Content Hub | Gourmet Marketing

First Data Review

Written by matthew | Jun 2, 2016 1:57:22 AM

Your restaurant uses a Payment Gateway, Merchant Account and Operating System to process credit cards at the restaurant and take mobile payments online. There are fees associated with every step of payment processing. (We probably don’t have to mention that to you; restaurateurs complain regularly about taking credit cards and the mandatory fees that entails.) First Data is a major name in the financial services industry, and your restaurant probably uses the company’s services, even if you don’t recognize the name.

The quiet giant of payment processing is directly involved with creating and operating Google Wallet, the online payment system that has the power to transform how people pay for goods and services. The company provides credit card processing services and the POS hardware directly and through authorized resellers that include many major banks. Getting service directly from the company saves money, and restaurants receive 24/7 tech support and customer service.

For restaurants, First Data is likely to handle two out of three parts of every mobile payment. The company sells credit card processing terminals and services those accounts, but the company also is involved in transaction processing, which is when each credit card is verified, checked to see if the necessary funds are available and approved or declined.

Your Merchant Account is the easiest to get from your local bank, but the bank is just an authorized reseller that doesn’t handle the processing action of capturing real-time transactions, verifying cards and transferring the funds. Your payment processing company does that (usually contracted by the POS system that you use), and First Data offers direct POS services for retailers that include sharp equipment and a full suite of marketing services. Restaurants might prefer dealing directly with one of the major payment processing companies in today’s evolving digital marketing environment where increasingly larger percentages of business depend on mobile ordering and payments and new electronic and physical payment methods are constantly evolving.

First Data Background and History

Researching First Data’s background is like reading a history lesson about modern financial services. The company was the first to process bank-issued credit cards. American Express bought the company and spun it off, and the company formerly owned Western Union and MoneyGram. Partnering with Google and other companies, First Data was instrumental in developing Google Wallet, and the company often holds the credentials online that enable credit verifications of various cloud-based mobile payment methodologies.

First Data hopes to play a more direct role in payment processing by providing merchant accounts directly to retailers like restaurants. Payment processing is a huge part of global commerce. Credit cards date from the 1920s in the United States when fuel cards for gas companies were first issued to encourage automobile use. Bankamericard from Bank of America was the first modern-type of credit card and was launched in 1958. Master Card was organized in 1966 to challenge Bankamericard. Today, eCommerce happens anywhere on any type of device, and payment methods include digital wallets, debit and debit cards, direct ACH debits, Bitcoins, electronic fund transfers, digital checks, electronic coupons and other methods. First Data has more than 40 years of experience in payment processing and has been involved in all the major milestones in the world’s transformation from paying mostly cash to paying mostly with other payment options.

How First Data Works

First Data offers a comprehensive suite of POS tools, eCommerce capabilities and processing solutions for the rapidly evolving digital marketing and communications environment. Restaurants need a reliable processing company for mobile payments, tableside ordering and eCommerce sales. New kinds of payments other than credit and debit cards are becoming increasingly popular. Even credit cards are changing from magnetic stripes with encoded information to embedded EMV chips to prevent fraud. A First Data account will ensure that your restaurant can process any kind of payment — from mobile wallet payments to direct ACH debits.

  • The Clover terminals look sleek and compact while providing full POS functionality that you can scale up with Clover apps.
  • Advanced security features protect your restaurant from fraud, theft and hacking.
  • The system can connect all elements of your business wirelessly (in most cases) by using a simple broadband connection.
  • You can check on your website’s visitors directly from your POS terminal.
  • Fully equipped online payment processing enables you to use third-party advertising, customer loyalty, reservation-booking and delivery services.
  • You can turn paper checks into electronic transactions through TeleCheck Electronic Check Acceptance service.
  • You can grow your business across multiple lines of in-house and Internet-based sales at top processing speeds.
  • First Data’s online payment processing integrates fully with your Clover terminals for efficiency.
  • You can choose from various terminal designs to boost efficiency, including Clover Minis that are ideal for tracking inventory, managing employees and time keeping and providing access to BOH staff.
  • The system captures valuable information that restaurateurs can turn into actionable marketing plans.
  • You can connect with the system with cloud-based software from your phone, device or remote PC to run your business from anywhere, anytime.
  • The system’s tools include integrated analytics abilities that examine customer behavior so that you can optimize your prices and marketing strategies.

Effectiveness of Using First Data

Few POS systems offer as complete a range of solutions for all types of restaurants, bars and hospitality companies as First Data. The company is concentrating heavily on building the direct payment processing part of its business. Your restaurant can benefit by using this turnkey POS solution that will grow and adapt with your restaurant, and First Data offers ancillary financial services that can help your restaurant grow. You can offer your customers key benefits like cash advances or let them make commercial payments at one of your Clover terminals. Adding value helps to build customer loyalty and drive repeat visits and related sales.

First Data Competitors

First Data competitors include a range of credit processing companies, third-party restaurant services and established players in the financial and restaurant-services industries like PayPal, Square, Revel Systems and ShopKeep. Getting a First Data Merchant Account is like getting the Secretary of the Treasury personally to cash your paycheck — great for security and bragging rights, but not essential as long as he or she signs each federal reserve note. You should investigate the options, based on your needs, before committing to any system.

Areas of concern might include the equipment for traditional terminals, or you might do fine with a single iPad POS if you own a food truck. Just remember that scalable systems are the best, unless you plan to stay small and never grow. Some of the best systems for restaurants and top competitors for First Data include:

  • Host Merchant Services
    Based in Delaware, this company provides multiple POS solutions, mobile credit card processing, merchant cash advances and lots of eCommerce solutions for restaurants.
  • Shopify
    This provider of eCommerce services also provides robust POS systems for brick-and-mortar restaurants. Services include offline processing, mobile checkouts on iPads and Quickbooks integration.
  • Vend
    This payment-processing POS solution is a cloud-based system that is ideal for iPad, PC or Mac. The POS system is compatible with cash-drawer management, printers and third-party plugins.
  • TouchBistro
    This third-party payment processor offers features like tableside checkouts, check-splitting, staff management and order-syncing.

Costs of Using First Data

Some restaurant owners complain that First Data’s merchant services are more expensive than other processors, and we always recommend comparing at least two processors before choosing a system. However, research shows that if you buy credit processing services directly from First Data, the rates that are highly favorable when compared to other POS processing systems. Merchants can buy hardware and POS systems from major banks, such as Wells Fargo, Citibank, Bank of America and SunTrust, and from business suppliers and independent providers of merchant services.

Apparently, many reviews base their opinions that First Data service is more expensive than other companies on rates that are offered by the company’s authorized vendors. If you consult First Data’s published rates, you’ll find:

  • Swipe-in rate of 1.65% + $0.10
  • Key-in rate of +1.1% monthly dollar volume
  • Support, PCI compliance and and hardware support fees that vary

The average transactions fees of $113 for $5,000 in sales, $195 for $10,000 and $360 or$20,000 are lower than the average for the 10 top POS processors that include Square, Shopify, PayPal, iPayment, Accept, Bindo, TouchSuite, GotMerchant and Harbortouch. First Data also negotiates with each vendor for direct service, and if you can show that you need a lower rate or do enough business to generate leverage, you could negotiate a lower rate than those published.

Other issues are often more important than costs in today’s connected, competitive and fast-moving marketing environment. Restaurateurs have to consider whether their systems will accept all kinds of emerging payment technologies and whether the system supports tableside ordering, payment processing and payments made through third-party Internet services. Service with First Data ensures that you’ll probably be able to process most popular payment options that develop in the future.

Concluding Observations

Restaurant ownership is like being a parent — you’re either involved in every aspect of your business, or things get away from you. Payment processing is more crucial than ever when people are ordering online, prepaying for their meals on their phones and buying products on eCommerce restaurant websites. Some restaurants are even requiring deposits, prepayments and premium payments for guaranteeing reservations for prime seats and dining times. Payment processing is a critical issue that influences every aspect of the business.

What We Like

New financial regulations and greater card verification responsibilities face merchants in the future due to proliferating mobile payments in all aspects of modern life. Universal commerce promises to blend online and offline experiences, and payments are integral to processing funds electronically. Merchants face pressure to upgrade their equipment and processing abilities, so we like getting the latest sleek equipment directly from one of the major processing players. You’ll never need to worry about whether your restaurant can handle the latest payment technology as long as you have First Data merchant processing services.

What We Don’t Like

We don’t like the hardware issue that Clover terminals aren’t configurable to work with any processing provider. If you change providers, you’ll have to buy or lease new terminals, and this could make long-term use of First Data especially expensive for small restaurants that don’t process enough transactions to benefit from the lower rates that First Data provides its direct customers. If you buy your Clover hardware from a bank or get service from some of First Data’s provider partners, you could face higher transaction rates because First Data allows its authorized vendors to set their own rates for reselling.

Final Assessment

Regardless of how directly involved with payment processing issues any restaurateur chooses to be, we recommend getting a working knowledge of the issues. Restaurants face greater pressure to verify credit cards and bear responsibility for fraudulent usage, so learn the issues. You should also speak with at least two or three merchant processors before signing their contracts.