by Ben Dwyer If you accept credit cards at your restaurant or cafe, you’ll likely see Visa’s Restaurant 1 or Restaurant 2 interchange categories.
The two categories essentially replaced Visa’s prior CPS interchange program, and apply to different consumer credit transactions. The broadest difference is that Restaurant 1 applies to card-not-present transactions and Restaurant 2 applies to card-present transactions.
There are additional “sub-categories” with Restaurant 1 and 2, but unlike with some other categories, there are actually only two different rates: one for consumer credit and traditional rewards and the other for the “luxury” rewards categories.
As of spring 2025, the rates and fees are as follows (subject to change by Visa):
Visa Restaurant 1
- Consumer Credit: 2.20%
- Rewards: 2.20%
- Signature: 2.70%
- Infinite: 2.70%
- Signature Preferred: 2.70%
Visa Restaurant 2
- Consumer Credit: 2.10%
- Rewards: 2.10%
- Signature: 2.60
- Infinite: 2.60%
- Signature Preferred: 2.60%
Like other interchange categories, Restaurant 1 and 2 have a “small merchant” program with its own rates. Unlike other categories, the rate is the same regardless of whether it’s Restaurant 1 or Restaurant 2. Additionally, the rates are actually the same for Restaurant 2 non-small-merchant, so there is no benefit for card-present restaurants. Card-not-present restaurants that qualify for small merchant will see a small reduction (0.10%) in interchange.
Restaurant 1 and 2 Small Merchant Program
- Consumer Credit: 2.10%
- Rewards: 2.10%
- Signature: 2.60%
- Infinite: 2.60%
- Signature Preferred: 2.60%
Note: Rewards, Signature, Infinite, and Signature Preferred are all rewards categories in Visa interchange.
Small Merchant Program Criteria
In order to qualify for Visa’s “small merchant” interchange categories, you must process $280,000 or less in Visa transactions per year. Once you exceed that amount, your transactions will instead be charged on the non-small merchant program Restaurant 1 or 2 rates, as you’re no longer eligible for small merchant rates.
Card-Not-Present Restaurant Transactions
Not all restaurants will have “card-not-present” transactions. CNP primarily comes up for takeout orders using an online payment system. If you don’t offer takeout, or if you accept takeout orders but diners pay when they pickup, Restaurant 1 won’t apply to your business.
Keep in mind that unless you are exclusively a takeout business with payment online or exclusively an in-person restaurant, you will likely see a mix of both Restaurant 1 and Restaurant 2.
Lowering Your Processing Costs
Restaurants are notorious for thin margins. It’s critical to ensure you’re not overpaying for credit card processing, which is one of the most expensive costs (after labor) for many businesses.
Check your processing statement for Restaurant 1 and 2 to ensure that you’re receiving the “wholesale” cost of interchange. (The rates listed in this article or in Visa’s published interchange table.) If you confirm that you’re already paying wholesale there are still options to lower your costs. You’ll need to focus on the processor’s markup, which is the only negotiable component of your processing fees.
To do that, you’ll need to be able to compare processor’s markups directly. Check out CardFellow.com’s credit card processing quote marketplace for help. With a free account, you’ll get fully-disclosed, competitive quotes from processors to review in private. You can compare to your current pricing or just to the other offers you get in order to find the right solution for your restaurant. Try it now at www.cardfellow.com!
