Merchant Musings

The subject of our merchant facility is certainly something that raises eyebrows when it's first discussed with somebody representing their club. Every forward-thinking club wants to take payments online, but 3.3% for each credit card transaction? You can hear the calculations being made on the fly about how much that is per registration.

It's completely understandable as to why it would come as a bit of a shock. An online merchant charge is something that most clubs have never had to pay before.

The fact of the matter is that if you want to take credit card payments through your site you're going to be paying somebody for the privilege. It all comes down to what you get for the charges you're faced with.

Let's take a walk down the backstreets of our own merchant philosophies. We love our merchant facility, but we'll be as unbiased as we can so that you can come to your own pragmatic conclusions. Grab your shoes and walking cane, and let's go....

Why have a merchant facility at all?

This is a great place to start. If your club is quite new to the online world, you might be wondering why you'd even bother taking credit card payments at all? If you're a very small club, that's a perfectly valid question. It may not be necessary.

In today's day and age, people want convenience. For your members who aren't going to volunteer this year, they will want to deal with the club at arm's length as much as possible. They know they'll be paying money for their kids to be involved with your club, and they'd love to just get it out of the way as soon as possible. There is no more convenient way than using their credit card through your club website. It's worthwhile embracing that mentality rather than fighting it. Make it easy for them to engage with your club; don't make them find the time to come down to the clubhouse and pay; they'll resent that. The upside is that you won't ever have to chase them up for money.
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PayPal

Some clubs have already had a crack at taking payments online, normally through PayPal. Their charges are less than ours for taking payments (2.4% and 30c at the time of writing), so on the surface it appears a more attractive proposition than the Majestri merchant at 3.3%.

There's a couple of things worth pointing out. PayPal's charges are only for the privilege of taking credit card payments online. If we take a payment on your behalf, we process the payment, and the system does all the work of allocating the money back against the original debt that raised it. Add to that the fact that your members don't have to enter a single reference (we track it all the way through), and the benefits start to become very clear. We've streamlined that entire process inside the one Majestri payment experience. If your club only supported online credit card payments and BPay, your committee would have no work to do around reconciling money back against debts at all.

Even chasing up payments is easily facilitated by the Majestri system. When your members are at their MyDetails screen and making payments, we've already embedded those references in order to track them through the entire payment process. Adhoc payments via PayPal require your members to manually enter valid payment references or else your reconciliation job will be a nightmare.

Lastly, our merchant infrastructure is provided to us by Bendigo Bank. The charges that we pay in order to operate a merchant goes to this well-known Community Bank, and this money in turn gets re-distributed to grassroots organisations in the form of grants, that this bank disburses with great regularity. It's a great story, and we are proud of the relationship with them.
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BYOM

We sometimes get asked by a club whether they can bring their own merchant to the Majestri system. They declare, quite reasonably, that they can get a merchant account with their bank for less than our 3.3%. But that discounts the fact that operating a merchant comes with some overhead. Sometimes things go wrong during the online payment process. Banks report that a transaction was declined, but end up taking the money. The inverse happens too. We balance the books every week when we distribute the money to club bank accounts. If there are any discrepancies, we take on the responsibility of contacting the bank and working out where things went wrong.

If you're still convinced that you should be able to bring your own merchant, then consider the effort that goes into providing an online payment workflow. There's a lot of software that has to be of a high quality that gets built in order to achieve the experience that we are able to provide for your members. It's taken us months of development and testing to get this part of the system right. We don't want or need the complexity or overhead that comes with supporting other merchants. We'd much rather devote that time to building out the rest of the system.
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Passing on the charges

We often get asked whether it's possible to pass on the merchant charges to members who want to pay with their credit card. We agonised over this decision right back at the beginning. In the end, we decided 'No'.

Philosophically, we have built this system for progressive organisations who want to reduce the load on their volunteers. People who pay online with taheir credit card reduce the load on volunteers far more than people who don't. They don't make committee members go to the bank with cash or cheque, nor do they require chasing up for outstanding debts. Why would you knowingly create a disincentive for these people by making them pay extra? If anything, and it's a little radical we'll admit, people that pay you "old school" are creating more work for you. Sting them instead.

Technically, it complicates our system as well, and we really don't want that, and neither do you. Optionally tacking on extra debt if a payment succeeds creates a lot of extra noise in the financials. Then there's dealing with the discrepancies with the bank. Unravelling that takes time and may have implications back in your club's financials. Within a few years, it's likely that just about all forms of payment will happen online, and clubs will index their fees to automatically include whatever merchant costs are there. We really don't want to bend over backwards to convolute our system to support scenarios which will be obsolete in the very near future.

Our BPay facility also attracts the 3.3%. It is paradoxically impossible to pass on this charge unless your members are good enough to remember to add on the surcharge.
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Affording the Majestri merchant

The only question remaining is how a club is to afford the Majestri merchant. Clubs run on a shoestring as it is. It's exactly what you're thinking, wasn't it?

We've been around for a while now, and have completed full years with a number of clubs who use our merchant. We've compiled a list of the top feedback points we've heard from them.
  • The existence of the Majestri system tracks who owes the club money. The existence of the Majestri merchant greatly reduces the number of people who require constant chasing up of money. People will pay their fees if you take the roadblocks out of their way. If they can get an email, click a link, and make a payment, they will. How many fully-paid debts that would otherwise have gone unnoticed does it take until the merchant charges are covered?
  • Money comes into the club much earlier in the registration cycle. The trend for Majestri clubs is to open before Christmas in the year before. Why? Because you can. You've got that control and freedom. With the Majestri merchant, huge numbers of your members have registered and paid up in early December. Could the club do anything creative with that money in between the time it comes in and the time the associations get paid? Maybe.
  • We've got the stats to prove that, as of the time of writing, roughly 50% of your members will use the online credit card option if it's available. Indexing registration fees by 1.65% across the board will cover those costs.
  • Majestri facilitates all sorts of other options for raising funds within the club. The online shop and adhoc events are way easier to administer using Majestri. Clubs have full control over pricing there too, so it's a no-brainer way of generating extra revenues.
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When all's said and done

We consider our merchant facility to be the most valuable tool the system has. If a club's long-term sustainability is to be measured by volunteer numbers and financial stability, then our merchant meets those requirements in spades.


At the time of writing, nobody has ever asked us to disable it, but if it's still a major concern for you and your club, then just hit us at support@majestri.com.au.

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© Majestri Pty Ltd, Brisbane, Australia.