B Corp Dharma Merchant Services Brings Transparency to Credit Card Processing

Launching a community-minded, transparency-focused business in an industry he describes as "rife with deceptive business practices, outrageous fees and disadvantageous contracts," Jeff Marcous thought his venture's appeal was clear.

"We just assumed that any company selling a green, sustainable product would want to do business with a sustainable merchant services provider," recalls Marcous, who co-founded Dharma Merchant Services with his daughter Alexia and serves as chief evolutionary officer. "That wasn't always the case."

Merchant services, which enable businesses to accept credit and debit card payments, are a commodity business, Marcous realized. "Most people don't even know the industry exists until they need it. And every company that's already accepting credit cards is getting dozens of calls from service providers like Dharma all the time; it's kind of annoying."

In addition, Marcous says, "We kind of went out on a limb calling it Dharma. I wasn't sure how the marketplace would respond; I wondered if they might think it was some kind of cult or something." But the word, which (roughly) signifies alignment with one's life purpose, appealed to both founders for its evocation of the concepts of right action, right intention and right livelihood. They intended to make business decisions based on respect and compassion, not just economic outcomes.

Community connections drive growth

"I was very confident the service was relevant and our model was relevant," Marcous says, noting that Dharma was the first (and as far we know, only) merchant services provider focused on sustainable businesses and nonprofits. "We just didn't have a million dollars to throw at a campaign to get our name out there."

The key was tapping into the sustainable business community and building a formal referral program. "Rather than us pounding the pavement, we engaged with partners who could be in a position to refer us." Those partners include Green America, New Resource Bank and green website developers.

By the end of the second year, the company was operating in the black. Dharma now serves about 3,000 enterprises--and donates over $100,000 a year to nonprofit organizations.

The past couple of years have presented a new challenge: the arrival of nontraditional entrants in Dharma's market space, such as Square and PayPal, that upended the entire merchant services business model. Dharma initially saw them as a threat, Marcous says, but found that simply operating according to the company's principles changed that perspective.

"Rather than sell to people, our intention is, let's find out what's in the best interest of the merchant. [The new players] are typically working with what we call micromerchants. Now, routinely we say, 'We think you'd be better off with Square. When you grow and start doing more volume, you will benefit from the service level we provide.' This allows us to focus on larger merchants and to be better at what we do, and people are just so thrilled when we tell them what's in their best interest."

B Corp expands the market -- and the supply chain

"When we first came across B Corp in 2009, we couldn't believe our good fortune that there was such an organization," says Marcous. The benefits of being part of a community of businesses with the same commitment to making a positive social and environmental impact have been twofold: It expanded Dharma's partner network and customer base, and it provided the company with a sustainable supply chain. In addition to New Resource Bank, Dharma's B Corp service providers include the law firm Hanson Bridgett and office supplies retailer Give Something Back.

"Having B Corps in our supply chain allows us to put our money where our mouth is," Marcous says. "If you want to be in a community with like-minded businesses, you should be reaching out to those businesses with your business. It has to make financial sense, but there are very compelling reasons to work in the B Corp community. We've found all these organizations that can provide us with goods and services, and a couple dozen B Corps are clients.

"As a good community member, I think B Corps should always be talking about B Corps," he adds. "There should be tens and hundreds of thousands of companies on board. Kudos to all those who are continuing to spread the word. I'm grateful to all the B Corps who are doing what they're doing in the world."

Sandra Stewart is a principal of San Francisco-based Thinkshift Communications, a Certified B Corp and California public benefit corporation specializing in brand building for revolutionaries. She helps sustainable businesses, social enterprises and cleantech companies tell their stories in a way that motivates action. Follow her @thinkshift and connect on LinkedIn.

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