5 Credit Card Processing Companies You Should Know About

Lauren Christiansen10/19/2021

What are Credit Card Processing Companies?

What is a credit card processing company? Most businesses use credit card transactions as a major form of payment for goods and services. When a credit card is used, the merchant is charged a fee for processing the transaction. Most businesses outsource this service to a credit card processing company. These companies provide a merchant with a terminal that is connected to the company's payment processing network and the merchant's business.

What are Credit Card Processing Companies?

Credit card processing is the process of taking credit card payments for goods or services. Processors are typically financial institutions that provide this service to merchants, including retailers, restaurants, and event planners. They do this because they can offer lower rates to merchants than credit card issuing banks. It's a win-win for small businesses and credit card processing companies.

Restaurant owners have to choose the best credit card processing company for themselves and their customers. This is no easy feat, as there are more than 1000 different merchant service providers available across the United States. Simply going online and picking the first one on Google Search isn't going to cut it.

The type of credit card processor you pick must depend on business goals and budgetary constraints. It will also depend on how many payment options the restaurant wishes to provide. This is particularly true if you are trying to cater to customers who want contactless digital payment options, and who frequently use online ordering systems.

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Why are Credit Card Processing Companies Important?

Any restaurant that operates online or offers dine-in services will need a credit card processing company. There must be a simple and efficient way to process customer payments to maintain profitability. At the same time, many credit card processing companies charge exorbitant fees and have hidden expenses.

You have to pick the merchant services that will accommodate the greatest number of customers without hurting the bottom line. This is especially true since more customers are using digital currency and credit cards/debit cards to pay for menu items. The era of cash only is coming to an end.

Picking the best credit card provider is no easy feat. Factors to consider include subscription fees, pricing tiers based on restaurant size, and potential integrations. Larger restaurants will need a credit card processor that offers more features, while small diners may benefit from a simpler solution. Still not sure which provider is the best? Here are the top 5 credit card processing companies you should know about.

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1. Plum POS

While not a credit card processing company, Plum POS is a great option for both small and large restaurants. It comes with a point of sale so you can process transactions from anywhere. This includes compatibility with the majority of restaurant equipment, restaurant kiosks, and inventory management solutions. Like Square, Plum POS offers a mobile POS system so you can process payments on smartphones or handheld devices.

One benefit of Plum POS is its in-depth reporting features. Restaurants can use data insights to make better business decisions and eliminate bottlenecks. It comes with data security measures to protect valuable customer information.

It also offers an online ordering platform so you can streamline online Credit Card and digital payments to serve the greatest number of customers. Customer service is available to help and the pricing structure is transparent. A barcode scanner, card reader, cash drawer that goes inside the Cash Registers, and receipt printer are all included within the POS solution.

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2. CDG Commerce

CDG Commerce provides a variety of subscription tiers that work for both small and large diners. Small restaurants can benefit from a flat-rate transaction fee, and larger establishments can choose the interchange-plus fees. The top benefits of CDG Commerce are its pricing structure and functionality. The higher your sales, the more expensive the fees.

Unlike other credit card processing companies, there aren't any hidden expenses. CDG Commerce also offers a POS solution that can handle loyalty programs, online ordering programs, and marketing. Best of all, it comes with extensive security measures to help mitigate fraud and theft.

It offers 24/7 customers support and can integrate with most restaurant software. You can also connect the solution with reservation software to help streamline restaurant processes. One downside is that there are limited integration capabilities with a lot of restaurant Point Sale solutions. This is particularly true if you are a small diner that has lower-cost POS software.

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3. Square

Square is one of the more popular credit card processing companies. Small diners and local caterers tend to use Square because it doesn't offer as many features and modules that large establishments require. Square can operate on a payment terminal or you can use a mobile app to process payments. It is considered free, though you have to pay processing fees. Pricing begins at 2.6% plus 10 cents for in-person payments.

Larger restaurants may also not like Square because it doesn't offer 24/7customer support, and it deposits payments at a slower rate. One benefit is that customers can pay with any type of credit card and it doesn't cost the restaurant more or less money. That is because all pricing is at a flat rate.

It's fairly easy to sign up and install, and there are some integration capabilities. One downside is that Square is not very scalable. If you are a small diner with quick growth potential, you may need a different provider for more features and greater cost savings.

4. Dharma Merchant Services

If you are a large restaurant or caterer, Dharma Merchant Services may be right for you. This is because they offer lower processing fees for restaurants with high-volume transactions. Restaurants can also gain access to funds the very next day, unlike Square which takes a few days.

It is a subscription-based model that offers lower monthly fees than other providers. It is not a good option for small or high risk businesses that require greater cost savings. If you need 24/7 support or regularly available technicians, Dharma may not be right for you.

Pricing starts at a low monthly fee of $20 while processing fees are .15% and 7 cents per transaction. The larger the volume, the more these numbers drop. Restaurants can buy EMV chip cards and PIN Pads from the provider for an additional fee.

It can integrate with a Pos Solution, including Upserve and Revel. One downside is that small diners will not get approved for a merchant account with this provider. Dharma also doesn't offer phone support during the weekends, which is usually the busiest time for most restaurants.

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5. Toast

Toast Merchant Services is another well-known credit card processing company that integrates with the popular Toast point sale system. Like Square, it offers a flat-rate pricing structure for transaction fees. There are also no hidden expenses to worry about.

One downside is that you need to have the funds to pay for the entire POS system if you want to use Toast. A lot of small diners will be unable to use Toast for that reason. Some of its expenses are not easy to find, nor are they public. This is a downside for restaurants that prefer transparency, and previous users tended to agree.

If you want to use your own POS system and invest in just the Toast merchant services, this isn't the option for you. While Toast offers a lot of great features, the required purchase of the POS is a big negative for a lot of restaurants. Initial fees begin at $79 per month with an installation fee of $499, which is on par with a lot of other providers.

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