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Table of Contents

Lead Story

Fostering a payments culture of giving

News

Industry Update

EMVCo to improve standard for e- and m-commerce

New payments player teams with Dallas Cowboys

Google the latest billion-dollar settlement denier to sue Visa, MasterCard

Softcard hits another snag, lays off staff

Features

The IoT - fact or fiction?

Education key to mobile adoption

ISOMetrics:
Data breaches across America

Views

Risk worth the reward High-risk: A macro perspective

Jeffrey Shavitz
Alternative Merchant Processing Inc.

Retail, why bite the brand that feeds you?

Dale S. Laszi
DSL Direct LLC.

Education

Street SmartsSM:
Pushing the limits of sales seasonality

Tom Waters and Ben Abel
Bank Associates Merchant Services

ISO goes to court: What to expect

Adam Atlas
Attorney at Law

Techology tools and tips to grow your business

Vicki M. Daughdrill
Small Business Resouces LLC

Company Profile

Expansion Capital Group LLC

New Products

Intelligent choice for connected,upscale dining

Owl
OMNI Brain Lab

Portfolio management to protect revenue, prevent chargebacks

Cardholder Dispute Resolution Network
Verifi

Inspiration

The Internet of people

Departments

Readers Speak

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

January 26, 2015  •  Issue 15:01:02

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Fostering a payments culture of giving

The payments industry's desire to give back is reflected in myriad ways, from innovations in technology to small acts of kindness. This philanthropic heritage dates to the earliest payments schemes that have evolved into app- and cloud-based systems capable of seamlessly directing funds to charitable causes.

Payment professionals have historically played a central role in charitable giving, both from a technology standpoint and from a collective organizational culture. In addition to their involvement in selling and supporting donation-processing systems, many ISOs and merchant level salespeople (MLSs) participate in community and global initiatives.

Charitable giving efforts in the payments value chain include card brand affinity programs, major bank initiatives, mobile apps and e-commerce donation platforms. Following are examples of how individuals and companies in the payments industry are making a difference locally and on a global scale.

An ISO processes hope

Charitable giving is an integral part of New York ISO CurvePay LLC. Amedeo Dino Sgueglia, the company's Chief Executive Officer, said that charitable activities will continue to play a big role in his company's future.

"It's always been important to me to give back and make a difference," Sgueglia said. "Being the father of a nonverbal autistic son, [charitable giving] is important to me and a core value. I started Danny's Wish in late 2009, a charity that provides life-enhancing resources for families of autistic children. In an effort to fund Danny's Wish and other charities, I started The Hope Process."

Sgueglia named Danny's Wish after his son. The experience of managing a nonprofit helped him understand how fundraising activities and operational challenges can impact nonprofit organizations. He resolved to improve these processes for his own and other nonprofits, which prompted him to establish The Hope Process.

The Hope Process is designed to create recurring revenue for charities while offering merchants a rebate from credit card processing profits that they can keep or have CurvePay forward to a charity of their choice. Sgueglia describes it as a win-win, costing merchants no more than they're already paying for existing credit card processing.

"Merchants provide donations to the charity of their choice by doing exactly what they do every day, without spending extra money," Sgueglia said. "Charities in turn can benefit by receiving recurring donation revenue at no cost." He added that merchants who donate their rebates to their favorite charities also gain a tax deduction. Marketing benefits for enrolled merchants include store signage, free publicity and the ability to publicly demonstrate to their customers that they give back with every dollar spent on a credit card. Merchants can donate processing rebates to as many as eight registered charities per year.

CurvePay's free, patented mobile app gives merchants the ability to monitor their accounts, set up fraud and chargeback alerts, and view donations and credit card processing activity.

The Hope Process markets directly to charities and merchants through various channels, including the Internet, social media, referral partners and word of mouth. While CurvePay agents can also market The Hope Process, the MLS offering has not seen the same high adoption rate as other channels, ostensibly because merchant rebates can lower an agent's revenue, Sgueglia noted.

An MCA company pays it forward

Charitable giving is a shared philosophy at Yellowstone Capital LLC, a merchant cash advance (MCA) company based in New York City's lower Manhattan. Company CEO Isaac D. Stern said that employees will routinely discuss favorite causes at the office and then ask, "Who's in?" "Our team is lucky to be in a position to help others," Stern said. "People who do well have a tendency to want to give back. It's an awesome feeling to do some good in the world." He added that using credit cards to make automatic, recurring payments throughout a year has made charitable giving easy and convenient.

Stern serves on the board of a charity that rounds up utility and grocery bills for unemployed people in need of assistance. The organization has strict privacy guidelines, ensuring that the people who give are never directly in contact with recipients.

Yellowstone also has a long-standing relationship with Hatzalah Volunteer Ambulance Corps Inc., based in Union County, N.J. When Hatzalah Chief Executive Yudi Abraham joined the company in 2010, he inherited an organization that was in debt and close to going out of business, with an ailing ambulance that needed to be replaced. Stern and team came to the rescue, raising enough capital in four days to buy Hatzalah a new ambulance. Since then the team has donated three more vehicles to the company's fleet.

Abraham called Stern an active partner of Hatzalah, a charismatic leader and a true friend. "We're a one hundred percent volunteer organization, from our Emergency Medical Technicians, to our dispatchers, to our administrators, to our Board of Directors," Abraham said. "No one receives any compensation. We have always depended on donations, and year after year, Yellowstone has been our largest benefactor."

Stern noted that an all-volunteer organization with no administrative costs means every dollar raised will go to new supplies. He and his team have been proud to support Union County's volunteer team of first responders, who are on call in a business where every minute counts. Four years ago, the team resuscitated a sixteen-year-old girl whose heart stopped beating. Last year, that same girl graduated from college.

"If these guys are willing to [be on call 24/7], the least we can do is to write a check," Stern said. He went on to say he's grateful his employees feel the same way, because giving is a joy for some people and a pain for others.

A mobile app closes the hunger gap

"What if hunger ended with you?" asks Spare Change Inc. at http:sparenyc.org, the startup's home page for the mobile app, also named Spare, which launched initially in New York City. The company partnered with four nonprofit organizations to feed the city's hungry: City Harvest, City Meals on Wheels, Food Bank for New York City, and New York City Rescue Mission.

Co-founders Andra Tomsa and Rameet Chawla noted a "meal gap" in New York City comprised of 235 million missing meals; approximately 2.6 million New Yorkers are unable to feed themselves and their families. To address that problem, Tomsa and team developed a mobile app that enables consumers to round up their credit card bills, allocating spare change to organizations that feed the hungry.

Participating consumers earn monthly rewards for rounding up at Spare partner restaurants. In the three-level reward program, they can earn a drink when they reach three round ups, an appetizer or dessert at five round ups, and a $15 discount off a restaurant bill at 10 round ups.

Spare users can share their activities on Twitter and Facebook and leverage built-in analytics to track how many New Yorkers that they and fellow Spare users have assisted. They can also view an infographic that tracks the diminishing meal gap in real-time.

Spare's mobile app makes rounding up simple. Users can round up their tab to the nearest dollar or they can choose to quick-click a 99-cent donation button. Round-ups can be done anywhere, but only round-ups at partner restaurants will count toward rewards. The app will track a user's reward status at restaurants and keep a running tally of earned rewards and near-term, next-level rewards.

When users redeem rewards, they're sent to a screen with a 10-minute countdown. The reward expires at the end of the 10-minute window. Staff members at participatingpartner restaurants are trained to provide patrons with rewards when they see the countdown screen.

Spare is still in pilot mode in New York City, with plans for a national rollout. Spare partner restaurants receive free publicity in exchange for committing to the app's standard three-level reward program. Spare sends monthly reports to its partners. Each report details the locations and number of rewards redeemed by the restaurant's customers.

"I'd like to stress that for as little as $6 a month donated by a mere 10 percent of New Yorkers, New York City can close its own meal gap within one single year," Tomsa said. "Spare is a viable solution to a very serious social problem. We have reached a time in history where technology should be able to alleviate issues afflicting basic human needs, such as access to food."

A bank follows its philanthropic roots

JPMorgan Chase & Co. has carried the philanthropic legacy of J.P. Morgan into the twenty-first century by helping clients and communities address economic and social challenges. The bank is one of the world's oldest and largest financial institutions. Its history dates to 1799 when its first bank was chartered.

The organization noted that it marshals its considerable resources and global reach to make a positive impact, donating in excess of $210 million in 2013 to thousands of nonprofit entities from disparate locations across the United States and world community. Today it supports a variety of philanthropic initiatives, including workforce development, financial capability, small business development, community development and affordable housing.

"We are fully committed to strengthening the communities where we live and work," said Kimberly Fitzsimmons, U.S. Market President for Chase Merchant Services, the firm's global payment processing, merchant acquiring and offers business. "At JPMorgan Chase, we strive to develop innovative programs that leverage the core strengths, capabilities and expertise of our business and our people – and those of our partners – to maximize our impact.

"One of the myriad payment solutions we offer through Chase Paymentech's Orbital Payment Gateway is Managed Billing, which enables merchants to offer recurring, deferred or installment payments to their customers. This feature can be useful for merchants to support local charities in their communities."

JPMorgan Chase uses its Employee Engagement and Volunteerism Team to encourage employees to participate in various initiatives, enabling thousands to volunteer in meaningful activities that serve and add value to communities within the company's footprint.

Technology for Social Good is one such initiative that focuses on developing solutions that improve people's experience with technology. "Technology is a powerful tool," Fitzsimmons said. "Technology can transform nonprofits, helping them to work smarter and achieve more.

"However, for many nonprofit professionals, technology is a source of confusion and frustration. As part of our commitment to giving back to our communities, Technology for Social Good is a firm-wide program focused on harnessing the technology strength and skill of our employees to develop solutions that benefit the social sector."

A 'B corp' harnesses resources for the greater good

San Francisco-based Dharma Merchant Services is a certified B corporation recognized for using the power of business to solve social and environmental problems. The company's mission is to provide excellent service while showing compassion for environment, community customers and each other. It was co-founded by Jeff Marcous and his daughter Alexia Marcous. Together they have taken the company from an initial concept of "commerce with compassion" to a richly rewarding and successful partnership with like-minded merchant companies.

"When I conceived of Dharma Merchant Services, I realized that if we continued to operate as individuals working independently, we would never achieve the critical mass needed to create meaningful social change," Jeff Marcous said. "And we could hardly expect our current polarized government to do the right thing, but business is ubiquitous. No other institution since the dawn of man has effected such incredible change in the human condition."

Team Dharma dedicates human and financial capital to charitable causes and views the greater business community as a potentially limitless platform for social change. Marcous, his employees and the company's merchant partners consider it an opportunity and obligation to support the community of need, relieve the suffering of others and make the world a better place.

"When people begin to grasp how all things are interconnected, they are no longer satisfied with simply chasing profits and lining shareholder pockets; they want to contribute to all of the stakeholders in our extended human family," he said.

Inspirational stories can be found in the Merchant-of-the-Month section of the company's website www.dharmamerchantservices.com. Portland, Ore.-based Northwest Earth Institute, established in 1993, is one example. The company's charter was to "to give people a framework to talk about our relationship with the planet and to share in discovering new ways to live, work, create and consume."

The EcoChallenge is one of many programs institute has created over the last 20 years, and is described on the website as, "an annual event that challenges people to choose one action to reduce their environmental impact and stick with it for two weeks. By visiting www.ecochallenge.org, individuals and teams pick a category—water, trash, energy, food or transportation—and set a goal that stretches their comfort zone and makes a difference for themselves and the planet."

In an extraordinary but typical act of reciprocity with its merchant partner, Dharma rose to the EcoChallenge by committing to go "zero-plastic" for the two-week challenge period and beyond, adopting the practice as a permanent lifestyle choice.

Retail works miracles

The National Retail Federation, described as the largest retail trade association in the world, represents many kinds of retailers. Collectively these companies contribute $2.6 trillion to the annual U.S. gross domestic product. Large and small retailers support an estimated one out of four jobs and impact every facet of the global economy, from job growth to consumer behavior and spending.

The retail industry, a vibrant part of the payments ecosystem, is filled with examples of mom-and-pop startups that grow into global enterprises, and of business owners who are motivated to direct a portion of their profits into the communities they serve.

DeLon Mork owns a Dairy Queen restaurant in Madison, S.D., a town with a population of 6,000 people. The store sold 38,000 Blizzards in one day to raise money for the Children's Miracle Network Hospitals. Mork noted that people who are deeply invested in their communities are what make small towns work.

Jim Adams, owner of Baltimore's Falls Road Running Store, is proud of the role that his shoe store plays in the greater economy. He recognizes that each time a customer buys a new pair of shoes at his store the money the individual spends is re-circulated through the economy. "It's just one big constant circle," Adams said, "and [retailers are] at the hub of it all."

Indeed, generous individuals working at all levels of the payments industry are at the hub of it all, as well.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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