Obama’s Finance Fraud was expensive for the campaign

A commenter on Megan’s blog claimed the following:

A while back, I set up a web payment process for a client and they did not want address validation. Why? Because there was a charge for address verification and they deemed it unlikely that someone would want to pay a bill with a stolen credit card.

My response:

How long ago was that? The information I can find says

MasterCard offers AVS at no additional charge to all merchants who accept U.S. – issued cards.

Then there’s this

A Non-Qualified rate fee is the worst rate possible for processing a credit card. A merchant is charged a non-qualified rate for transactions that the merchant account provider (i.e. the bank) feels are high risk.

The non-qualified rate will be substantially higher than the Qualified and Mid-Qualified Rate.

A merchant is charged a non-qualified rate for credit cards that are processed without Address Verification. A merchant may also experience a non-qualified rate for transactions from foreign countries.

In short, Obama paid more to get AVS turned off.

Update:
Additional research found this:

Address Verification System (AVS): $0 – $0.05 per transaction

The AVS service checks to see that the billing address given by the customer matches the credit card. If you opt not to use AVS, VISA and MasterCard will not support your transactions and will charge you an additional 0.17% to 1.25% on those sales. Most merchant accounts do have an AVS charge, even if it’s bundled with your transaction fee. The AVS service works only with US credit card holders.  Currently, there is no AVS service in place for non-US credit card holders.

Let’s assume Obama got the 0.17% rate increase. His average donation in September was $86. He paid an extra 15 cents on each order, to “save” 5 cents. By disabling AVS, best case is he lost money on every donation > $30.

Big deal? Well, 0.17% of $150 million (his take last month) is $255,000. Having AVS on would have cost, at most, a third of that.

You don’t lose hundreds of thousands of dollars on an “innocent mistake” that you had to work hard to get done.

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3 Responses to “Obama’s Finance Fraud was expensive for the campaign”

  1. Obama Campaign Paid More to Turn AVS Off | Obama Shrugged Says:

    […] at Greg’s Weblog has done some online investigation revealing more evidence that the Obama campaign deliberately […]

  2. Anon Says:

    Greg, great post and I’d like permission to repost it if you don’t mind. Myself and a few Silicon Valley internet professionals will be launching a site exclusively dedicated to covering this issue – and we intend to cover it so long as Obama’s campaign accepts non-AVS verified donations and so long as Obama doesn’t disclose his donor list.

    Speaking of our new blog…would you be interested in being a contributor? If so, drop me a line at my email (you should have it it as part of this post).

  3. gregq Says:

    Feel free. It’s lovely to think I’ve done something useful. 🙂

    my email is gregq at live dot com

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