At the RightOnline Summit in Austin, Texas -- Slatecard co-founder Sendhil Panchadsaram announced that on August 1 we were reducing our credit card processing fees from 4.5% to 3.95%. That's the same fee as ActBlue -- a similar utility used by Democratic grassroots supporters.

From the beginning, we've been committed to providing the most honest, transparent, and cost-effective online processing system for Republican candidates and the Right kind of causes. Looking at the other guys' fees, we've clearly been doing just that.

But we had hoped that as we increased our volume, we'd be able to negotiate lower fees, and we are pleased that we've been able to do just that.

To be sure, there are likely other credit card processing solutions that appear lower, but when you start reading the fine print, you find out that there's always a per transaction fee, typically a monthly fee to use the system, a merchant account fee, and many other costs which are "hidden" from the casual observer. For example, even in our system every time someone enters a credit card for processing we're charged $0.35 and a percentage -- ranging from around 2% - 3.85% depending on the type of card being used, e.g., check card, credit card, visa, mc, amex, discover, etc.

Further, rather than having a confusing, shifting variable rate, we believe our community of activists and candidates has a right to know exactly how much of their donation will end up going to its intended destination. And by bundling multiple contributions using a Slatecard - we're only charged one transaction fee which helps save us money and has helped us reduce these fees. (Trust me, as volume increases it adds up.)

The bottom line is that there's no such thing as a "free" credit card processing system but we're just about as close as you can get.

We're proud to be the most cost-effective processing solution for Republican candidates and the Right kind of causes. Our hope is that the community will recognize our good will and chip-in a few bucks every now and then to help us keep the system up and running and even provide some capital to help pay our bills and expand the platform. It's up to the community to help us stay viable and we're willing to work hard to make our supporters proud to have supported us.

Revolution.

The Politico's MIKE ALLEN and JIM VANDEHEI piece, "Six ways the GOP can save itself," is an essential read and should serve as a roadmap for pulling the GOP out of this tailspin.

Their third nugget is worth posting in this space:

3. Beg for help: The Republican infrastructure is crumbling. Making matters worse, Democrats are erecting a pretty impressive network of donors, think tanks and activist groups that is exploiting the GOP’s structural weakness. The GOP “needs to realize what the opposition is and how formidable it is,” said former GOP leader Tom DeLay (R-Texas). “The Democratic Party is organized chaos, but it is so much better than what we are doing.” It will take no less than three to five years to fix, smart Republicans estimate.

For now, Republicans need their rich backers to crack open their wallets. Democrats such as George Soros are so much more willing than rich Republicans to fund get-out-the-vote operations and clever negative campaigns. The GOP needs to somehow cajole its big donors to fork over millions of dollars to counter Democrats and then achieve a competitive edge.

It needs to be smart while spending it, too. Influential Republicans feel the party must fortify intellectual think tanks, establish new activist groups and get a clue about using the Internet to rally its forces. The GOP also needs to fund programs to train young Republican candidates and activists.

“There is an entire infrastructure that needs to be thought through, and it seems to me no one is interested in building that,” said former Rep. J.C. Watts (R-Okla.).

Without a doubt, Slatecard.com is the tool that should be immediately embraced the Republican Party.

The reasons are simple:

• We provide the lowest credit card processing fees available (and we'll likely get them lower in the future). Keeping more money in the pockets of the campaign is commonsense. No set-up fees. No monthly fees. Smarter technology.
• Honesty and Transparency remain essential ingredients to our effort.
• 47 candidates have already embraced Slatecard. Most of these candidates are challengers with a few incumbents. It's a heckuva good start.
  
• After a mere six months, we've earned our spot at the table by producing results for Republicans. Results should be welcomed by the establishment.
• Our Donor Analytics will prove extremely valuable to candidates who care about better targeting a message to their supporters.
• We're backing McCain - with $25 donations at a time - we are helping tap the Long Tail that could help change the fundraising game for our next President.
• Our platform remains insanely reliable and our commitment to customer service is something that we care deeply about and take seriously.
• And we're not resting on our laurels. We're in the process of building the next version of Slatecard which I guarantee will be the most powerful tool ever made available in politics. We could build and deploy faster with more resources.
  

We've built the platform for a community of Republican activists that could easily be embraced by every Republican candidate running for Congress or the Senate. Ditch your costly credit card processing system and engage Slatecard.com. A wider embrace now would add to our growth and the collective success of the Republican Party and help ensure the longevity of the Republican Party.

Sadly, the old saying, "you can lead a horse to water but you can't make it drink" remains relevant.

Six months ago we launched Slatecard.com.

My co-founder, Sendhil Panchadsaram and I wanted to build a new kind of utility for activists on the Right. A platform built on pillars of innovation, fairness, openness, honesty, and transparency. A website platform that could finally counter the Left's ActBlue, and do even much more.

Today, we're pleased to announce that we've crossed the $300K milestone and have nearly 5,000 individual donors on our list.

* Total: $310,363.58
* Supporters: 4,942

To be sure, we've made great progress without any resources. Though some political operations have the luxury of being funded with millions of dollars from big donors or make a profit by charging ridiculous credit card processing fees, we've done things a little bit differently.

From day one, we have "charged" a flat 4.5% credit card processing fee -- and we've been honest with you and our candidates about that cost. We've never charged a monthly or set-up fee to candidates. And a majority of that processing fee goes to Visa, Mastercard, American Express, Discover and our merchant account fees. We've relied on the Slatecard community for donations to keep the operation up-and-running.

And remember, our goal is to get this processing fee even lower. We're working on it.

On the financial side of things, we're pretty deep in debt. As you may imagine, running a comprehensive, 100 percent volunteer operation like Slatecard is tremendously expensive.

If you want to ensure our continuity and help our effort succeed, I'm hopeful you'll consider making a generous donation of $250, $100 or even just $25 to Slatecard.com PAC today.

We value the early adopter candidates who use Slatecard. In fact, 39 federal candidates are using Slatecard exclusively to process their online donations. They are a huge part of contributing to our early success and we owe them a huge debt of gratitude for believing in us. We will not let them down and we hope to double this number before the election is over.

And you can see how the Slatecard utility has empowered candidates themselves to use the Internet smarter through our top Slatecard: Iraq Veterans For Congress, who have collectively raised more than $12,000 for each other by working together as a team. Their effort is even getting noticed by media hubs like the Wall Street Journal.

Which leads me to what's in store through this election and how you can help impact our vision for 2009.

Through 2008, you may notice a few upgrades particularly with regard to the candidate's secure donation page. They've asked for changes and we're going to make them. There will be some other changes that we'll let you know about on the blog.

As always, we need your help to spread the word on a continuing base. Please consider forwarding our emails around to your friends and ask them to join up at Slatecard.

We have a vision for what Slatecard will be in 2009, but we need your help today to make it even better.

Consider this an open invitation for you to send your ideas -- no matter how big or small -- regarding what you hope Slatecard will be in 2009. We're planning a strategy session in the near future and we promise to review every single idea that comes in.

Want to add your picture and website to your Slatecard? How about a directory for Slatecards and a featured list of Slatecards? State and local candidates? Want to be able to completely remove candidates from your Slatecard? More widgets?

Look, I promise, we are listening. Send me an email and let me know your wish list. If possible, please try and flesh out your request as much as possible and put them all in one email. Take some time and think about it. Make a solid argument.

Today is the first day of the next six months, and we're glad that you're a part of this effort. Thank you for your continued support.

In his latest post, "Rightroots, Big Red Tent, and Slatecard: An Assessment," William Beulter of Blog, P.I. and New Media Strategies, has said some really nice things about what we're doing here at Slatecard. As Bill did at his blog post, let me also disclose that Beutler is a friend but I had no knowledge that he was working on this essay.

Here's the comment I left on his blog post:

One of the guiding principles at Slatecard.com PAC is our commitment to openness, honesty, and transparency with the Slatecard community. That's why it is important for us to let you know as much about the backend processing of transactions as possible so that you feel comfortable using our utility.

While we fully explain the processing of transactions in our "Frequently Answered Questions," it is important for me to break it down in this space which covers a larger audience based on the past few days' site analytics.

To be clear, no matter what contribution you make to a candidate or as a gift to Slatecard.com PAC, 95.5% of your transaction will arrive in the form of a check from Slatecard.com PAC to that recipient candidate or committee with all of the FEC-required donor data to properly report the contribution. In other words, the fee which is charged to the candidate for using Slatecard.com PAC is 4.5%.

A majority of that fee goes to Authorize.net and the merchant provider who literally makes the transaction. Their fees include monthly fees, per transaction flat fees, and varying percentage fees based on the type of credit card used. We also pay a monthly fee for an SSL certificate to safely and securely encrypt your personal data along with fraud protection service to protect our users as best as possible.

Here's a chart to help explain how this process works based on different donation sizes:

As you can see from the chart above which only accounts for a few of the fees associated with operating a comprehensive online merchant system, even at a rate of 4.5%, the cost of processing lower dollar contributions exceeds the fee. That's why any remainder of the fee for higher-dollar contributions will be used to help offset low-dollar contributions, pay our monthly fees for the merchant gateway, and help pay other expenses associated with running (and hopefully expanding) the PAC. Without a processing fee, we could not ensure the longevity and viability of a utility with a national scope.

By way of comparison, the cost of transacting donations using a third-party system like PayPal is about the same as Authorize.net's fee structure (monthly fee for merchant gateway, per transaction fee, percentage of total dollar amount fee). Once we have some relevant statistics, e.g., average donations, type of credit cards being used, and whether people want more options (like PayPal), we will review and amend our structure and/or provider as appropriate.

As always, we want to ensure that you understand as much about the process as possible to better understand the motives of the utility. In other words, the goal of the 4.5% fee is to essentially break even with our cost of doing business while providing a flat fee rate that our community and the recipient candidates easily understand at all times.

Therefore, we are 100% reliant on our community to help us operate and expand beyond the beltway. That's why on each donation, we ask for a voluntary monetary "tip" to help us do just that. If we don't offer a good service to the community, and if you don't think the work we're doing is valuable, we recognize that people won't support our efforts. But for those that do support us, we promise to make you proud to have helped.

If you have feedback, please send us an email at team AT slatecard.com. (As we noted on the blog, comments are disabled as we work through a bug.)

UPDATE 11:50 PM: A Slatecard user from Maine has asked if other sites, like ActBlue, charge a transaction fee. The answer is yes. Earlier this year, ActBlue wrote a blog post on how they had to make the organization sustainable and "built to last":

Moving political money properly takes a lot of gear ($) and staff ($$).  As ActBlue grows into the premier fundraising platform for Democrats up and down the ballot, Auburn Quad's responsiblity to maintain and scale the system grows as well.  These things are anything but cheap.

Here's how it all works.  Auburn Quad charges a service fee of 3.95% against gross contributions.  Most of that fee ends up going to the credit card companies; about 1.5% stays at AQ.  That 1 1/2 cents on the dollar pays for pretty much everything behind the website: computers, the programmers, and the coffee; or in specific terms, all the additional transactional costs borne by AQ to receive and remit contributions on your behalf.

Meanwhile, the real action still lies inside ActBlue.  Your tips and other generous contributions to the PAC allow us to extend our operations into new states, assist thousands of campaigns with their online fundraising, hold training events across the country, share best practices with our partners, and most importantly, offer these tools and top-flight customer service *for free to everyone*.  ActBlue is working to empower a new class of active Democrats who can reshape the country's political dynamic and grow our party for generations to come.  Every last bit of this work is funded with your contributions.  Freed from the financial responsibilities of the payment platform, ActBlue spends every last political dollar on politics. 

We're building Slatecard to last and grow quickly -- from day one.