Mitt doesn't have it. Neither does Rudy, or McCain. Heck, many of you may never have gotten hip to using PayPal either--even though it's an option often used to support blogs (including this one), and oh, yeah--paying for items on eBay!
The Fred File carried this note announcing it as an option to contribute: "Over the last two months, many Friends of Fred have written to us asking for options to contribute to the committee that do not require you to enter your credit card information on our site..." Fred's web team has integrated the button into the donation form, so instead of using the radial button for Discover, MC, or Visa--you select "PayPal."
To date, I'm not aware of PayPal being used in very many GOP Congressional or Presidential races. In fact, my experience has been that it's used more often in "down the ticket" races. Why? While other services might build fancy forms, the objective of sending/receiving cash is more easily accomplished via PayPal. Anyone who's used the service knows that it's simply a matter of signing in, and clicking send. Sure, there's a small fee (about 10% per transaction), and initial account setup, but its ease of use for both sender and receiver trumps both (especially for small sums).
As David All and others have been noting all summer, the GOP is lagging behind in online fundraising. Some, like Patrick Ruffini, have suggested that it's both a matter of buy-in, and of having the right pitch (i.e. read his free advice to McCain).
But has anyone considered that it might be as simple as having the right payment option? Eliminate the online hurdles for people to jump over--and maybe, just maybe--the floodgates will open.
For what it's worth I just sent Fred $25 via PayPal, and will probably be inclined to do it again. Why? Because I use the service all the time and have come to rely on it for moving small amounts over the net. Five bucks here, twenty bucks there, it begins to add up. If Fred has any luck, he will reap the dividends of being one of the first GOP Presidential contenders to accept contributions by PayPal. Of course, he'd have to get in the race first ;)
P.S. The Founder of PayPal, Peter Thiel (now a venture capitalist) originally saw PayPal as having great implications for politics.
Comments
FEC Compliance
The reason most federal races don't accept PayPal is because of the complications caused when it comes to FEC reporting, specifically the Employer/Occupation fields and the "I certify I am..." checkbox. Imwithfred.com has the best implementation I've seen so far for a seamless user experience, but then the campaign will need to do extra work later on to reconcile the PayPal contribution to the donor's FEC compliance information.
It's not a very difficult process, but most campaigns have judged that it's more work than it's worth, and I would tend to agree.
compliance
I think FDT's decision to use PayPal signals both an intent to innovate, and to take risks. As far as compliance goes, Fred's people seem to have judged the benefits to outweigh the costs.
Blogging at RespectfullyRepublican.com
GAP
I read the entire FEC statue regarding Federal races. Boring.
But there's a gap. I don't think it's entirely ethical to take advantage of it, but as a Campaign Strategist - I would! Most***** of your contributions must be filled with the Employer Information. You must make an attempt to collect that information.
The web is still untamed. Most**** say their best attempt is to put a text entry so that that information can be filled, however if it were up to me: I wouldn't require that text field to be completed to complete the transaction.
Also on $50.00 - you can take it anonymously :)
FEC pssssshhh
Ali A. Akbar
Blogger
econservative.org, Founder
Practices are well-established
I wouldn't be so lackadaisical about FEC compliance if I were you, especially if you're going to be advising campaigns.
The fact of the matter is that it's very clear what needs to be done on a contribution page, and you're going to get burned if you don't do it. You can't accept a contribution until you collect Employer/Occupation and have verified that the contributor meets the compliance requirements (via the checkbox). Period.
The web may be relatively untamed, but the FEC isn't.
Ah, but...
If you're goal is to long tail, then you don't want them to stop at $50 and hopefully they'll give more and more over time which might push them into reporting level.
Oops
n/t
That small fee...
...adds up pretty quick. It's not just a percent through PayPal but a percent on top of a .30USD per transaction charge. So $5 quickly becomes $4.20 (more or les). How do you report that? As a $5 transaction with an .80USD expenditure to PayPal or only as a $4.20 donation?
And, sure, you could lose 10 cents on every dollar sent to your campaign by using PayPal or only 2-5 cents by simply creating your own backend merchant services system and using Verisign or some other secure set up.
I think you'll start to see more and more people turn to options like Google Checkout or Amazon's new system as they open up to services like this. It may also be a matter of educating the public on the options available. PayPal, while secure, takes a lot more money per transaction than an equally secure services a campaign could just purchase for its website.
Google
Isn't free GoogleCheckout set to expire soon?
Ali A. Akbar
Blogger
econservative.org, Founder
I believe so...
but their rates are supposed to be lower than PayPal's once they go into effect. The problem is, GoogleCheckout doesn't let you enter varying amounts for donation purposes yet. You have to have set amounts to "sell".
fee
Jason, I don't disagree that the fee "adds up." You can look at this at least two ways. First, either the contributor understands the fee, and is willing to pay it for using the service. Or second, the campaign has judged offering the service more important than a small percentage of loss. I should also note that many credit card processing companies charge transaction fees. These too add up. But still, my main point here is this: Fred is responding to what "the people" want. That in itself is remarkable.
Blogging at RespectfullyRepublican.com
Discount Rate
That's what it's called.
When you go directly with credit card, the discount rate (their cut) can vary anywhere between 2% (mine) and 6-8% (dating sites) on top of a similar 0.25 - 1.00 per transaction cost.
Overall, the costs aren't all that different, but I would suspect that many of the sub-30's will have Paypal... which is probably the core of their motivation.
True...
But like the next comment said, there can be lower rates. PayPal charges a bit on top of the basic Visa/MC rates to make money. That bit really could add up.
It certanly is nice that the Thompson camp is responding to what the people want, but that doesn't necessarily make the PayPal option something everyone should dive into right away. Each campaign needs to measure the true value. Ron Paul, who has tapped into the long tail very successfully, doesn't use PayPal.
Perhaps this is also a matter of target audience. Are those who subscribe to the "long tail" strategy more likely to trust a non-PayPal service than those who are regular "old time" donators trying to use new means to get their money to candidates? Does PayPal appeal to and instill a sense of security in regular folks as opposed to the net activists who utilize something like ActBlue on the left or just donate straight through campaign sites?
Re: That Small Fee
The fee charged on the PayPal processing is 1.9% to 2.9% depending on the volume. That's considerably lower than what most vendors charge, and is actually on par with what ACTBlue deducts from contributions to Democrats for their processing fees. It's certianly lower than most online contribution vendors are charging campaigns.
You can integrate this fairly easily through PayPal's API. When the donor makes a transaction, the name/address data is stored first on your site, and passed via the API to PayPal. When they finish the transaction on the PayPal site, it passes a transaction receipt number to you. That way you will know that the transaction verified and it reconciles the majority of the transactions without your involvement.
In many ways, it is as easy to set up PayPal as it is to use your own bank for credit card processing.
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