Restaurant Payment Processing: What UK Restaurants Need to Know
What restaurant payment processing means in practice
Payment processing is how your restaurant gets paid. The card machine on the counter, the checkout on your website, the contactless reader a server brings to the table. It's also everything sitting between the customer's card and your bank account - the banks, the card networks and the fee each of them takes.
Most UK restaurants now take over 90% of their transactions by card. Every one of those payments costs you something, and it comes straight out of your margin on the order.
How card payment fees work
A card payment passes through several hands, and each one takes a cut:
- Interchange fee - goes to the customer's bank, the one that issued the card. The card networks set it. For consumer cards in the UK it's capped by regulation.
- Scheme fee - goes to Visa or Mastercard for using their network.
- Acquirer margin - goes to your payment processor for handling the transaction.
A flat rate like 1.5% + 10p bundles all three together. With interchange-plus pricing you see the interchange cost on its own line and pay the acquirer's margin on top.
Indicative blended rates for UK restaurants:
| Card type | Typical rate |
|---|---|
| Consumer Visa/Mastercard debit | 0.8%–1.2% |
| Consumer Visa/Mastercard credit | 1.2%–1.8% |
| Corporate cards | 1.8%–2.5% |
| American Express | 2.0%–3.0% |
Treat these as rough benchmarks. What you actually pay depends on your volume, your provider and your contract, so get your exact rates in writing.
Types of payment terminal for restaurants
Countertop terminals stay at the counter and connect by cable or Wi-Fi. They're reliable and cope well with a busy counter. They don't move.
Portable terminals connect over Bluetooth or Wi-Fi and get carried to the table. If you run a full-service restaurant where nobody walks up to a counter to pay, you need these.
Mobile and handheld devices run a POS app on a tablet or a purpose-built handheld. Staff take the order and the payment on the same device, at the table. You see a lot of them in fast-casual.
Integrated POS terminals have payment built into the POS. The POS sends the right total to the terminal, so nobody types it in and nobody gets it wrong.
Why integrated payments matter
In a lot of restaurants the server still reads the total off the POS screen and keys it into the card machine by hand. It's slow, and people mistype numbers.
With integrated payments the POS sends the total straight to the terminal. The customer pays, the receipt comes out, and nobody has touched the amount.
If you process a lot of transactions, that gets you:
- fewer mistakes on split bills
- quicker payment at each cover
- less exposure to card fraud
- less reconciling at the end of the day
If your POS and your card machine don't talk to each other, ask your POS provider about integration before your next contract renewal.
Online payments for restaurant websites and apps
Taking orders through your own website or app means you need an online payment gateway to handle card details at checkout. Check that it has:
- Strong Customer Authentication (SCA), which UK and EU rules require for online payments
- 3D Secure support (Verified by Visa, Mastercard Identity Check)
- online transaction fees you can live with - they're often higher than in-person rates
- fast settlement, i.e. how quickly the money lands in your bank account
- real help with chargebacks when a customer disputes a payment
How Flipdish handles restaurant payments
Flipdish builds payment processing into the rest of its restaurant platform:
- Payments on your Flipdish website or branded mobile app go through one secure gateway.
- In-venue payments on the Flipdish POS and POS hardware are integrated, so staff never key in an amount.
- Self-service kiosk payments use the same system.
- Online and in-person transactions all show up in one reporting dashboard.
If you run several sites, you get the payment data for all of them in one place instead of reconciling each location separately.
Questions to ask any payment provider
Ask these before you sign anything:
- What's the exact rate for consumer debit, consumer credit and corporate cards?
- Is the rate fixed, or can it change?
- What's the minimum contract length, and what are the exit fees?
- How long does settlement take?
- What happens with a chargeback - who pays?
- Does the terminal integrate with my POS?
- What's the monthly terminal rental?
Get every answer in writing.
How to reduce your payment costs
- Negotiate as you grow. Rates drop noticeably as transaction volume goes up, so if your business is growing, ask for a rate review every year.
- Use integrated terminals. Fewer keying errors and less fraud, and both cost money.
- Look hard at Amex. It costs more to accept than Visa or Mastercard. Work out whether your Amex customers spend enough to cover it.
- Put in-store and online payments with one provider. You'll often get a better blended rate, and reconciliation gets a lot simpler.
