A differentiator that makes a difference: ISOs align with charities
One way for acquirers and independent sales organizations to stand out in a highly competitive field is to devote a part of their business to worthy causes.
Not only is it possible to do, but it helps the company's image and brand among its merchant clients in knowing that a portion of revenue is going to a charity they support, executives of those types of agencies say.
It is not a matter of setting aside a business to focus on more charity, said Jeff Marcous, co-founder and CEO of Dharma Merchant Services, a company registered as a certified benefit corporation that has donated as much as $250,000 to nonprofit groups. Rather, it is to give the business an entirely new focus that helps others.
A practicing Buddhist, Marcous said he was inspired by an article he read that encouraged business executives to use their livelihood for a deeper meaning, or "awakening."
For Dharma Merchant Services, that meant helping as many groups in need as possible.
"If an awakening of this sort is not part of your business life, then when is it?" Marcous asked at last week's annual Midwest Acquirers Association conference in Chicago. "Is it just a little bit on Sunday morning?"
It is not easy to qualify your company as a benefit corporation, because of the standards the company must uphold related to its policies and care for the environment and other factors, Marcous said. His research on the topic indicated that as many as 40,000 companies seek such a status, but only 2,500 B-corporations have been established in the U.S.
"It's a honor to get through the assessment and it's a trend that ISOs should consider," he said. "It is the right thing to do, and my small ISO gets more business for what we are trying to be, rather than for what we do. We attract companies that like what we are doing."
An ISO doesn't have to be large to make a difference for charitable causes.
Andy Kinnecom, president and CEO of Swipe for a Cause, says he operates the smallest ISO in the smallest state of Rhode Island. But his business has fared well since embracing hospice care and donating 5% of the company's revenues to that cause.
Kinnecom left years of hotel industry work to create an ISO that would help hospice care.
"When we formed the ISO and told merchants what we were doing, people were very receptive to it," said Kinnecom, who said he was moved by many instances in which he saw hospice provide the care prior to the passing of employees, friends and family members.
Swipe for a Cause supplies the merchant with point-of-sale materials to inform customers of the charitable donations they are making with each card swipe, and the company meets with business, community and state leaders to inform them of the funding initiatives for various hospice organizations.
Robert Carr, former CEO of Heartland Payment Systems, started his own payment processing company called Beyond in 2013 to benefit the Give Something Back Foundation. Carr founded that organization in 2003 as a way to help low-income youths attend college.
"We went down as far as sixth grade to find students who were in need, many of them minorities," Carr said. "We've learned a lot over the years, and we are now prepaying the universities for these college educations, so the kids don't have to pay."
Beyond has purchased 1,500 four-year college education programs with 29 universities around the country, Carr said. "The students have to go through high school and college prep program to qualify," he added. "The $20,000 we have allocated for each kid helps get them through college."
In monitoring the accomplishments of Beyond, Carr said the program has yielded a 91% college graduate rate with the students it has supported.
The company operates under Carr's premise that "the best thing you can give to somebody who otherwise thinks they have no chance, is to give them the gift of a college education."
Ultimately, ISOs and agents should challenge themselves to make a commitment to determining how their companies can give back to their communities, the executives said.
They also encouraged ISOs to define how philanthropic actions help the company get results, and post success stories on social media channels to spread the word.
Prior to the presentation, the MWAA reported it would donate $2,000 to the charitable cause of each company.
Carr's recent legal troubles with Heartland and the U.S. Securities and Exchange Commission did not come up during the presentation nor afterward when he was visiting with MWAA colleagues. Carr was accused by both Heartland and the SEC of insider trading related to the Global Payments' acquisition of Heartland, and the role Carr's girlfriend had in purchasing stock in the company.
Carr's legal team contends that the former Heartland executive had discussed the stock sales with the company's legal officer prior to its $4.2 billion sale to Global Payments.