Q&A with David Urban, inventor of Points for Politics
Rewarding political career points him to political rewards invention
In the very near future, America's presidential election may be decided on points -- rewards points, that is.
The same holds true for every publicly elected political contest coast to coast, from congressional and mayoral elections to contests for aldermen, school board and dog catcher.
The man poised to unleash mass point redemption upon the hustings is David Urban, a lawyer and high-powered Washington lobbyist with American Continental Group, former chief of staff to Pennsylvania Sen. Arlen Specter, West Point grad and Bronze Star veteran of Operation Desert Storm.
David Urban, creator
of 'Points for Politics'
Former chief of staff to former Sen. Arlen Specter and now a high-powered lobbyist, David Urban patented an idea that will easily convert credit card reward points into political candidate contributions.
Over the past six years, Urban used his scant spare time to patent and trademark an online redemption shortcut called Points for Politics that enables cardholders to easily donate reward points to their favorite candidates. His final patent was approved in August.
Could Urban's killer app change the face of political fundraising with the click of a mouse?
Washington insiders from Capitol Hill to 1600 Pennsylvania Avenue vote yes.
CreditCards.com: You're a self-described "shoe-leather lobbyist," not a payments entrepreneur, much less an inventor. How did you come to dream up Points for Politics?
David Urban: What happened is I have a lot of American Express rewards points. Every year I get my points catalog and it's filled with stuff I don't want like Big Bertha drivers and big-screen TVs, so I never redeem any of the points; they just sit there. At the same time, I, like many other people, charge all of my political contributions. Why? One, to get the points. Two, because I'm a lobbyist.
CreditCards.com: How does lobbying affect how you donate?
Urban: Since a great many contributors are registered lobbyists, there is a quarterly disclosure requirement where we have to disclose who we're giving money to. I make a lot of donations, so by donating electronically, I'm better able to keep track of them.
CreditCards.com: So that makes your bookkeeping easier. Where's the problem?
Urban: If you want to donate $1,000 in points to Obama for President, you have to go on your credit card's site, enter all your information and put $1,000 cash on your card, then leave that website and go to the Obama for President website and enter the exact same information you just entered in. It's cumbersome, there are lots of steps and every time I enter something on a website, the date's wrong, the CVC is wrong. It's not "sticky" and it's a pain in the ass.
So I thought, wow, I bet I can combine this into one step and just go straight from the card to the candidate. I combined those five or six steps into basically one or two clicks, put my widget on the candidate's website, done. I thought about it, drew it up on a little diagram, and about six years ago filed for a business patent on it and lo and behold, was granted patent in August.
CreditCards.com: I'm guessing this idea was well received on Capitol Hill.
Urban: (Laughs) I signed up a whole bunch of customers. The Obama campaign signed up; I received a letter from Jim Messina, the head of their business operations, who said if this was operational, they would do it tomorrow. The Romney guys I couldn't get to sign on because they're just distracted. I signed up both the House Democratic and Republican campaign committees, all the Senate guys. Because they see the benefit, not for the $1,000 donor but for those lots and lots of people who have $25 and don't need a blender, don't want an alarm clock and would gladly donate their points to Barack Obama or their local congressman or state senator or city council member.
For my pitch, I always take along a baggie from my office that I throw my change in everyday; at the end of the year, I throw that in the Coinstar machine and it comes up to like $400. Points are like that -- change in your drawer, real money that you don't even think of as real money. Political campaigns are always in search of new money.
CreditCards.com: You have no ulterior motive to help one political party over another?
Urban: The beauty about this is it's completely agnostic; it can go on anybody's website. I've already signed up both sides. This is not a partisan tool in any stretch of the imagination. The money can go to PACs, whomever. I think that it will tend to benefit small donors because if you're a wealthy person, you can write a $1,000 check. But if you're a college student or a struggling worker and can't afford $25 but you have $25 in points that you didn't even know about, you can be part of the democratic process; you can help elect or re-elect the president.
CreditCards.com: Who will market it?
Urban: The beautiful part is, the card issuers don't spend a penny because the campaigns themselves would pump the money in to drive people to use this. Candidates are going to drive people to our site. It's going to be on their email solicitations, the fundraising letters you get, everywhere. I've been talking to several major points generators and some of them have 1 trillion outstanding points, so $1 billion outstanding dollars.
CreditCards.com: Will Points for Politics play a role in the 2012 presidential election?
Urban: We're probably going to miss this election cycle, which is fine. The good part is I have this patent for 17 years. I've funded all the money. I've done all the legal work. And my secret sauce is, I have the credibility in the political arena. I could get 535 members of Congress and 50 governors to sign up tomorrow because I know all the fundraisers, I know the candidates. I've already gotten them to sign up. I just need a bank to partner with me, to be my beta test.
CreditCards.com: American Express would seem a likely candidate.
Urban: Actually, AmEx is doing something similar right now with Amazon -- a pay-with-points provision that is basically my process exactly. The thing that I can't do is, every card has a different point redemption system. The technical guys have all said it's no big deal; it would be like a half-day's work to figure that out and recode it. That is not an impediment.
CreditCards.com: Where does a high-powered lobbyist find the time to become a payments pioneer?
Urban: I know. I did this in my spare time. Some of my friends at Harvard B-school are saying, "Urb, you should just give this to one of these Harvard dudes, give them some equity and let them run with it." But why would I want to give it away? I want to keep it. Since I kind of missed this election, I'm going work on it when I have some more time in November after the election's over when things calm down for me. I kind of work in fits and spurts.
I talked to one techie who said, 'This is like wheels on luggage. I don't know why we never thought of this before!
CreditCards.com: What's the reception been like from the card issuers?
Urban: I was a lawyer before in a previous life, so I know that lawyers basically say no to everything because it's just easier and less risky. So when I started to talk to the card companies, they said, 'Look, we love this, it seems like a great idea, but we're just risk-averse right now. We're committed to these three things, we've got money to do a couple projects and this would be like the fifth product we could do.' Because their concern is throughput; these guys want to do deals that have huge throughput. It's like, how many millions of bucks a year can you guarantee us?
CreditCards.com: How do you answer that?
Urban: My response is, 'I can't tell you because we haven't done it. I can tell you that there are a couple billion dollars a year that's contributed and they have a billion dollars in cash, a trillion dollars in points, outstanding, so I'm sure it's a good chunk.' It's tough to say without having a beta someplace.
CreditCards.com: What's your split on Points for Politics?
Urban: I've cut it such that I get 10 percent back on every buck donated. That leaves enough money in there so I could offer a rebate so that the cards don't lose money because the points would be redeemed at less than par. I would be driving people to redeem their points, but at a favorable rate to the card companies . The Federal Election Commission says that the fee I'm charging is within the normal bounds of fundraising.
CreditCards.com: One small step toward easier point redemption, yes?
Urban: Yes. Some cards are even moving to point-of-sale redemption, so when you go to Home Depot, you swipe your card and they say, 'Hey, you want to pay with points for that 2-by-4?' As they look toward points as a real currency as is evidenced by the Amazon move at AmEx, I think that this is a natural progression that's going to happen. There's probably $1 billion to $2 billion spent every two years on Congressional elections, and more like $10 billion every four years on the presidential election, a ridiculous amount of money. Hey, I'm a patient guy. This is going to work. I talked to one techie who said, 'This is like wheels on luggage. I don't know why we never thought of this before!'
CreditCards.com: If the stars align, you could wind up a very, very wealthy retiree. Would you sell your patents for the right price?
Urban: I'm not a greedy guy. If somebody offered me a lot of money for it, I'd rather get it up and running just to prove that I could do it. There is some satisfaction in Maslow's hierarchy of needs, in the self-actualization category, where you say: I thought of it, I did all this work and now it's functional, right? There's some satisfaction to be able to do that. Also, there's probably some satisfaction to cashing a big check, too, so I'm not quite sure which to trust.
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