The Gesture Payments Journey – Narrative Summary
How adding payments enabled a more engaged audience for charity fundraising events
Technology and charity fundraising are two industries not often mentioned in the same circles. But Gesture’s laser-focus on helping charities host better events lead to this one exception.
Gesture simplifies charity fundraising events. A traditionally clunky and time-consuming ordeal, charity events used to be pretty old-school. Forms of payments for donations were usually limited to a check – and eventually card-reading machines. But rounding up each of these at the end of the event created a real bottleneck for donors.
Furthermore, ensuring people were incentivized to participate (without the hassle of waiting around) was easier said than done. But, with their software, donors could now efficiently use their platform for mobile bidding, direct donation, silent and live auctions, ticket sales and checkout.
Creating a seamless experience was Jim Alverez’s vision when he founded Gesture in 2011. So, although payments is not their business, it is a key component of their business strategy.
Why explore payments?
Soon after Gesture developed the event technology, collecting money became a pain point. They needed to accept credit and debit cards. Sounds easy enough, right? So, as many do, Gesture started with Square, allowing them to swipe cards as attendees left the event.
What happened over the next several years was a trial-by-fire experience that earned Jim a degree in payments. We’ll spare you the gory details, but essentially…
- They learned that they would need more meaningful reporting, which Square was not able to provide to them.
- So they moved onto another processor that offered more information in their reports. However, Gesture’s needs soon changed again. They needed to be able to swipe cards in a mobile environment – something this new processor wasn’t able to provide.
- So they switched again. Then their customers wanted to increase efficiency by swiping cards at the beginning of the event and processing the transaction at the end (this could mean four hours later).
- As Gesture’s knowledge of payments was starting to grow, they realized that they should be getting card present rates, but hadn’t been. So…spoiler alert!! Onto another processor.
In seven years, Gesture tried four different payment processors.
Their specific payment needs began to self-identify through their customers’ experience. The process needed to fit into the event (not control the process) and make paying quick and efficient. The last thing donors want is a long payment line at the end of a long event.
Having learned more about how best to assist their customers, and what sort of payment strategy would best allow them to do so, three goals took shape:
- Continue to provide an efficient process (their original goal)
- Help raise increasing amounts of money for charities
- And of course – like all businesses – they wanted to get the best card processing rates
The learn-as-you-go journey that was…frustrating (to say the least)
Jim knew a great customer experience was the most important outcome. He knew his technology and customers well, and over time (and unexpectedly) was also learning more about the payments industry.
Gesture was processing a significant amount of financial volume through their software, and they strongly felt the need to find a trusted partner.
When Jim began his journey with little knowledge about payments, he found the process of gathering (trustworthy!) information to be nearly impossible. He felt like he was chasing a moving target as partners were changing the rules after using their services. The rates and fees seemed to be unnecessarily complex (dare we say- subjective?), further deteriorating what little trust existed in the first place.
Dealing with payments companies was a “black box” (talk about major trust- you provide transactions, but don’t quite know how fees and process will turn out). Gesture couldn’t understand their monthly statements. And they couldn’t believe there were so many “creative” charges! The surprises and confusion were really starting to distract them from their original mission: deliver the best possible customer experience. At no time had they ever intended to spend so much time on this portion of their business.
Sweet relief (queue image of meadows of wild flowers and chirping birds)
Gesture has now been processing payments through CardConnect for over a year. With them, they found the ability to manage the customer experience, as well as several other relevant needs, such as: mobile payments, card-present rates, and reporting that provides detailed and useful information.
So what important tips can they share with you? (where to begin…)
- Try to find a trusted partner: payments is a complex and confusing industry for those unfamiliar with it. You need someone who is going to give it to you straight and not require you to dissect what they really mean.
- Talk to as many people as you can: perspective is key – Jim felt as though everyone was just trying to sell him “stuff”. Talk with someone who’s done this before – who doesn’t have anything to sell you. They’re a great filter for learning which vendors actually want to help you vs. sell you something.
- Try to poke holes in a prospective processor’s story:
- Everyone wants your business and will attempt to twist their solution to meet your needs (remember Jim’s card-present rate issue?).
- Find the technology gaps that hinder a smooth customer experience (Gesture needed to build onboarding software).
Understand the rates:
Did you know reward cards have a different processing rate? These are the types of details that weren’t always abundantly clear to Jim when he was talking with new processors.
Gesture’s focus remained on the customer experience. They wanted to handle all support, including event software and payment processing. They soon realized that payment processing would have to be a part of their business strategy.
Jim reiterates: prepare yourself! Get your bearings in several areas prior to making any decisions about payments partners or technologies.
- Understand how credit card companies make money – this will help you negotiate better rates (and not get, umm, ripped off)
- Understand the components that affect per-transaction costs
- Interchange – “Yes, I have a question, what the…” Interchange has to do with the rates banks charge you for processing your transaction and assuming the risk for doing so. This is a complex, variable, proprietary calculation – talk to as many different people as possible about this.
- Level 2 processing – “Um yes, another question…” Level 2 processing allows you to “level up” to a better rate, because you’ve increased your volume of transactions.
Want a negotiating token?
Of course, you do! Wouldn’t it be great to know how much the processor is making on your business so you know what leverage you have? In Gesture’s case, they were processing a lot of money through their software- no doubt a lucrative partner for their processor. Given any trouble with their agreement, Gesture has negotiating power because they’re generating so much revenue for their processor.
Lastly, know who you are dealing with. Are they an Independent Sales Organization (ISO), a Payment Facilitator or part of an acquirer organization? Each of these types of payment companies will affect your level of responsibility, the money that’s exchanged, and your ability to control the customer experience. They might all tell you they are the right fit for your needs, but chances are only one of them truly is.