A Simple Way to Reduce Credit Card Processing Costs

We frequently talk with operators about credit card processing fees and how they can control their costs. Nobody would characterize credit card processing rules as simple to understand. In fact, it almost seems as if they are intentionally obtuse.

One simple way to think about credit card processing is that in any transaction there is typically a percentage portion and a fixed portion. The fixed portion could be anywhere from 10 cents or as much as 30 cents for example on a Stripe or Square online payment. That fixed portion can be substantial when you consider it as a percentage of the sale. If you sell A $10 burger or beer, that fixed amount might represent 3% or 2% of the transaction. The more transactions, the more of those fixed portions you must pay.

If the same person buys a $10 burger and an $8 beer in separate transactions, you’ve now paid that fixed portion, i.e., the $0.15 or $0.30 twice. But what if they opened a Tab?

Save with Open Tabs

As an alternative, if the guest opened a tab and purchased a burger, then purchased a beer, the merchant would only have to pay that $0.15 or $0.30 one time. GoTab makes it super easy to open a Tab with a simple dip or tap and we offer merchants multiple ways to make it easy for their guests to do so. 

Servers can open a tab at the table using the Pocket POS, or the counter using the Customer Facing Display. One of the more seamless ways we offer merchants to open guest tabs is through Easy Tab, our patented process for sharing a Tab with guests while avoiding any cumbersome setup steps by the guest. 

With Easy Tab, merchants will open a tab much like they normally would with a credit card at a bar or at a host stand. But then, GoTab sends a text message to the guest that allows the guest to access their open Tab, and the menu for subsequent orders, on their mobile device. So, if the guest is enjoying their beer and spontaneously decides they’d like to buy a burger, or a dessert for someone else, they have the tab on their phone with the credit card already associated. That second order for the burger or the dessert is just going to get attached to that first credit card tap or dip transaction that they did at the bar or the host stand. The merchant doesn’t incur a new fixed portion charge. The merchant received that spontaneous upsell, and avoided the additional transaction cost, lowering their effective transaction processing costs.

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