credit card processing
These days, you need to be prepared to take donations in plastic, rather than paper, form. (Photo credit: pixabay.com)

How to Run for Office: Credit Card Processing

Credit Card Processing 101

Reading Time: 5 minutes

In the modern world where fewer and fewer people carry cash and heavily rely on electronic payments to pay for goods, credit cards are more prevalent than ever. For some campaigns, having the ability to process electronic payments is crucial — for others, it’s less than necessary. Here are some facts to help you decide whether your campaign needs to be able to process electronic donations or if it’s not necessary for the success of your campaign.

Online credit card processing tools can be extremely helpful in gathering the support of small donors because it provides an easy, convenient way to contribute to the campaign.

Things to Know Before You Get Started:
  • You’ll need a campaign bank account — always keep your personal funds separate from your campaign funds to keep your spending organized and avoid FEC investigation
  • You’ll need to choose a credit card processor, a third party service through which your donors can contribute to your campaign — see the chart below for more information
  • It can take some time for your credit card processor account to be approved — typically 3–7 business days
  • Be aware of the local election laws regarding fundraising within your state — laws vary from state to state regarding limits on when you can start fundraising, how much you can raise, donor disclosure laws, etc.

Don’t think you need a credit card processor? You might be right. In small local elections, sometimes campaigns don’t need the ability to process electronic contributions. Occasionally the base voters might not use social media, email, or computer technology very often, meaning they’re less likely to contribute online. In this case, your campaign might be better off with direct mail and in-person donation solicitations during events. Sometimes cold hard cash and checks work best.

However, if your campaign has a larger donor base and needs to reach more people — especially via social media and email — odds are you’re going to need a credit card processor. Here are some options below, and why they may or may not be good fit for you.

Credit Card Processor

ActBlue

A popular electronic payment platform used exclusively by Democratic candidates. Typically used for partisan races.

Fees: 3.95% charge on each donation received. No set up fees.

Pros: Donors might already have an existing account with ActBlue and are more likely to contribute to your campaign since their information is already in the system.

The online contribution pages are easily customizable and you can dictate your “levels of giving” in the page to encourage donors to contribute a specific amount of money.

This service offers a recurring contribution option for donors so they can automatically donate to your campaign on a regular basis.

Cons: The fee per transaction is higher than non-politically affiliated processors. This is typical with most political fundraising services.

There have been complaints from past contributors about automatically recurring donations when they did not sign up for this option.

CrowdPac

A nonpartisan platform used by candidates to fundraise. This service focuses on the support of small donors rather than “Big Money” in politics.

Fees: 3.75% + $0.30 per transaction — the donor pays the fee, not the campaign.

Conditional campaigns (before the candidate has officially entered the race) require and 8% + $0.30 per pledge fee. 4.25% of this fee goes to CrowdPac. These pledges will only be charged to the donor once the candidate has officially entered the race.

Pros: If CrowdPac has enough data on the candidate’s voting history and issues, it will assign a score to the candidate (10+L being the most liberal, 10+C being the most conservative). Potential donors will see this rating and can easily decide if they want to donate to your campaign.

The platform is already compliant with campaign regulations and disclosure requirements.

Cons: The burden of the processing fee is placed on the donor rather than taken out of the contribution to the campaign. This could be considered a ‘pro’ since the campaign gets the full amount of money the donor intended, but this means the donor has to compensate for the extra charge and may ultimately contribute less.

Action Network

A platform used exclusively by progressive candidates “from the grassroots up” to organize the campaign and fundraise.

Fees: 3.9% + $0.30 fee per transaction. The candidate has the option to choose between two credit card processors, WePay and Stripe. The candidate will have to make an account with the service of his or her choosing and link it to the campaign’s Action Network account.

Pros: This campaign tool is multifaceted; in addition to processing credit card payments, it allows you to organize email lists and send out mass emails, create petitions, organize letter campaigns, and many other campaign functions that can help lead toward success.

Cons: This platform is only available for progressive candidates — if you do not identify as a progressive, this may not be the right fundraising tool for you.

Raise the Money

A nonpartisan service that specializes in campaign fundraising.

Fees: 4.9% + $0.25 per contribution.

Pros: The Quick Contribute option allows donors to save their data on the site, making it easier to contribute again in the future.

There is an opt-in option for donors to make recurring contributions to your campaign.

Cons: This service charges the highest fee per transaction which can easily eat up campaign funds.

While these services have higher fees per transaction than nonpolitically affiliated services, they should not be immediately discounted since most of them offer a recurring contribution service. However, a few nonpolitically affiliated services are laid out below.

PayPal

One of the most popular electronic payment hosts.

Fees: 2.9% + $0.30 per transaction. No monthly user fee.

Pros: Millions of people across the country already have PayPal accounts — having to enter payment information to make a contribution can be a deterrent in some donors, and this eliminates that obstacle. However, it’s not necessary for donors to have a PayPal account to make a donation.

Cons: Some accounts have complained of PayPal arbitrarily freezing their accounts and threatening to retain their funds unless the account owner goes through an extensive identity-authentication process. This can be difficult to work with should this happen during the heat of an election.

Square

A popular online transaction site for small businesses.

Fees: 2.75% per card swipe/tap.

3.5% + $0.15 per keyed-in transaction.

No monthly user fee.

Pros: Square card readers plug into any smartphone or tablet for easy use during a fundraising event.

Vendors are able to swipe credit cards without an internet connection — this can be handy for events without wifi readily available.

Cons: The higher rate for the keyed-in transaction means less money coming in from donors contributing from home than those donating in-person.

Stripe

A nonpartisan company that was frequently used in the 2016 presidential election.

Fees: 2.9% + $0.30 per transaction. No monthly user fee.

Pros: The candidate is able to securely add a donation form directly into the campaign website, meaning that donors will not have to go to another website to make a donation.

Stripe has a highly customizable forms that allow the candidate to have Stripe seamlessly blend with the campaign’s theme.

Cons: Stripe only offers customer support through email with no phone number option.

Stripe is usually used by larger organizations rather than small businesses due to the sheer amount of services available. Critics have recommended having a strong web developer on the team in order to use the site more efficiently.

This is by no means a complete list of all the different credit card processing systems available for use. If you feel that none of these companies are the right fit for you, there are plenty more to research. Just be sure to check that their policies allow you to use their services for political fundraising.

Good luck and happy fundraising!