How Bernie's Small Donors Are Making Credit Card Companies Rich


Bernie Sanders and Elizabeth Warren have eschewed big-dollar fundraising events to support their 2020 campaigns, instead turning to their grassroots supporters for small-dollar contributions. It’s central to both candidates’ appeal: the idea that everyday people, not big financial institutions or wealthy and powerful interests, are financing—and benefiting from—their efforts.

Donors have responded in droves— donating tens, hundreds or even thousands of times, in amounts as small as $1. But what these grassroots supporters may not realize is that, in making small, repeated contributions, they have, in aggregate, delivered a huge payday for the middlemen, often large banks and financial institutions that process those payments.

“It's important that people realize that the more transactions they engage in, the more credit card companies are making money,” said Jonathan Zucker, the co-founder of Democracy Engine and former CEO of ActBlue, the nonprofit payment-processing behemoth catering to Democratic campaigns. “While it may only be a matter of cents, those pennies pile up.”

A Newsy analysis of Federal Election Commission data found that since the start of the 2008 election cycle, federal political campaigns have paid more than $220 million to credit card-processing companies including American Express, Bank of America and PayPal, among dozens of others.

Between the 2008 and 2016 election cycles, the amount nearly doubled, from $28.2 million to $51.5 million. The 2020 cycle is on pace to shatter that record: Through October, the 2020 campaigns spent more than $23.8 million in processing fees—more than a year before the election.

Nearly one-tenth of that money came from Sanders’ presidential campaign, which has paid credit card processors more than $2.3 million—the most of any candidate this cycle. Second is Warren, whose $1.75 million in processing payments narrowly edged out Pete Buttigieg’s $1.73 million.

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When you give a dollar to a political campaign using your credit card, a portion of that money is paid to a range of companies—the bank that issues a donor’s credit card, the campaign’s bank, the credit card company, etc.—and is generally taken as a percentage of the donation, plus a fixed amount per transaction. Even ActBlue, which advertises a flat fee of 3.95 percent, gets charged a per-transaction fee behind the scenes, though the organization would not give exact amounts.

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