Giving Some Credit to Philanthropy

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Like other businesses, Cake and Art gets charged a few cents every time a customer pays with a credit or debit card. But at the West Hollywood bakery, a few of those pennies wind up in the coffers of AIDS Project Los Angeles.

That’s because Cake and Art is a client of payment-processing company Pride Card Services, which donates a portion of its processing fees to APLA and other non-profits.

It’s philanthropy, but it’s also a way for Pride to set itself apart in the world of merchant services and to bring in clients it wouldn’t otherwise get, said Cliff Teston, chief executive of both Pride and its parent, Signature Card Services in West Hollywood.

“It differentiates us and in a really good way,” Teston said.

When a merchant signs up, Pride donates $250 to a charity of the merchant’s choice and then donates 20 percent of the profits from the merchant’s account each month. Since starting up about 18 months ago, Pride has donated $24,000, mostly to APLA. It’s an uncommon practice in the world of credit card servicing – the Business Journal found only a few other examples.

Kirk Allen, Pride’s chief operating officer, said the company can afford to do it – and turn a profit – because Pride accounts are sold by an in-house staff, which turns out to be less expensive than the typical method of selling through independent agents. Signature sells mostly through independent agents, who get a cut of each account’s fees – sometimes 50 percent or more – in perpetuity.

Most Pride merchants are in the L.A. and Palm Springs areas, but Teston wants to expand to more cities. To do that, he hopes to start convincing non-profits to give him access to their donor lists. That would give Pride a chance to market its services to likely clients: business owners who already have philanthropic tendencies.

However, non-profits typically don’t share those lists. Teston said he thinks they’ll get on board when they see they’ll be making money.

“It’s a trust process,” he said. “Organizations will hear about us and how we can benefit them. Then maybe they’ll push us in their newsletters.”

– James Rufus Koren