Part of running a restaurant is making peace with chaos: the 86s, the no-shows, the double-sat sections, the fryer that dies during a rush. But the one thing that should never break under pressure is your payment system. The payment experience at the end of the meal is the final impression you make on your guests and it can either confirm a great experience or sour it in the final stretch. Below, we'll discuss what you should know about restaurant payment processing to keep that moment simple and secure.

What's in this article?

• What is restaurant payment processing and how does it work?
  
• What are the best payment methods for restaurants?
  
• How do restaurant payment terminals work?
  
• How Stripe Terminal can help
  

What is restaurant payment processing and how does it work?

The global market for full-service restaurants is worth an estimated $1.65 trillion in 2025. Restaurant payment processing is the system that handles customer payments in restaurants. When the customer pays their bill, payment processing moves money from the diner's bank account to the restaurant's bank account.

Here's how this works for card payments:

• Card capture: The customer pays via swipe, chip or tap, or by entering card details online.
  
• Authorisation request: The restaurant's payment terminal or payment gateway sends the encrypted payment info to a payment processor.
  
• Routing: The processor forwards it to the card network (e.g. Visa, Mastercard) which checks with the customer's bank.
  
• Approval or denial: The bank approves or declines the transaction.
  
• Settlement: If the transaction is approved, funds land in the restaurant's merchant account minus processing fees, usually within a few days.
  

There are two types of card transactions:

• Card-present: These are in-person payments. They come with lower fraud risk and lower fees.
  
• Card-not-present: These are online or keyed-in payments. They come with higher fraud risk, higher fees and extra security steps such as entering a post code.
  

In both cases, the system checks whether the card is valid and whether the associated bank account contains enough money. Then, it confirms or declines the payment and moves the funds into the restaurant's account.

What are the best payment methods for restaurants?

The best payment methods are the ones your customers already use. If you're unable to accept a customer's preferred payment method – whether that's a credit card, digital wallet or even cash – you're creating a more difficult payment experience.

Here's a closer look at some of the most common payment methods:

• Cash: While cash usage is declining on a global scale, businesses are still legally required to accept it in certain places, such as Norway and New York state. In many regions, it still plays an important role in paying tips or covering small orders.
  
• Credit and debit cards: Cards dominate in many regions, particularly in the US and Europe, for both in-person and online payments. You should be able to accept chip, swipe and tap payments.
  
• Digital wallets: Digital wallets like Apple Pay, Google Pay and Alipay are used globally, and this method is especially popular in Southeast Asia. If your card reader can accept Tap to Pay, you're already set up for this.
  
• QR code payments: QR code payments can be useful in fast-casual and hybrid settings – anywhere you want to turn tables faster or give customers more control. Ensure the web page associated with the QR code is easy to navigate and loads quickly, or you might lose customers. When done well, QR code payments can reduce labour overhead, speed up payments and free up staff to focus on other work.
  
• Gift cards: Gift cards bring in money up front and encourage repeat business. If your restaurant offers them, your staff needs to know how to process them and you'll need a system that can track balances and support partial payments. Gift cards can be especially popular around the holidays.
  

Find out what payment methods your customers already use and build from there. Update your setup when you start to see patterns emerge.

How do restaurant payment terminals work?

A payment terminal processes card and digital wallet payments for your restaurant. Your terminal might be a countertop reader at a quick-service till or a mobile device your servers carry to the table, but the basic job it performs is the same.

When a customer inserts a Europay, Mastercard and Visa (EMV) chip card, swipes a magnetic stripe or taps a phone or watch, the terminal captures the necessary card data and encrypts it for transmission. The terminal sends the card information to your payment processor via Ethernet, Wi-Fi or mobile, depending on the device. Some terminals use Bluetooth to connect to a phone or tablet which then sends the data through your mobile connection.

The payment processor communicates with the card network and lets the terminal know whether the payment has been approved or declined. If it's approved, the terminal finalises the transaction. Depending on your setup, a tip screen or signature screen might appear next. Finally, the terminal prints the receipt or sends it to the customer digitally.

Here are the most important qualities to look for in a restaurant payment terminal:

• Speed: If it takes more than a couple of seconds to process a payment, it's already too slow. Laggy terminals create bottlenecks, especially during a rush.
  
• Payment versatility: Your terminal should support multiple types of payment, including chip, swipe, tap and digital wallets.
  
• Reliability: You want something that won't glitch, freeze or drop signal. Long battery life is also important.
  
• Tip flow: Handheld devices that let guests add a tip and complete the payment right at the table are convenient and can save time.
  
• Point-of-sale (POS) integration: The best terminals sync the bill details automatically. That eliminates manual entry work and minimises errors.
  
• Mobility: Bringing the terminal to the guest's table is faster and can feel more trustworthy for customers than taking their cards from the table to a countertop terminal.
  

How Stripe Terminal can help

Stripe Terminal allows restaurants to grow revenue with unified payments across in-person and online channels. It supports new ways to pay, simple hardware logistics, global coverage and hundreds of POS and commerce integrations to design your ideal payment stack.

Stripe Terminal can help you do the following:

• Unify commerce: Manage online orders and in-person payments on a global platform with unified payment data.
  
• Expand globally: Scale to 24 countries with a single set of integrations and popular payment methods. The infrastructure and the back end stay the same, no matter how many tills or ordering channels you have.
  
• Integrate your way: Develop your own custom POS app or connect with your existing tech stack using third-party POS and commerce integrations.
  
• Simplify hardware logistics: Easily order, manage and monitor Stripe-supported readers, wherever they are. Or skip the hardware altogether with Tap to Pay.
  
• Stay compliant: Stripe is a certified PCI Level 1 service provider, the most stringent level of certification available in the payment industry.
  
• Prevent fraud losses: Stripe Radar monitors for suspicious behaviour. You can customise it to flag high-risk orders, set up alerts or add verification steps as needed.
  

Learn more about Stripe Terminal or get started today.