It took three years to build a portfolio of 3,000 merchants at Unified Payments, an independent sales organization based in North Miami Beach, Fla. A year after the ISO started its charitable giving subsidiary, Process Pink Payments, that number reached 5,000. By the end of 2012, it reached 15,000 merchants for Process Pink and more than 100,000 merchants overall.

That was exactly the result Anthony Holder had in mind when he started Process Pink back in 2008.

With the recession under way, the Lodi, Calif.-based divisional president of Unified Payments had hit a plateau with business. The ISO was struggling to keep up with attrition, its portfolio wasn't growing and transaction services were becoming a commodity.

That's when Holder decided to think up a strategy to distinguish his business. But he knew he couldn't simply try his luck with a risky scheme. He had watched competitors flood the market with ancillary products and services — from PCI compliance to rewards.

"As soon as one differentiating product comes out, there are a dozen different competitors," he says.

So Holder chose charity. His aunt had died of breast cancer, as did his business partner's grandmother. So the pair picked the National Breast Cancer Foundation Inc. as its chosen charity and dubbed its brand Process Pink.

The ISO launched Process Pink in October to coincide with National Breast Cancer Awareness Month. Every merchant that signs up for Process Pink gets a pink terminal to raise brand awareness. The ISO then donates one basis point of that merchant's total Visa and Master Card transaction volume. The merchants pay no additional fees.

This year Process Pink is guaranteeing $400,000 to the foundation for breast cancer research, up from $150,000 it donated in 2010.

"It's truly allowed us to work past that plateau that we had," said Holder, now president of the Process Pink Payments unit and of the cause-based marketing section of Unified Payments.

Holder says Process Pink helped Unified Payments earn the top spot in Inc. Magazine's 2012 list of the 5,000 fastest growing private companies in the United States.

Cynergy Data, a Long Island, N.Y.-based ISO, is taking a similar approach, using the DonateWiseNow program to collect charitable donations at the point of sale.

Handling charitable donations gives ISOs and agents an edge, says Carrie Rattle, chief marketing officer for Cynergy Data. It also gives them "incremental revenue. And a halo to their own personal brand because they're offering a value-add that's almost undeniable."

ISOs rely on varied approaches to giving. Some help merchants collect donations by enabling customers to chip in an extra few bucks at the end of a transaction. Others sacrifice a portion of their monthly processing revenue, all in the name of giving and portfolio building.

Whatever the approach, ISOs say raising money for charity provides a more lucrative and rewarding way of selling than relying on price or on heavily used value-added services such as gift and loyalty cards or mobile marketing.

But even though ISOs say they've had more success with charity than with other value-added services, that doesn't mean every donation strategy will work.

When DonateWiseNow President Robert DiMattina created the program for Cynergy Data, he didn't want to replicate the often-used point-of-sale fundraising strategy of having a cashier ask a customer if she wants to donate $1, which usually goes to some faraway charity the store's corporate office selected.

Through his research, DiMattina found that customers were irritated because it seemed as though every time they went to a larger retail establishment, the clerk asked for a donation.

So, DiMattina developed DonateWiseNow to include a consumer-facing signature-capture device to help customers donate in a subtler manner. After the terminal prompts the customer with the sale total, the next prompt asks whether the customer wants to complete the transaction with a donation. The customer can select a $1, $3 or $5 contribution, or round up the transaction to the nearest dollar.

"We wanted to create a very discreet experience for the consumer," DiMattina says.

As a registered fundraiser in all 50 states, DonateWiseNow is targeting small to midsize merchants to give them an opportunity to affiliate with any local or national charity they choose.

Affiliating with local charities helps merchants bond with their community, Rattle says. And when merchants choose a charity whose mission is closely aligned to their own business, such as a vet choosing an animal rescue shelter, they tend to attract more donations. 

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry