Political Fundraising Goes Mobile

There is a lot of buzz going around the beltway among political fundraisers about mobile credit card swipe dongles such as Square, Roam, and Intuit's GoPayment. Today's DailyCaller has a piece on how both Governor Mitt Romney and President Obama are using Square to raise money at events.Unfortunately, due to the complex nature of political fundraising, the dream of mobile fundraising does not quite match reality... yet.

DREAM

The political fundraiser's dream is that they can attach a credit card swiper to their smart phone and take donations from attendees of a political event. All you have to do is swipe a donors credit card as they enter an event and BANG you've got a donation.

REALITY

Depending on the brand of dongle (the little thing you attach to your phone to use to swipe the donor's credit card), you may be swiping the donors card up to 5 or 6 times before you get a good read.Once you have a good swipe, things get a little more difficult. As with all federal political campaigns, the campaign needs to not only collect the donor's money, they need to record the following to make the FEC happy:

• Donor's Address
• Donor's Occupation
• Donor's Employer

The campaign also needs to make sure the donor is eligible to donate. That usually means the donor has to check a box in a form saying that they are not a foreign national, a corporation, over the age of 18, etc, etc.What this all adds up to is that the fundraiser still is going to have a lot of data entry to do on their little phone for each transaction. While the mobile swipe process is better than having the donor fill out a paper form with their credit card in terms of security, it is not ideal solution.Remember that the credit card swipers' target market is small businesses who are selling products and services. Their goal is not to take donor data and record it to a database for FEC filings. Their goal is simply to pass funds from a buyer to a seller.

FUTURE

I believe that the current crop of dongles are simply a bandaid. Coming soon, I could envision at least two scenarios:One - anybody would be able to take a donation by simply taking a picture of the donor's credit card user their phone. The donor's personal information would be auto entered into the donor form based on a record passed by the financial institution. Cameras have become ubiquitous in mobile devices. why would you need the addition of a card swiper?Two - everyone seems to be pursuing a mobile wallet solution (aka - "Mobile Web Payments"), from financial institutions and credit card companies to mobile telecommunications operators (Nokia & Ericsson) to Google.   Once these solutions become real, it will be very easy to make donations between any two mobile devices at any time... as long as you have a signal.----------------------------------------------UPDATEJust to add more fuel to mobile fundraising / payment fire, VISA just announced a NFC based mobile platform:

Mobile World Congress 2012BARCELONA, Spain–(BUSINESS WIRE)–Visa Inc. (NYSE:V) today announced a new service that provides financial institutions and mobile network operators with a one-stop solution to securely download payment account information to smartphones enabled with Near Field Communication (NFC) technology. The new service was developed in collaboration with Oberthur Technologies, a leading Trusted Service Management (TSM) company whose software and platforms are used to manage the provisioning and activation of payment accounts on cards and mobile devices.The new offering by Visa brings together the necessary parties in the mobile payments ecosystem and lays the foundation for financial services providers and mobile network operators to securely and efficiently link Visa payment accounts to smartphones, while also offering a solution to manage those accounts post activation.“In the same way we have enabled the secure provisioning of payment cards for decades, we are now using mobile technology to securely provision mobile payment accounts over the air,” said Bill Gajda, Head of Mobile Products, Visa Inc. “Financial institutions, mobile network operators, and even transit operators now have a simple, secure process to activate payment applications at scale and make mobile payments part of everyday life for consumers around the world.”Working with Oberthur Technologies gives Visa access to technology that delivers Visa payWave, Visa’s contactless payment technology, and other payment applications “over the air” to a consumer’s NFC-equipped smartphone, along with the secure credentials needed to authenticate the consumer.“The combination of Oberthur Technologies advanced technology with Visa’s global secure network will deliver a powerful tool for financial institutions and mobile network operators to move quickly into the growing market for mobile payments,” said Arnaud de La Chapelle, General Manager, Convergence & Solutions, Oberthur Technologies. “We’re extremely pleased to extend our relationship with Visa in this innovative area.”The new solution addresses a crucial need for Visa account issuers, mobile operators, and others who want to enable mobile payments at scale. The next stage of the product, an interconnectivity “hub”, will enable frictionless “many-to-many” interactions avoiding the need for parties to form bilateral commercial and technical relationships, even for entities using other TSM solutions.How It WorksFor consumers the service will include support for Visa and non-Visa payment, loyalty or mass transit applications on their smartphone. Because of the flexible and global nature of the technology, consumers could, for example, use their mobile phone to download the appropriate mass transit application to pay for a subway ride in a distant city. A typical consumer experience to provision a smartphone for payments may include the following steps:The consumer purchases an NFC-equipped mobile phone that has passed Visa’s compliance testing, from their choice of operatorThe consumer contacts the financial institution that issued their Visa account, or responds to an offer from a service provider or operator, asking to activate mobile payments with their smartphoneVisa’s mobile provisioning solution links the appropriate parties and begins the process of provisioning the mobile phone for payment:Authenticates the account holder by requesting the user enter a passcodeFacilitate the exchange of secure “keys” among the various parties that unlock the NFC-enabled chip on the smartphoneInitiates the secure download of payment account information to the smartphoneIntel, with its new Intel® Atom™-based smartphones and tablets, has agreed to use Visa’s global provisioning service to enable mobile subscribers to securely download payment account information to NFC-enabled devices.