Cafes and Restaurants

Know how least-cost routing can benefit your business

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Choosing the right payment service provider for your cafe or restaurant is a difficult task. So Merchant Pricing Hub specifically created this section to give you valuable information to help you make guided decisions in terms of your payment service provider.

Cafes & Restaurants

Customers will definitely grab a cup from your cafe if you are offering the best coffee. But giving them a swift and seamless checkout experience will make their day-  especially for those on-the-go. That’s why your point of sale is one of the things that matter most for cafes and restaurants.  


In our previous article, How to select an EFTPOS provider, we have outlined the top four criteria any small business should consider when selecting an EFTPOS service provider. Out of all these considerations, connectivity and reliability seem to be the most important feature a cafe should really take a look at. In a recent interview conducted with a cafe owner and barista the main reason for shifting to a different payments provider was because of the poor mobile coverage and resulting connectivity issues - a common problem experienced by many businesses. No one wants to be chasing customers for a $4 coffee when their payment has been declined and they have no cash to settle the bill. 


So it is very important to know beforehand what will work best for your business in terms of network coverage. Here are a few things to check to save you from connectivity issues before you decide on what provider you will choose or change to. 

  • If your terminal is connected to a mobile network, find out what your preferred provider uses to ensure that you get a strong mobile reception where your payment terminal will reside.
  • If the terminal supports Wi-Fi, reevaluate whether this should be your main means of connection or if it should just serve as a backup.
  • If you run a Point-of-Sale (POS) system, check whether your preferred service provider is able to provide a terminal that integrates with this.
  • Check on the up-time of your preferred service provider especially if you foresee that your transactions will heavily rely on accepting electronic payments. 


  • You can also check the other three criteria listed here. As an addition, you might also want to consider other services, such as gift or loyalty programs, order routing, custom modifiers, inventory tracking, etc. 


    Comparing and researching several payment service providers to come up with what best suits your cafe or restaurant is definitely time-consuming but worthwhile in the long run to save you from any payment service related issues. Merchant Pricing Hub makes it easy for you with our service provider comparison tool and pricing calculator. 


    Download our PDF on least-cost routing to receive a discount code for a FREE annual membership to get full access to these features. This offer (valued at $99) is valid until 30 September 2019 for the first 2,000 merchants.

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    How to select an EFTPOS provider: Essential criteria a small business should consider

    With almost twenty banks and payments service providers to choose from, selecting an eftpos provider for a small business like a retailer or café can be difficult. 

    This month we have listed the top four criteria a small business should consider when selecting a new EFTPOS service provider for in-store payments:


    1. Card Acceptance

    Generally, Visa, Mastercard and eftpos cards are now accepted as standard by all providers. Most service providers will also accept American Express and Union Pay cards, but often separate fee arrangements apply. Watch out for exclusions and inclusions within the standard fees as the likes of Commonwealth Bank (American Express and Union Pay) and Square (American Express) do include additional cards as part of the standard fee schedule, but most do not. Other payment types which may be relevant to your organisation but which are not accepted by all providers include Alipay (accepted by Tyro, NAB and Smartpay), Diners Club and JCB cards.


    2. Fees and Transaction Volumes

    Most providers have tiered fee structures based on monthly turnover. The higher the monthly turnover, then the lower the cost per transaction.

    Nearly all service providers will provide customised quotes once a business averages more than $30,000 in monthly turnover, so if your business fits into this category it is always worth asking for a quote rather than just looking at the standard pricing presented on a website.

    Be careful when comparing plans which include a certain volume of transactions within a fixed monthly fee (e.g. most major banks) to those that charge a fixed monthly fee per terminal and separate transaction fees (e.g. Bendigo Bank). While merchant plans that include transactions within the flat monthly fee may look simple, you may also be paying more per transaction if you do not reach the monthly turnover threshold each month.

    It really is important to consider which card types are included in the standard fees and where additional fees may apply. Some service providers also treat credit cards and debit cards (i.e. those taking funds from a savings or cheque account) differently, with credit cards charged as a percentage of value, and debit cards sometimes charged as a fixed fee per transaction. Not all service providers make this distinction, so watch out for this when comparing fee structures. 

    When customers tap, these transactions are typically routed via the international card schemes (e.g. Visa and Mastercard). Service providers such as Tyro allow merchants to implement “least-cost routing” which enables a merchant to direct these contactless transactions to the lowest cost provider, which for debit cards may be the domestic eftpos scheme.

    Terminal fees are also factored in differently with some plans including the cost of the first terminal in the monthly fee, some having a separate monthly terminal fee, while others (e.g. Square) charge an upfront fee for the terminal but no monthly fees.

    Other fees which tend to differ between service providers include establishment fees, lost/damaged terminal fees, cancellation fees and monthly account fees if settling funds into another bank’s account. 


    3. Connectivity and reliability

    How the terminal connects to your service provider may not sound important until you first start having connection issues when trying to accept payments, so make sure you understand beforehand what will work best for your business.

    Most terminals targeted at small businesses will connect via a mobile network. Mobile network coverage can vary considerably, particularly if your payment terminal is located at the back of a shop or café. Hence, find out which mobile network is used by your preferred provider and check to ensure that you get strong mobile reception where your payment terminal will reside. If the terminal supports Wi-Fi, consider whether this is a better option as the primary means of connection or can serve as a backup.

    If you run a Point-of-Sale (POS) system, then also check whether your preferred service provider is able to provide a terminal that integrates with this. Square even provides a free POS application.

    Reliability or the up-time of your service provider can sometimes be an issue and if your business relies heavily on accepting electronic payments, then this becomes an important factor. Check with other business owners and social media to find out whether there have been any up-time issues. Many service providers also provide low cost mobile card readers (e.g. with a small up-front fee or monthly fee), so you may want to consider having one of these on-hand with another service provider to use if your primary service provider goes down for any reason.


    4. Design

    Check out whether the terminal utilised by your preferred service provider fits easily on your counter-top and works aesthetically for your type of business.

    Some businesses, e.g. cafes and restaurants, may also find it useful to accept payment at the table, so check out how easily this can be done with the terminal.

    How easy the interface is to use is also important. This is sometimes difficult to check beforehand, but you can ask other businesses who use the same terminal or check out the terminal user guide which the service provider can provide (some even make this available on their websites).

    Finally, make sure the terminal supports all the functionality you require, e.g. tipping, automatic surcharge calculations, split bills, email receipts.


    Comparing service providers (particularly card acceptance, functionality and pricing) can be a difficult task for a small business, particularly when time is limited. This is where the Merchant Pricing Hub can make life easier with our service provider comparison tool and pricing calculator. Just sign up for an annual membership for full access.


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    Choosing a Payment Gateway? Here are the Three Questions you Need to Ask

    With seamless payment solutions a must have for businesses the world over, companies need to ask the right questions when selecting a vendor.

    Getting the right gateway for the life cycle of your business could be the cornerstone for your success, getting it wrong could cost you.

    The one size fits all phenomenon vendors peddled five years ago has since been replaced with adapted solutions at a fraction of the cost. Gateways are now providing region specific solutions creating an improved cardholder experience as standard.

    With this in mind, here are the top 3 questions you need to ask when selecting a vendor


    1.   Show me the money

    Payment gateways will sometimes just offer the connectivity and will require you to seek out your own merchant account.  Some will provide a single solution where the merchant account is included as part of the sign up.

    A merchant account will determine when your money will be in your bank account. When and how often your money will settle can impact your cash flow.

    Understanding how the payment gateway and its merchant account will work is key. Some of the global carts will require you to use their merchant account and if you don’t it will hit you with additional fees. It is important to know how chargebacks work, if goods or services are not received the cardholder can raise a dispute.

    The key piece of information to understand is ‘how long from when the customer makes that payment do I receive it?’ This can be on a scale from approximately one day up to seven days. Just because the transaction is real time does not mean you will have your funds immediately. There is a lot of back end bank settlement required to be processed and in some cases money is held for monetary gain.


    2.   What countries do you service - really?

    Despite all the talk, there is no single vendor who can serve a global market. This is contrary to the well-executed marketing campaigns of the global giants. In many cases, each country has its own preferred payment method like ACH in the US for bills, Bpay for bills in Australia and Sofort in Germany all being supported by ‘in country’ players.


    Often some of the global players may not be providing customer support during your high-volume times. Getting a payment gateway which aligns to your region’s time zone and preferred method of payment is paramount.

    Also, knowing which countries are factored into your expansion horizon are key. Processing costs can be lower if you are set up with a player in that country however if your volume is low it may be best for these customers to use your existing gateway in another currency even at slightly higher rate. If your gateway suits 90% of your transactions 90% of the time, you can service the majority of your customers so this could be the best route.


    3.   What integrations do they offer?

    Having a smorgasbord of integrations on tap will enable your business to grow without the need to change suppliers. Working with a payment gateway that integrates with your industry software may be a prudent approach.


    Fraud tools vary widely in cost and complexity. Depending on your operation you will be considered high or low risk. Partnering with a gateway who has a solution which meets your business profile is important. There is no point spending a few dollars per transaction preventing fraud if that is swallowing your margin. In contrast, if you are in an industry where fraud is apparent this investment would be essential.

    As much as it is important to integrate with your internal practises, this cannot be done at the expense of the customer experience.

    Some organisations use different payment vendors for different client experiences. This can be due to usage and size of payment.

    If you are starting the process of looking for a payment gateway provider knowing the supplier supports all channels and can fit in with your everyday processing is key.

    With PCI compliance and data security a hygiene factor for payment gateway providers, it is time to look deeper at the total experience in the region you operate.


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