Dharma Merchant Review: Cut the Fees and Work with The Best Ethical Company (January 2017)

With over 191.1 million digital shoppers in the United States alone, the world is a beautiful place to start making money online. With all of these digital shoppers comes transactions that go through your online store. How are these transactions processed? Does it all just happen magically, or is there a processing system setup when you go for an ecommerce store option like Shopify?

In general, you’ll have to setup a merchant account through one of the many providers like Dharma Merchant Services. Dharma is a standout option, since it provides low fees, lots of transparency and an excellent customer support team in case you get in a bind. Don’t forget the fact that it’s a company with a purpose-filled view on business. In fact, Dharma is a word used in Hinduism, which ties into natural law, ethics and the pursuit of one’s true calling.

Since merchant account providers are often tricky to decipher between, I figured it’s worthwhile looking into some of the better solutions. With that, keep reading to learn about whether or not Dharma Merchant Services is a suitable option for your online business.

But to make things easier for everyone, Dharma is only for companies:

  • Based in the US
  • Processing over $10,000 per month
  • Not processing in a “high-risk” category

Dharma Merchant Services Fees and Pricing Structure

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Since so many merchant account providers use tiered pricing, it’s a refreshing moment when you stumble upon one that offers an interchange-plus pricing model. This model allows for more transparency, as opposed to the tiered model, which bundles your fees into vague tiers, increasing your costs over time.

The interesting part is that most providers will initially try to set you up on a tiered plan, and only change that when you ask. Dharma Merchant Services takes a new approach, acting both moral and friendly to the merchants out there. In short, they don’t ever try to deceive you by pushing you into a tiered pricing structure.

So, what are the rates and fees you can expect from Dharma Merchant Services?

Countries Served

  • United States

Rates for an Ecommerce Store

  • A monthly fee of $15
  • Transactional fees of 0.35% + $0.15 above the actual cost
  • You don’t have to worry much about the AVS fee, since it’s included in the transaction fee
  • If you request a gateway service, transactional fees may apply

Rates for a Storefront

  • A monthly fee of $15
  • Transactional fees of 0.25% + $0.10 above the actual cost
  • An AVS fee of $0.05 for the keyed-in transactions

Payment Gateway Fees

If you plan on going for a payment gateway through Dharma Merchant Services, you have to pay for setup fees and monthly costs.

  • The setup fee is $49
  • The transaction fee is $0.05
  • The monthly fee is $20

Keep in mind that if you opt for Authorize.net, they send you a free mobile card reader.

Additional Fees to Expect

Although some of the fees listed below may tick you off a bit, it’s worth noting that the fees they ask for are generally needed from just about any merchant account provider. In fact, Dharma cuts out as many of the incidental fees as they can.

What are the fees you can expect?

  • A $0.10 batch fee, which is calculated per day, based on the number of transactional batches you receive.
  • A closure fee of $25, which is not to be confused with an early termination fee. This just helps with record keeping in case you plan on opening up a new account.
  • If a customer fights a transaction you are charged a $5 retrieval fee.
  • If a chargeback happens, you are charged $20.

What fees are not forced upon you?

Try-Shopify
  • Monthly minimum fees
  • Application costs
  • PCI Compliance fees
  • Annual costs
  • Early termination fees

Contracts and Special Rates

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It’s a wise choice to go with Dharma Merchant Service when running a non-profit. Why’s that? Because the company offers the following special rates for ecommerce non-profits:

  • Only $15 per month
  • Transactional fees of 0.30 + $0.15
  • If you go with Authorize.net you only pay $75 for the setup

In terms of contracts, Dharma Merchant Services stays away from the early termination game, so you essentially are working off of a monthly contract. This means that you can cancel your account whenever you want.

The $25 account closure fee often raises eyebrows, but it’s a fair charge, considering the company is keeping your files around for an extra six months. This is handy for you if you reactivate your account or if you need that information.

Services You Receive from Dharma Merchant Services

What does Dharma Merchant Services offer that makes them so great? Since their margins are so slim you may assume that you get stiffed with some of the products and services. However, this isn’t the case. Here’s a list of what you receive after payment.

  • Your own merchant accounts – First Data is one of the main processors that Dharma uses, but you can expect your transactions to go through various other processors as well. It’s smart to assume that going with one of these processors alone will hike up your prices, considering Dharma has already negotiated ideal pricing for you.
  • A payment gateway – Although you have the option to choose any payment gateway company, the Authorize.net gateway is the provider of choice, since Dharma uses them the most. The rates are friendly, and non-profits even get a cut in fees.
  • Quick and low volume mobile processing – Lots of ecommerce stores also make sales in person, so if your volume is low through mobile processing you don’t get screwed over with high fees. The Flint mobile processing system lets you scan cards with your phone instead of using one of those swipers.
  • Fundraising options – When collecting donations and contributions, Dharma Merchant Services is the way to go. The company specializes in non-profits, so they plan and implement donation or crowdfunding pages and offer some solid rates.
  • Point of sale systems – From ShopKeep to Clover Station, your options are endless if you run a brick and mortar shop as well.
  • A moral business partner – The Dharma company is one of the most ethical options in terms of merchant account providers. They offer wonderful rates, nice people to speak with and a transparent system for feeling good about your partnership.

Is Dharma Merchant Services Transparent?

Yes, yes and yes. Out of all the merchant account providers I’ve reviewed, Dharma is the only one that seems like they share every bit of information on you.

Dharma Merchant Services Customer Service

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Initially it sounds like a bad thing that Dharma only provides support from 8:00am to 5:00pm PST, but the entire support team is in-house, and they know what they’re doing. It’s so much better than speaking to an outsourced rep at midnight. They even send you to someone who can help if your timezone doesn’t fall during these hours.

Feel free to go to their support page, or check out the wonderful FAQ page. If you can’t find what you need, give the company a call or send in an email. Dharma also provides live chat support and a few social media pages for quick responses.

The Last Word

Dharma Merchant Services is one of the most ethical, open-minded companies you can work with. The rates are great, customer service helps quite a bit and they even recommend you to Flint (an awesome mobile and small business processing company) if you don’t have the sales volume to work through Dharma (about $5k a month).

Dharma Merchant Services Rating: 5 - Review by

Catalin Zorzini

I'm a web design blogger and started this project after spending a few weeks struggling to find out which is the best ecommerce platform for myself. Check out my current top 10 ecommerce site builders.

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