Restaurant POS & payments glossary

Cash Discount

A program in which the menu price assumes the customer is paying with a card; cash payers receive a discount at the register. Cash discounts are allowed under federal law (the Durbin Amendment); card-network and state rules on signage and pricing still apply. It shifts much of the card processing cost away from the operator.

Cash Discount vs Surcharge — full guide →

Surcharge

A fee added to a card transaction at the register. Allowed in most U.S. states but capped (typically 3–4%) and restricted in some — and card brands have their own rules. Generally feels worse to customers than Cash Discount.

Compare Cash Discount vs Surcharge →

Interchange

The wholesale fee paid by the merchant's bank to the cardholder's bank for processing a card transaction. Set by Visa/Mastercard/Discover and varies by card type (debit, credit, rewards, corporate). Interchange is the largest component of the fee you pay on every card sale.

Interchange-plus pricing

A pricing model where the merchant pays the actual interchange cost plus a fixed markup (e.g., 0.20% + $0.10). Considered the most transparent pricing model.

See PalomaPOS pricing →

Flat-rate pricing

A pricing model where the merchant pays the same percentage regardless of card type. Easy to understand but typically more expensive than interchange-plus for restaurants over ~$15K/month in card volume.

Same-day funding

A payout schedule in which the merchant receives card sale proceeds the same business day. PalomaPOS includes same-day funding, with an instant funding option.

PCI Compliance / PCI-DSS

Payment Card Industry Data Security Standard — required compliance program for any business that accepts cards. Many providers charge $5–$25/month in PCI fees — ask any provider what PCI costs and who handles which part of compliance.

EMV (chip cards)

Europay, Mastercard, Visa — the global chip-card standard. Required at point-of-sale for fraud-liability protection in the U.S. since 2015. PalomaPOS card payments run on EMV-certified Valor terminals.

Tokenization

The process of replacing a card number with a non-sensitive token. Lets you store a customer's card-on-file for future charges (e.g., for online ordering) without storing the actual card number.

POS (Point of Sale)

The system at which a transaction completes — both the hardware (terminal, kiosk, handheld) and the software that runs orders, payments, and inventory. PalomaPOS is a complete restaurant POS plus embedded fintech.

PalomaPOS POS overview →

KDS (Kitchen Display System)

A digital screen in the kitchen that replaces paper tickets — receives orders directly from the POS, lets cooks bump tickets when items are ready, and tracks ticket time. Essential for fast-paced quick-service operations.

PalomaPOS Kitchen Display →

Modifier (POS)

A customizable option attached to a menu item — e.g., 'no ice', 'extra shot', 'half sweet'. Good restaurant POS systems support modifier groups (mandatory choice between options) and conditional modifiers (one option unlocks another).

Online ordering

A web or mobile interface where customers place orders directly with the restaurant. Direct online ordering avoids marketplace commissions (so the restaurant keeps more of the sale) and route orders directly into the kitchen flow.

Tip pooling

A method of distributing tips across staff (e.g., front-of-house, back-of-house, by hours worked, by role). Modern POS systems can automate the tip pool calculations.

Embedded banking

Banking services delivered inside another platform — e.g., inside your POS. Lets you manage cash flow without a separate bank app, and gets paid by the same system that processes your sales.

PalomaPOS Embedded Banking →

Cash flow

The timing of money coming in vs going out. For restaurants, same-day card payouts (vs next-business-day) improve cash flow — especially important for food trucks, small cafés, and operators with tight inventory cycles.

Average ticket size

The average dollar amount per transaction. Critical for calculating real processing costs — flat-rate pricing tends to favor higher-ticket businesses, while interchange-plus pricing favors lower-ticket high-volume operations.

Offline mode

A POS feature that lets you keep taking card and cash orders when internet is down — transactions queue locally and sync when the network returns. Critical for food trucks, basements, and event venues.

Multi-location reporting

A POS feature that aggregates sales, labor, and inventory data across multiple restaurant locations into a single dashboard. Required if you operate or plan to operate more than one location.

Cash discount signage

Compliant pricing displays required to legally run a Cash Discount program — typically near the register, on menus, and on receipts. PalomaPOS provides signage free with every Cash Discount setup.

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