Restaurant credit card processing involves a series of steps that allow restaurants to accept credit and debit card payments from their customers. Here’s how it typically works:
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Card Swipe or Insert: When a customer is ready to pay their bill, the server or cashier will present the bill and ask for payment. The customer will then either swipe or insert their credit or debit card into the restaurant’s card terminal or point-of-sale (POS) system.
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Card Information Capture: The card terminal or POS system captures the card information, including the card number, expiration date, and sometimes the cardholder’s name.
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Transaction Request: The restaurant’s POS system or card terminal sends a transaction request to the restaurant’s payment processor. The payment processor is a company that facilitates the secure transfer of funds between the customer’s bank (issuing bank) and the restaurant’s bank (merchant bank).
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Authorization Request: The
forwards the transaction request to the card network (e.g., Visa, MasterCard, American Express) associated with the customer’s card. The card network routes the request to the customer’s issuing bank to verify if the customer has sufficient funds or credit available for the transaction. -
Authorization Response: The issuing bank reviews the transaction request and checks if the customer’s account can cover the cost. If approved, the issuing bank sends an authorization code back through the same channels, indicating that the transaction is approved.
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Transaction Approval: The payment processor receives the authorization code and relays it to the restaurant’s POS system or card terminal. This code signifies that the transaction is approved, and the customer’s card can be charged.
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Receipt Printing or Digital Receipt: The restaurant’s POS system generates a receipt for the customer, which can be printed or sent electronically via email or SMS.
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Payment Capture: The POS system captures the approved transaction details, including the authorization code and the final transaction amount. The payment processor then initiates the settlement process.
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Settlement: The payment processor sends the transaction details to the card network, which routes it to the issuing bank. The issuing bank transfers the funds to the restaurant’s merchant bank account.
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Funds Availability: It may take a couple of business days for the funds to become available in the restaurant’s merchant bank account. The exact timing can vary depending on the agreement between the restaurant and the merchant bank.
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Transaction Records: The restaurant keeps records of all credit card transactions for accounting and auditing purposes. This helps reconcile payments and resolve any discrepancies.
