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Blackbaud Merchant Services Review: Fees, Complaints & Lawsuits

  • March 27, 2022
  • By Payments Industry Analyst, Phillip Parker
  • 9 User Reviews
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Rating

 4.5/5
Blackbaud Logo
Website
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(800) 443-9441

Most Recent Comment

  • katie: says:
    April 21, 2021
    "This payment-enabled fee of $50/mth from Blackbaud started at the beginning of March. According to the information, it would only be for cust..." Read More
See All User Comments

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Rating:
 4.5/5

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(800) 443-9441

Most Recent Comment

  • katie: says:
    April 21, 2021
    "This payment-enabled fee of $50/mth from Blackbaud started at the beginning of March. According to the information, it would only be for cust..." Read More
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Blackbaud Merchant Services Payment Processing

Blackbaud is a software and merchant account provider that specializes in solutions for nonprofit organizations. Its payment solutions allow merchants to process credit card and ACH payments. Founded in 1981, the company has grown from a simple computerized billing service into one of the largest all-in-one solutions available for charities. Blackbaud utilizes Chase Merchant Services, Wells Fargo, and First Data Canada for its backend processing. As of 2022, Blackbaud has integrated Paypal and Venmo payments into its services.

Blackbaud Location and Ownership

Blackbaud is headquartered at 65 Fairchild Street Charleston, SC. The company’s payment processing service is called Blackbaud Merchant Services and will be the primary focus of this review. Michael Gianoni is listed as the president and CEO of Blackbaud.

Blackbaud Merchant Services Review Table of Contents

  • Costs & Contract: Blackbaud offers a month-to-month merchant account contract with no early termination fee and a flat rate for all transactions.
  • Complaints & Service: Blackbaud has received more than 10 public complaints.
  • BBB Rating: Blackbaud has an “A-” rating with the Better Business Bureau and has received 19 complaints and 9 reviews in the past 3 years.
  • Sales & Marketing: Blackbaud does not appear to hire independent sales agents and has received very few complaints about its sales practices.

Should You Trust Blackbaud?

Lawsuits, Reviews & Complaints

Complaint Summary

Total Online Complaints >10
Live Customer Support Yes
Most Common Complaint N/A

Low Complaint Volume

We are able to locate just over 10 negative Blackbaud reviews, none of which accuse the company of being a ripoff or a scam. One very detailed negative review states that while Blackbaud is a very robust solution with many useful features and a strong sales staff, it is ultimately overpriced for the value it delivers and it also comes with a steep learning curve. This review is representative of most positive and negative Blackbaud reviews, with the consensus being that Blackbaud is a reliable all-in-one solution for moderately sized-to-large non-profit organizations. Very small charities or very large charities may find themselves frustrated with a lack of third-party support or expensive add-on features.

Blackbaud Lawsuits and Fines

In 2018, Blackbaud was sued by Mission Measurement Corporation in the Eastern Division of the United States District Court for the Northern Division of Illinois. The suit alleges that the company violated the Defend Trade Secrets Act of 2016 by improperly using confidential information of the plaintiff’s designed at analyzing non-profit data. This matter is still pending a resolution.

Additionally, the company was sued in April of 2018 in the United States District Court’s Central District of California. In the class-action suit, William Brown, et al v. Blackbaud, Inc, the defendants allege that components of contracts with Smart Tuition, a subsidiary of Blackbaud’s that provides student billing and payment processing platforms, contain language that unlawfully assesses late fees in violation of California’s Unfair Competition Law. This case is also pending a resolution at the time of this review.

In 2020, Blackbaud was the subject of a several-month-long ransomware attack on its network. The attack resulted in a massive data breach, affecting Blackbaud’s extensive non-profit, educational, and health care client list. These clients include The American Red Cross, The Boy Scouts of America, and Save the Children Foundation. It also included banking information, social security numbers, and other sensitive information for millions of people on the Blackbaud database. At least one class-action lawsuit has resulted from the data breach, accusing Blackbaud of not disclosing information about the attacks to its clients in a timely manner.

Blackbaud has also been fined nearly $200,000 for wage and hour violations and labor relations violations.

Blackbaud Customer Service Options

Blackbaud offers a dedicated support phone number and chat support on its website, which appears to offer service levels comparable to top-rated credit card processors for customer service.

We have located multiple Blackbaud customer service phone numbers:

(800) 443-9441 – Toll-Free Customer Support
(843) 216-6111 – Fax
(800) 468-8996 – Billing

Is the BBB Rating for Blackbaud Accurate?

Better Business Bureau Profile

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BBB Summary

Product & Service Complaints 11
Billing & Collection Complaints 7
Advertising & Sales Complaints 1
Guarantee & Warranty Complaints 0
Delivery Complaints 0

Low Complaint Volume

The Better Business Bureau currently assigns an “A-” rating to Blackbaud and does not show that the company is accredited. Blackbaud’s BBB profile has received 19 complaints in the past 36 months. 7 complaints relate to billing or collection issues, 1 had to do with advertising or sales problems, and 11 complaints concerned a problem with a product or service. Of these 19 complaints, only 5 were resolved to the satisfaction of the merchant. The remaining 14 were resolved to the dissatisfaction of the merchant or received no final response.

What Merchants Say

In addition to those 19 complaints, Blackbaud has received 9 informal reviews on its BBB profile. All 9 reviews are negative, receiving 1 out of a possible 5 in each case. The most recent complaint details difficulties canceling the company’s services:

Our brand new non-profit organization began during the height of the COVID lockdown. We committed to a 3-year contract for the Blackbaud RE NXT Starter PAE starting 9/30/2020. We quickly requested the cancellation of our contract in December of 2020 for three main reasons; 1 – Our salesperson GUARANTEED Blacbaud’s forms were completely customizable and their in-house graphics team could help us design and create cutting-edge email and web giving campaigns. That could not have been further from the truth. Their customizable forms are not. They are extremely limited in their ability and integration with much of the Adobe suite is non-existent. 2- The training and onboarding process was fraught with tech issues and delays. The “issues” we were experiencing had nothing to do with anything on our end. They often required multiple different technology staff to get involved and took weeks to be rectified. 3 – Lastly, after expressing our frustration with the aforementioned issues, we asked our salesperson to work with Blackbaud to help them understand what was promised and what was being experienced, which were very different, and to help terminate our contract. After promising he would walk with us through the process, he disappeared (and left the company). We stated we would be willing to pay the cost of our training and onboarding as we felt that was appropriate. Still, Blackbaud continues to bill us for an additional $2k and threatens to take legal action by putting the remaining balance into collections. I would STRONGLY ENCOURAGE any non-profit organization to avoid signing a contract with Blackbaud. Additionally, we would STRONGLY encourage you to consider using the Donor Perfect platform. Beyond being thousands of dollars cheaper, their platforms are SO MUCH EASIER to use, look so much better, and the “on-ramping process” was a breeze compared to Blackbaud. Feel free to reach out to our tech company for more information… https://************/

Merchants in situations like these can benefit from understanding how to cancel services without paying a fee or enacting other undesirable terms and conditions of their contract.

An “A” Rating

In light of this information, we agree with the BBB’s rating at this time, but merchants should be aware that there is cause to be skeptical of the BBB’s information.

How Expensive is Blackbaud?

Rates, Fees, and Contract Terms

This processor offers the lowest rates and best service we've seen

Cost Summary

Flat Rate 2.60% + $0.26
ACH Transaction Fee $0.75
Payment Gateway Fee None
Early Termination Fee None
PCI Compliance Fee None
Equipment Lease Terms Variable

Blackbaud Pricing

The Blackbaud Terms & Conditions reflect that the company charges a flat fee that they have branded OneRate. The rate assesses 2.60% plus $0.26 on all card transactions, regardless of the card brand or method of acceptance. ACH payments are charged a fee of $0.75 per transaction. According to the pricing schedule (found on page 3 of this whitepaper), there are no other monthly minimum fees, annual fees, setup fees, gateway fees, PCI compliance fees, batch fees, or long-term contracts.

Blackbaud’s promotional materials do not directly address whether the company charges an early termination fee, but a company representative has stated in the comment section of this review that users are free to cancel service without facing any termination penalties. This is also confirmed in the company’s contract terms and conditions (available below).

Affordable But Somewhat Restrictive

Blackbaud’s flat per-transaction rate alone is not especially competitive for the industry, as it is equivalent to most mid-qualified or non-qualified transactions. However, the fact that the company charges no other fees whatsoever for its processing service makes it an affordable option overall for most organizations. The overwhelming drawback cited by Blackbaud reviewers is the company’s rigid insistence on keeping organizations within its suite of software solutions, which limits charities’ ability to competitively shop for third-party donor relationship management, web hosting, analytics, marketing, and so on. For this reason, organizations will want to be sure that they are interested in all relevant Blackbaud software options before signing up for Blackbaud’s payment processing solution. Non-profits should also explore options offered by cheaper merchant account providers for the most competitive rates.

We also encourage merchants to check out our list of the providers of the best merchant accounts.

Does Blackbaud Use Deceptive Marketing?

Advertising & Sales Strategy

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Key Points

Employs Independent Resellers No
Advertises Deceptive Rates No
Discloses All Important Terms No

No Sales Complaints

Since Blackbaud Merchant Services is an optional service within the Blackbaud suite of products, it is primarily marketed to interested or prospective Blackbaud customers. This means that the company does not utilize independent sales agents or engage in “hiring mill” policies that typically plague the credit card processing industry. As a result, we have found no Blackbaud complaints that accuse the company’s sales staff of misrepresentation or nondisclosure.

This compares favorably to our list of best credit card processors.

No Deceptive Advertising

The Blackbaud website does not disclose the pricing of many of its products and services, but it also does not promote any deceptive rates or fees. We will therefore award it an “A” in this category for the time being. If you suspect that Blackbaud is overcharging you, we recommend seeking a third-party statement audit to find and eliminate hidden fees.

Does Blackbaud Deserve Your Business?

Review Summary & Our Thoughts

A Good Choice for Non-Profits

Blackbaud appears to be a solid merchant services provider according to all available information. The company has received positive feedback from medium-to-large nonprofits for its wide variety of features and customizable solutions, but it has rigid and fairly expensive pricing that may not appeal to smaller nonprofits or very large organizations. We will continue to monitor feedback about the company to determine whether its grade will improve or worsen, but for now, it is a reliable payment processor for established nonprofits.

5-Star Rated Blackbaud Competitors

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About The Author

Phillip Parker is a Payments Industry Analyst and creator of this blog, CardPaymentOptions.com. Phillip is passionate about researching merchant service providers and payment industry trends. He is often quoted as an expert source in national publications such as INC Magazine, The Los Angeles Times, Entrepreneur, and many others.

“I started this blog because I was disgusted by the business practices of the merchant services industry. I wanted to empower business owners by providing insight on how to avoid shady merchant account providers and costly credit card processing mistakes.” 

Phillip’s Processor Comparisons

Picking a credit card processor can be a headache, but we’ve made it easy. Phillip recommends comparing the best merchant services providers we’ve researched.

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What Others Are Saying About Blackbaud

Customer & Employee Reviews

9 Responses

  1. katie says:
    April 21, 2021 at 10:34 am

    This payment-enabled fee of $50/mth from Blackbaud started at the beginning of March. According to the information, it would only be for customers that use payment-enabled services, such as processing payments, etc. Come to find out that even if you only use the database to store and record donors, and not to process any transactions through your bank, you are still expected to pay this fee. Which by the way they say is a monthly fee of $50, but they will be billing it annually…so $600.00 EXTRA dollars in addition to the renewal amounts that do not list any additional fees after the renewal charge. But all their CEOs and Directors are making bank selling their shares…it’s ridiculous.

    Reply
  2. Erika Cross MacDonald says:
    April 6, 2021 at 8:21 am

    On March 3rd Blackbaud implented a $50 per month Payment Enablement Fee to take effect and be billed April 1st for April through December. This is an unexpected and disappointing hit to the budget.

    Reply
    1. Lynne Esselstein says:
      April 12, 2021 at 5:00 pm

      We are equally upset about this. The additional charge $450 annual charge was imposed outside of our signed contract. A Blackbaud rep told us today: “Your account executive or sales person would likely have had no idea of this charge, this was only
      recently introduced by the highest levels of Blackbaud, I do not think they would be able to help.” We do not use any merchant services with our subscription as we have a separate setup with PayPal which is adequate (and reasonable!) for a nonprofit our size. Whoever these people are at “the highest levels”, they just lost our business.

      Reply
  3. Mark J Theodoroff says:
    March 12, 2021 at 10:44 am

    Blackbaud offers an integrated payment program, but we are currently working with a merchant that is using Blackbaud and their current program is a “bill back” payment program. Most of the time these bill back programs don’t not work out in favor of the merchant. Bill back programs are confusing and allow processors to “hide” fees and charges. I’d like to hear your feedback on bill back and why a processor would ever use this kind of program.
    The merchant we are working with does about $3-4M a year in revenue, so they are a decent size merchant.
    Thanks for your comments on this Phillip!

    Reply
  4. Kendra DeWitt says:
    December 5, 2014 at 4:51 pm

    Phillip:

    Thank you very much for your review of Blackbaud Merchant Services. As the Payment Business product marketing manager, I wanted to reach out and let you know that we don’t charge an early termination fee. Clients can come and go as they wish without penalty.

    Please don’t hesitate to let me know if you have any questions or if there’s any other information that you need.

    Best regards,

    Kendra DeWitt
    Product Marketing Manager, Payment Business
    Blackbaud, Inc.
    [email protected] | blackbaud.com

    Reply
    1. Joe Smith says:
      April 18, 2021 at 9:36 pm

      Thanks for taking questions. Why is Blackbaud introducing this fee outside of contracted terms after all of your customers had to win back the trust of donors when you had the largest data breach in the history of the nonprofit world? Shame. On. You.

      Reply
      1. Les Fujimoto says:
        April 21, 2021 at 4:49 pm

        Joe,
        We complained to Blackbaud and they told us it was for the betterment of all Blackbaud customers, those who use and those who do not use their payment system.
        What legitimate business today gets away with and has the audacity to unilaterally charge all their customers, especially nonprofit customers for an additional program that we never agreed to , wanted, or signed up for, right in the middle of our contract term!
        Class action?????

        Reply
        1. Unhappy Blackbaud user says:
          November 22, 2021 at 2:58 pm
          Unhappy Blackbaud "customer"

          WE certainly agree with all of these comments regarding this payment service fee
          which we did not sign up for and never intend to use. It is an awful way to treat a customer base.

          Reply
          1. Can I switch database providers? says:
            December 27, 2021 at 11:54 am

            The “Payment Enablement Fee” is infuriating! Every time I see that fee on an invoice, I’m angry all over again. I imagine if Blackbaud weren’t still embroiled in the data breach class action suit, that one(s) of us would have launched such a suit about this fee. If it weren’t so complicated and time-consuming to switch databases, we would have done so when this fee came out of the blue, non-negotiable, for a service to which we don’t and won’t subscribe (and which we pay another company to provide to us).

            When the fee first came up, along with being disgusted, I imagined some cost center within Blackbaud was not making its numbers, thus this fee to cover.

            You know how a disgruntled customer tells 7 people who might each tell 7 more…?

            When people ask what database software we use, I suggest they steer clear of Blackbaud.

            Reply

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