acts as the terminal through which customers pay. A terminal is a portable device where customers normally insert or swipe their card and then enter a PIN via the keypad. iPad systems have larger screens and more options for staff to configure. You can use more than one iPad, but the cost associated with multiple iPads and software subscriptions can add up quickly.
  • Mac computer: acts as a server for the system where all sales can be reviewed.
  • Receipt printer: wireless printer for the front of the house which prints receipts for customers to review before paying.
  • Ticket printer: when orders are confirmed, tickets are printed to alert kitchen staff that a food or drink item must be made.
  • Cash drawer: standard money holder which can be wirelessly opened when a payment is made and cash is selected via the terminal. Monthly subscriptions to software can range anywhere between $50-$100 per device.

It is important to accurately calculate how many terminals (or iPads in this case) your restaurant needs so that customers are not waiting a long time to pay. Everything included, you are looking at a few thousand dollars to start. But once you get going, you are only paying for the membership fee, the upkeep on items (receipt paper, new cables, and the dreaded transaction fees) – more on those later.

There are many different brands and styles of terminals all perfectly suitable for restaurants. The most significant components that should be considered before purchasing a specific POS terminal are cost and what payment methods are accepted. Some older terminals do not support near-field communication and thus render all smartphone and tap options unavailable. Considering the demand and popularity of tap payment methods, it’s probably a prudent move to include them. However, it may not be in the interest of some upper-scale restaurants. Customers paying for high cheque totals may feel more comfortable with a traditional swiping, PIN entering, or signing routine.

Knowledge of your clientele will help guide you in this decision

A surprising amount of terminals that use near-field communication are bound to a particular technology. Some systems will only accept IOS devices, others will only allow Android users to pay via these terminals. Either way, you should be wary of these options and look up the specifics of a terminal before committing and disallowing specific smartphone users the ability to pay via tap at your restaurant.

In the many many options for POS terminals that support near-field communication, choosing one that allows all contactless payments seems the best way to accommodate more customers.

Lastly, fees on transactions are inevitable, and a large reason why many European restaurants are still holding out on accepting cards. You are paying a company to use their service and to solve the problems that may occur with them.

A waitress typing on the order screen of the restaurant -

When accepting debit cards, there are two types of transactions : signature debit and PIN debit

1. Signature debit

These are transactions where the customer does not enter his or her PIN. They instead sign the receipt as if they were using a credit card. These transactions do not use the debit network and thus become subject to the fees established by the card user’s bank.

This specific fee is called an interchange fee and is paid by the business to the bank which issues the customer’s card. Interchange fees vary depending on bank and size of purchase but typically range between 0,80% – 1,55% plus a flat rate of $0,04 – $0,15 per transaction.

2. PIN debit

These are typically transactions where a customer taps or inserts the card and then inputs his or her PIN into a keypad. Recently, they have come to include contactless payments with either cards or virtual wallets as they also use the same form of online verification for the payment.

Most debit networks charge around 0,05% – 0,83% plus a flat rate of $0,10 – $0,20 per transaction. This works out to about $0,36 that a merchant must pay for a $20 customer purchase.

It’s important to note that, because a network and payment gateways are being used to process these transactions, there may be a gateway and other specific fees added on top. It’s important to understand all the fees associated with a system.

3. Credit cards

Between transaction, flat, incidental, interchange, and assessment fees expect between 1,15% – 3,00% per transaction with an additional $0,05 – $0,15 on top. Credit card fees tend to cost more for merchants due to the heightened risk. Each credit company and bank have its own method of pricing payments and what fees are attached to each payment.

Most banks have tiered pricing plans for merchants accepting credit cards. In-person sales pose the least amount of risk to banks and will likely have the lowest interchange fees. Online purchases have a high risk attached to them and often allow banks to charge the highest interchange fees to account for that risk. Your restaurant business focus should dictate which type of plan fits best.

4. PayPal

Transaction fees when using PayPal are 2,9% + $0,30 per transaction for merchants. Due to the bulk of payments being made over the internet and few face-to-face ones, fees for using PayPal are high but it is a trusted method when paying online.

Research your clientele and observe questions about payment methods. If someone asks for a payment method that is not available, make a note— or tell staff to— so that if it happens regularly, you may need to seriously consider adopting the requested payment method. When you implement or offer a new way to pay, make it known to your customers near the POS system.

Remember, payment is the last chance to make a positive impression on your customer and including their favorite payment method could leave a lasting impression in their mind and have them wanting to come back to your restaurant soon.

5. Apple Pay and Google Pay

Both of these popular new payment methods are simply customers uploading cards to their devices and using them through a virtual wallet. They can be treated simply as a contactless payment method and are supported by any universal near-field communication technology.

Merchants will incur the same debit and credit fees as if a customer had used the actual card. There are many things to keep in mind when it comes to fees and it requires thorough reading and a well-planned approach to find what meets your restaurant’s demands best.

Pricing items correctly is always a challenge for restaurant owners and the addition of fees makes the process even more complex. In today’s society, it’s understood by customers that POS systems and fees are factored into the price.

Feedback from customers overwhelmingly supports the idea that customers prefer paying with cards and smartphones and understand their convenience must be accounted for on the part of the business owner.


Understanding your target demographic can give you a solid forecast of what payment options your restaurant should offer and which are not practical. Much research has been done on this subject and several constants have been found: middle-aged consumers prefer to use debit cards while senior citizens prefer credit cards.

Buyers under the age of 30 are most likely to use their smartphones to make purchases with almost 50% saying they prefer this method. Under-30s are also most likely to use the card when making payments of under $5. The data here should not be shocking in that the younger generation— who has grown up with a smartphone in hand— is most likely to use them when paying for goods and services. But this information varies depending on the region and it’s best to find out the trends in your area so you can make an informed decision.

Checking out other successful and not-so-successful businesses in your area can also give you a better picture of what type of payment methods are possible and worth exploring for your restaurant.

Good matches for type of business and payment method

Given the desire and proven use of card payments, small restaurants would be wise to accept both debit and credit cards. Most customers, when dealing with a lower cheque total, will deal with near-field communication devices. Keep in mind that some banks restrict their cards to only proceed with transactions under $20.

For diners and bakeries that handle many small amounts of purchases, especially those who cater to younger customers, a contactless payment system is appreciated. More upscale restaurants may want to set up a plan that involves more emphasis on handling credit card payments. When making a sizeable purchase, customers feel safer providing their signature rather than just a tap of a card or phone to secure their payment. Most restaurants accept only major credit cards. But dedicated users of American Express, Discover, and Chase earn reward points for each transaction and are eager to use those cards wherever they can.

A customers of a restaurant is paying for is lunch to the cashier -

Research your clientele and observe questions about payment methods. If someone asks for a payment method that is not available, make a note— or tell staff to— so that if it happens regularly, you may need to seriously consider adopting the requested payment method. When you implement or offer a new way to pay, make it known to your customers near the POS system.

Remember, payment is the last chance to make a positive impression on your customer and including their favorite payment method could leave a lasting impression in their mind and have them wanting to come back to your restaurant soon.


There are security risks to accepting cards but luckily there are some measures you can take to help prevent fraud:

  • Wifi security: ensure that your wifi has a password and that it is only shared with paying customers. Elite hackers can theoretically break into your network compromising the POS system. But when monitored closely in your restaurant, it is not common.
  • Be aware of stolen cards: itt’s not your job to ask for identification every time someone makes a purchase. But with the use of tap functions comes more opportunity for nefarious behavior. Be aware of certain details, like the fact Google Pay does not require identification for purchases once the phone is unlocked. Have accurate time-stamped transaction records and security camera video available if requested by law enforcement.
  • Chips cards: security has improved since swiping cards began and the chip function has proven significantly more secure than the former method. If you’re still swiping cards, it might be useful to upgrade to a terminal that supports chip function, as most modern credit and debit cards prefer that method.


Many restaurants have found success in using third-party delivery services to connect with customers at home. Restaurants get more publicity and sales via popular food delivery sites. But fees slice into your profits and minimum orders and online problems can sometimes reflect poorly on you and not the delivery service. Some companies are even trying to profit from moving restaurants off third-party delivery sites and back onto their own websites.

An increased dissatisfaction amongst restaurants using third-party sites has created an opportunity for this type of business. One thing is clear. The size of your restaurant and the volume of your business should dictate how you manage your online ordering and payment system.

For restaurants that do not rely on internet transactions, it is easier to let a third-party delivery service handle any food purchased for delivery. But for restaurants wanting to make a splash in the growing food delivery market, setting up your own online payment and delivery service can help you increase profits. Some all-in-one POS systems offer online software allowing you to process orders online via debit cards, credit cards, and other payment methods. It may cost you a bit more per month but a reliable online system is key if you want customers coming back.

Setting up and accepting PayPal is also possible for online orders. But it can be difficult to integrate into an ordering system unless you have advanced knowledge of computer systems. Various POS systems are available to meet your online ordering and payment needs. Finding the best choice for you will take some reading and business foresight on your part.

Pros and cons summary

There's an abundance of information when considering payment options for your restaurant. We’ll try to break it down for you in a summary.

Pros of supporting card and contactless payments in your restaurant:

  • Turntables quicker: less fumbling with cash and wasted time looking for change.
  • Please more customers: build a dedicated following by offering modern perks that other restaurants may not offer. -Higher tips: per experience, customers are more likely to give higher tips when paying electronically versus paying in cash.
  • Data collection: it’s easy to organize and collect information using cashless payment methods. Track trends and utilize specific technologies offered by POS systems.

Cons of supporting card and contactless payments in your restaurant:

  • Security issues: you’ll need to monitor systems to ensure fraud is not occurring.
  • Technology breakdown: everyone loves tech when it works but not so much when it fails. Some POS systems offer 24/7 support. But dealing with uncooperative technology in front of a customer can reflect poorly on your business.
  • Bottom line: it costs money to support these systems, there’s no arguing that. Per transaction fees, third-party delivery fees, and monthly membership fees add up quickly. But there is a significant amount of customers who every day turn down cash-only restaurants and shops because they don’t have cash with them at the moment.