Common Issues & Your Ideas

May 10, 2012

Written by: Savana Eckenrode

In today’s fast paced and technology based society, credit cards are becoming more frequently used than cash. According to CreditCard.com, over 200 million people have at least one credit card with the average of people owning about 3.5 cards. Restaurants have evolved and taken advantage of this type of payment, but the process of using online ordering and credit card integration is sometimes confusing. Without knowledge of the process or how it works, restaurants could actually be hurting their business rather than helping it.

When a restaurant has an online ordering system the easiest way for customers to pay is by credit card. This means that the restaurant needs to connect its online ordering website to the bank that its uses. The way to do that is by using a gateway. This gateway is going to provide the security of the transaction information and the means of transporting that information to the bank.

This procedure is fairly simple, and Authrize.net spelled out the process perfectly. First the customer will submit their credit card information for the purchase. The gateway will then pass the information to what is called the “processor”. The “processor” will then submit the purchase to the credit card network who sends the transaction to the customer’s bank. The bank will then decline or accept the transaction and sends the results back to the credit card network. The network then sends the results back to the “processor” who sends the results to the gateway and finally back to the restaurant who completes the purchase with the customer. The customer’s bank will then send the funds to the credit card network who then sends it to the restaurant’s bank who deposits the funds into the restaurant’s account.
The benefit of this is that restaurants do not have to create an infrastructure for the transactions as this is difficult for them to do. The gateway will do this all for them and it makes it easier on the restaurant. The restaurant does not have to install software and they can manage their accounts through the gateway to make any changes. The gateway also checks to see if the card number is valid and if there is enough money in the account.

The down side is that the gateway and the bank sometimes take a small percentage from the sales for themselves out of the transaction.

With the addition of credit card processing to a restaurant’s online ordering system the restaurant will make it more convenient for customers to purchase online. This means that customers may have the inclination to purchase more and do so more often, increasing purchase frequency. Overall credit card integration is something that restaurants with online ordering systems should include in their system to reap the benefits it provides.


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