Resources for county party fundraising.
Merchant Accounts and Gateways
To accept credit card payments, an organization has to have a "merchant account". This is the kind of account that any retailer has that enables them to take credit card payments. Merchant accounts are issued by banks and by many independent companies as well. The merchant account allows funds to be transferred by the credit card processors from the credit card system to your bank account. That is, you need the merchant account to receive funds from the credit card system. If you take cards on-line, you need a special kind of merchant account called a "card not present" or "mail order phone order" account. These are handled differently than accounts that have a swiping terminal, because the risks are different.
In addition to the merchant account, you will generally need a "gateway processor". The gateway processor actually receives a transaction from you, gets authorization from the customer's bank, and then "settles" the transaction, charging the customers credit card account and crediting your merchant account. In some cases, banks will provide the merchant account and also handle the gateway processing, but usually third parties are involved. There are just a few large gateway processors. Examples include authorize.net, firstdata, and bankcard services.
Most major shopping cart packages can interface to any of the major gateways.
Of course, everyone gets their cut of the transaction, so there are fees involved.
A discount -- a percentage of each transaction that is retained by the processor. This ranges from less than 3% to more than 8%, depending on a variety of things, including other fees, volume, and type of card (Amex costs a lot more than Visa, which is why many merchants won't take it.) Usually, you get credited for the full amount of each transaction, and the discount fees are deducted directly from your bank account at the end of the month.
So having a regular merchant account can be costly. But it does offer some advantages.
There's a tight audit trail. Funds from the customer's card are immediately reported to you and deposited in your account the next day.
The customer sees your name on his credit card statement, not some third party that he's never heard of.
You can take credit cards at events or over the phone, and enter them yourself using the gateway's "virtual terminal".
You can issue credits if necessary
You can set up automatic periodic transactions
You can take any cards you want, if you're prepared to pay the discount. You can even set it up to take over-the-phone "checks".
A Word About Security
When you run an on-line credit card transaction, you never see or have access to the customer's credit card number. You will only see the last 4 digits. The transaction data goes from the web page on the donor's computer via an encrypted datapath to the credit card gateway processor. The DPO secure web site will be an intermediary if you're using that, but everything is always encrypted and nothing is stored along the way. It is not even stored at the gateway processor. The customer's card number is not stored anywhere except at the issuing bank.
If you elect to keep track of donor's credit card information so you can re-run cards (for monthly donors, for example) then you MUST keep that information secure. It must be encrypted on any computer that it is saved on, especially if it's a Windows computer, as they are easily invaded by worms and other mal-ware. The best thing to do is just not have the data at all. The second best is to keep it on a removable disk, so it is not connected to the computer at all except when needed.
Avoiding A Merchant Account
There are several ways to take credit cards that do NOT require you to get a merchant account.
One is PayPal (http://www.paypal.com ) Pro: Easy to set up; no setup or minimum; moderate costs. Paypal is bank, so has some powers and regulatory constraints that go with that . (That's good.) Con: Bad reputation; tends to spam people; can't control extra data collection like employer and occupation or event, you have to manually move the money from their account to yours. Really only good for collecting the total amount; you almost need a front end system to capture and manage other information.
Another is clickandpledge.com. (http://www.clickandpledge.com) Pro: easy to set up; no setup or minimum; cost is a % of transactions, so predicable. Designed for political and non-profits, lets you set different "products" and prices; handles recurring donations; also handles merchandise orders. Con: not a direct deposit. Clickandpledge is a much better solution than Paypal.
The latest and best choice is ActBlue, a PAC that has been set up for the sole purpose of collecting on-line contribution for Democratic candidates and committees. Pro: Strictly Dems; easy setup; no merchant account reqd. Cons: not direct deposit. They have already created pages for every Oregon county. See ActBlue page.
You may be familiar with them as a collector of candidate contributions, but they are now equipped to handle compliance reporting in Oregon and have made their services available to any county party (or Democratic candidate) that wants to use them.
In fact, they have already set up donation pages for every county party in Oregon:
http://resources.dpo.org/y/kysz (this is a "tinyurl" to a long actblue url.)
I have attached a PDF brochure that describes what they offer.
In essence, they are a PAC that aggregates contributions for political committees.
Donors make contributions to ActBlue that are designated for particular committees.
ActBlue aggregates them, deducts a minor processing fee, and sends a check out to the committee each week. As a committee, you do not need to have your own merchant account.
Since Act Blue doesn't cost a thing until it is used (and then only a
small processing fee), it makes sense to take advantage of it. After
all, millions of people around the country are visiting Act Blue and
making donations.
They are working on (or may have already) event signup tools as well. If you contact them you can customize your donation page. They can process recurring contributions as well.
There is no more cost-effective way for county parties to use on-line technology to collect contributions.
The DPO operates a secure web server that can be used by any county to
accept credit card transactions on line. There is no charge to the
county for use of the secure server. However the county needs to have a
merchant credit card account and a authorize.net gateway account.
We have arranged with a credit card company to let county parties sign up for merchant accounts at a favorable rate that includes a merchant account and an account with authorize.net. This
entails a monthly charge of $17.50 plus $0.22 per transaction, and a
discount rate of 2.14%. See account details below.
The
on line contribution page can be very quickly modified to handle a variety of situations, such as various ticket types at some rate, dollar donations to multiple funds, and non-dollar transactions like meal choices and t-shirt sizes.
The authorize.net account provides a "virtual terminal" that lets you manually process credit cards as well. It also can automate recurring transactions, and notify you of pending expiration dates. And it can process eChecks as well as credit cards. Nearly all "store" software systems provide an interface to authorize.net so it is easy to use for other things as well.
Getting an account
The account is set up through e-onlinedata.com. Have this information ready:
Sign up at this site: https://www.e-onlinedata.com/democrats
After you have received your accounts (takes about 10 days), contact DPO to set up the on-line contribution form.