News Column

Candidates pay a pretty penny to PayPal for political donations

August 23, 2014

By Christine Stapleton, The Palm Beach Post, Fla.



Aug. 23--In the multi-million dollar world of campaign finance, there is a new payee raking in campaign cash: PayPal.

Since 2002, when candidates and committees in Florida began using PayPal as a payment option and gateway to manage online donations, the company has seen explosive growth -- and revenue -- in candidates and political action committees using PayPal's services. Among the biggest PayPal users in the current election cycle:

--Charlie Crist, Democratic gubernatorial candidate, has already spent $32,929 on PayPal services. Donors cannot use PayPal to make donations on Crist's site. However, the campaign uses PayPal's PayFlow payment gateway to process online donations made with other major credit cards.

--United for Care/People United for Medical Marijuana, the political action committee behind the ballot initiative, allows donors to use their PayPal accounts and other major credit cards to make contributions on the committee's website. So far, the committee has paid PayPal $10,688 for those services.

--Palm Beach County State Attorney Dave Aronberg spent $1,773 on PayPal services during his re-election to the state Senate in 2008 and his run for state attorney general in 2010.

"It's the most efficient and accessible payment gateway," said Kevin Cate, a Crist campaign spokesman. Gov. Rick Scott's campaign has not made any payments to PayPal. Scott campaign spokesman Greg Blair said the campaign has "nothing to offer" in response to a request for an interview.

Brian Franklin, president of Impact Politics and a senior consultant for United for Care/People United for Medical Marijuana, said there are about 10 software solutions commonly used to manage a campaign's finances.

"It's really just a matter of choice," said Franklin, who also sits on the board of the American Association of Political Consultants. Franklin said PayPal would not have been his choice but PayPal jibed with the software being used by the committee. Whether it is PayPal or another credit card processing company, they all take a cut of the money raised.

"Ever since the dawn of political contributions on the Internet, there has been some kind of merchant processor and the fees attached to it have always existed," Franklin said. "PayPal is just a very popular way to pay for things."

PayPal was founded in 1998. In 2002, Jerald Cumbus became the first candidate in Florida to use PayPal. Cumbus spent $76.06 on PayPal in his failed bid to become a state representative. In the current election, 200 candidates have made payments to PayPal totaling $62,942.

"Candidates for office use PayPal because it's the safe and easy way to collect donations," said a PayPal spokesperson, who asked not to be identified. "Open a PayPal account, download a simple HTML button, and you start accepting donations right away."

Using PayPal to raise campaign cash has become so popular that PayPal has a political campaign page. Campaigns that use PayPal pay a fixed percentage and a fee for each online donation. For campaigns that raise less than $3,000 a month using PayPal tools, the fee is 2.9 percent plus 30 cents on every contribution. That means PayPal would collect $3.20 on a $100 contribution.

The more money a campaign raises, the lower the fees. A campaign that raises between $10,000 and $100,000 a month online would pay a fee of $2.50 on a $100 transaction.

Kelley Burke, campaign manager for county commission candidate Melissa McKinlay, said they opted to use another service recommended by other candidates rather than PayPal. The important thing for candidates is to make it easy to donate, Burke said.

"In this day and age, we're all smart enough to know the credit card is the preferred mode of payment," Burke said. "The easier we make it, the more we'll net in the long run."

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(c)2014 The Palm Beach Post (West Palm Beach, Fla.)

Visit The Palm Beach Post (West Palm Beach, Fla.) at www.palmbeachpost.com

Distributed by MCT Information Services


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Source: Palm Beach Post (FL)


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