Let’s Talk Money: Restaurant Payment Processing & Card Not Present (CNP) Transaction Fees

There’s a sneaky little secret that can catch restaurants off-guard if they’re not careful.

It has to do with credit card processing fees – those transaction charges that every merchant pays when their customer uses a credit or debit card.

They’re typically a small percentage of the total charge plus a few cents. Not much for one transaction, but they can add up quickly when you’re processing hundreds of transactions a day. Some restaurants have even reported that they’re the 3rd largest cost behind food and labor every month.

However, there are different kinds of transaction charges, and their fee structures are different. The two types that restaurants have to worry about are Card Present (CP) and Card Not Present (CNP). 

You would think that, since guests typically have their credit or debit cards in their hands or on their phones, all restaurant charges would be Card Present transactions, as the name would suggest.

But there’s a catch – sometimes restaurants are charged for Card Not Present transactions, which carry higher fees than CP charges.

Why, you ask? Let’s dive in.

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So What’s a Card Not Present (CNP) Charge?

A CNP charge is the transaction fee for when a purchase is made, but the card is not physically presented to the business. This type of credit card processing fee typically applies when purchases are made online or through an app.

Because the card isn’t presented to the business in person, there’s a higher risk of fraud. That’s why fees are higher – Card Not Present (CNP) transactions need additional security measures for verification.

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How do CNP charges apply to restaurants?

It all depends on how the restaurant handles payment processing.

If it’s your typical swipe, tap, or dip, they get charged the lower CP fee since the card is physically there and can be verified at the terminal.

Buuuuut, if the restaurant is using QR codes or other mobile/online processors to run their transactions, additional verifications are needed, and they get hit with a higher CNP charge.
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These higher fees can add up quickly.

CNP fees are usually 37-45 Basis Points, or .37% to .45%, higher per transaction than CP fees. Not much, but when you’re welcoming hundreds of guests, these fees can add up to hundreds or even thousands of dollars a day. It could be as high as double the rent every month.

That’s money a restaurant could be putting directly towards its bottom line if they were processing at the lower CP fees.

In the restaurant business, every cent counts, and if there was a way to lower these fees, a restaurant would jump at it, right?

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Ziosk Always Processes as CP

Luckily, there is! Ziosk always handles restaurant payment processing at the lower Card Present rate. That’s because we accept swipe, dip, or tap payments – including all the current mobile wallets – and the transactions are processed directly and securely with the major credit card processors. Even for curbside, Ziosk uses our tablets to process payments right at the car, bypassing an online transaction and a CNP fee for the lower CP fee.

By this alone, Ziosk could pay for itself every month. And this doesn’t include chargebacks or integrity fees Ziosk eliminates as well, but that’s a post for another time.

Card Not Present (CNP) transaction fees can be pretty sneaky for restaurants – quickly adding up to put a dent in their bottom line. It’s worth taking a look at how you process credit cards to see if you’re paying CP fees or the higher CNP fees. Switching your process could save you hundreds, if not thousands, a day.