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Why Your Processing Rates Are Higher Than They Used to Be – But Still May Be Higher than They Should Be


Let’s face it, the payments space can be pretty confusing… sometimes intentionally so. At GoTab, we try to provide our operators a clear understanding of what goes into processor fees, and how they can apply a strategic approach to managing these costs.

The Growth in Digital (Card Not Present) Payments

According to Credit Union Service Organization PSCU’s 2021 Eye on Payments study, “consumers who reported using a mobile wallet in the past 60 days increased by 50% from 2019 (14%) to 2021 (21%), with 30% reporting that they use a mobile wallet at least a few times per month.

This growth in mobile payments means that more of your payments are carrying higher card not present (or ‘keyed’) processing rates. Which also means you’re probably experiencing a bit of sticker shock right now if you’re an accountant, or business owner working with an accountant, who is looking at where you can reduce costs.

While Card Not Present fees, which are determined by the card issuer, payment networks, and payment processors, are higher than Card Present fees, we often see unreasonable markups under the guise of “card not present.”  In general, card not present costs about one half of a percent more than card not present but Toast, for example, is charging a full 1% more.  And the fun part of Toast pricing is that the Pay as You Go model doesn’t include the additional 0.4% that you have to pay for online ordering (that is better hidden in the details).

Better Ways to Manage Your Processing Costs

Navigating the payments world can be mind-numbing, especially for SMB owners who don’t have the time or bandwidth to fully evaluate their options.  Unlike other hospitality-based technology companies, GoTab does not tack on additional fees to owners already operating on small margins.

Part of our value proposition is to offer the lowest processing rates in the marketplace. Our rationale is if we deliver on our promise of higher check averages and happier customers, we all win. But that still leaves operators in a bit of a quandary when they’re struggling to find cost savings. We address this issue by giving our operators the discretion to cover those costs in a way that works best for their business.

Instead of charging additional payment processing fees to operators, GoTab incorporates a small convenience fee on each tab opened by guests via QR code ordering. Customers are willing to pay this small fee due to the superior ordering and payment experience. This convenience fee allows operators to benefit from GoTab’s innovative technology, fair and transparent processing rates, and high-caliber customer service without increasing their effective rate.

If you’ve experienced, or are dreading, that proverbial sticker shock moment, talk to us. We’d love to help you figure out a cost-effective model for your business.


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