HN Gopher Feed (2017-12-07) - page 1 of 10 ___________________________________________________________________
Patreon's new service fee spurs concern that creators will lose
patrons
245 points by slyall
https://techcrunch.com/2017/12/07/patreons-new-service-fee-spurs...___________________________________________________________________
zapt02 - 3 hours ago
This is doubly weird because Patreon only charges users once per
month, so they are really only paying one transaction fee per user.
They also charge VAT for european pledgers, already bringing up the
pledge amount by 25%.
coffee9 - 5 hours ago
Setting themselves up for a fall with all the recent rules and fees
they're adding.
walterbell - 5 hours ago
Is there a viable alternative to Patreon?
egypturnash - 4 hours ago
Kickstarter's got one, but it's invite-only right now.
https://d.rip - I could find no sign of their fee structure
anywhere on the site. There's also https://liberapay.com - a non-
profit Patreon clone, whose code is public. You may have to be
creating open source content, I'm not sure. Seems to pay weekly,
does not take any cut themselves (?!?!?).
cdancette - 4 hours ago
For Europeans, Tipeee which is a french startup. The fee depends
on the amount you pledge. https://www.tipeee.com/about/fees
[deleted]
jrs95 - 4 hours ago
If there isn't now, and this fee structure is very unpopular,
there probably will be. Their service doesn't strike me as
something which is particularly difficult to replicate.
simantel - 4 hours ago
Kickstarter launched Drip recently: https://d.rip/
kirillzubovsky - 4 hours ago
We used to run a marketplace for designers and one of the things we
learned (too late) was to charge more. Pick a number, double it,
and you are still probably not charging enough. You can't run a
service on dog food forever.Sure Patreon raised funds, but those
funds can't subsidize them for a lifetime, they gotta get
sustainable and do it fast. There is not a chance they will be
wasting time to build their own credit-card processing, so Stripe
fees are here to stay.Although contributors are important, Patreon
would have nothing without their creators. Creators make the
content which people pay for, and creators need to put food on the
table to keep doing what they are doing.If you are a creator making
$2,000 a month, for example, then an extra $100 is an extra trip to
the grocery store, and that's important. If someone wants to fund a
creator, they will, and the extra couple of bucks isn't going to
discourage that.Furthermore, I suspect Patreon has data on how much
is being contributed by each user. I doubt, like the top comment
suggest, that 1 person on the platform would fund 100 creatives.
Probably 1:3 ratio, with a couple of outliers, is most likely.This
is a good change.p.s. If they don't have it yet, expect Patreon to
start partnering with places like Teespring to offer merch by their
creators. It just makes sense.
trowawee - 4 hours ago
> If someone wants to fund a creator, they will, and the extra
couple of bucks isn't going to discourage that.I'm explicitly
hearing the opposite from creators on Twitter. People are already
seeing patrons defecting from projects over this.
kirillzubovsky - 2 hours ago
Like Jason Lemkin said, the customer who churned is the
customer you've never had.
freeone3000 - 2 hours ago
Well, small problem with that - words have meanings. They
were a customer, in that they were giving Patreon money. Now
they are not a customer. It's not that they were never a
customer, because they were giving Patreon money. And now
they're not.
setpatchaddress - 3 hours ago
Patreon is presenting this as solely as an improvement for the
sake of the creators (see https://blog.patreon.com/updating-
patreons-fee-structure/). If it's a necessity to Patreon alive,
they're not presenting it as such. I have yet to find a creator
who is not upset about this change. And they seem to be ignorant
or uncaring about the uproar it's caused.This is the end of
Patreon if they don't course-correct very quickly.
kirillzubovsky - 2 hours ago
Again, speaking from experience, of course as the company you
would present it as a benefit, and creators might get upset,
but trust me they would be more upset if/when the site shuts
down.
egypturnash - 23 minutes ago
Creators are currently upset because some of them are
starting to see patrons stop supporting them due to this. Oh
and also upset because Patreon is presenting this as "putting
more patron's money in creator's pockets" when it's clearly
not for anything outside of the cherry-picked examples they
give.
rsynnott - 2 hours ago
> If someone wants to fund a creator, they will, and the extra
couple of bucks isn't going to discourage that.An awful lot of
patreon users give a dollar or two a month to a bunch of
creators. It won't just be an extra couple of bucks for them;
it'll be an extra 30% or so.
panic - 4 hours ago
It's worth remembering that less than three months ago, Patreon
raised $60M in a series C (https://patreonhq.com/new-round-funding-
816d5a592477):I?ve got some exciting news! Patreon has just secured
an additional round of financing ($60M!), which means we will be
scaling our team, building faster, and building more???all in
service of getting you paid what you deserve to be paid, for the
value you give the world. YESSS!So why is Patreon changing their
fees now, when they just got a ton of money and can basically do
whatever they want in order to grow? Their Zendesk article
(https://patreon.zendesk.com/hc/en-us/articles/115005631963) isn't
much help:Q: Why is Patreon doing this now?A: Patreon exists to
allow creators to get paid what they deserve to be paid, for the
value they give the world. This is awesome and to continue this
vision, we need to constantly evaluate our processes. As we work to
deliver bigger and better features for creators and patrons in
2018, we felt like sooner than later made sense to put this change
into effect.This doesn't actually answer the question: why do the
fees need to be changed at all, whether sooner or later? Were
creators asking for this change? What was wrong with the way it
worked before?The obvious answer is that Patreon needs more money
for some reason. But? they just raised a bunch of money. So I
really don't understand how this change makes sense or helps
anyone.
TazeTSchnitzel - 3 hours ago
Patreon is a startup which is a conduit for and yet a leech upon
the incomes of struggling people[0]. An service of its kind
should not be a for-profit operation, the incentives are
perverse.Kickstarter is a Public Benefit Corporation, so I'm
slightly more enthusiastic about the potential of their offering
(Drip).[0] https://theoutline.com/post/2571/no-one-makes-a
-living-on-pa...
nemothekid - 2 hours ago
Thats a pretty insightful article - I has always assumed that
Patrons that could live off Patreon were concentrated at the
top, but I never realized just how few of them there were. It's
soured me a bit on Patreon, especially as it garners more
comparisons to YouTube's ad related model. To acheive minimum
wage on YouTube, you have to earn between 300,000 - 1,000,000
views per month (depending on how much the algorithm likes
you). Comparing some of my favorite YouTubers to the data on
Graphtreon, it seems to me YouTube is still more lucrative
while Patrion does contribute a non-negligible amount of money.
swivelmaster - 1 hours ago
IMO Patreon is better for more niche creators who have a
smaller but more passionate audience. Sure, you can make a
ton of money off of YT ad revenue if you're pulling in a few
million views per video and putting out multiple videos a
week, but there are a lot of YT creators who don't pull in
those kinds of numbers and can make a lot more via
Patreon.HBomberguy is a favorite of mine - he publishes high-
quality, researched, edited videos, an average of once every
few weeks, gets 100k-350k views per video, and via Patreon
makes $6k/video. There's no way he'd make even close to that
much via YouTube.edit: Nice, you're 'nemothekid' - part of my
last name is in your username :D
loceng - 2 hours ago
Nothing that is a utility should be for-profit (relating to
basic survival and quality of life), however the VC model
requires such fast scaling (as part of this VC money can help
kill what would otherwise become a successful service through
copying and scaling faster/competition); this is ultimately why
subway systems, which started off as individual privately owned
lines, were bought by the public. The issue is always
capitalism and competitive factors, people who want to get
ahead in the world - to make the world a better place - without
having a collaborative mindset or understanding their actions.
Facebook would be in the best position in the world to
facilitate this, however current leadership hasn't ever shown
the compassion necessary to understand and guide this. Part of
the issue is that such a platform or ecosystem requires
understanding that you need to share - meaning that value
created can't all be captured/controlled or measured. Short-
term scarcity vs. long-term abundance thinking.
qdot76367 - 2 hours ago
One of the divisions here is that while Kickstarter is a public
benefit corp, they've also had an extremely negative view of
adult related material, something that a lot of us on patreon
base our campaigns on. This is why a lot of adult product
campaigns end up on indiegogo.I'm sort of suspecting the same
will happen with drip. While the sentiment of a PBC is nice, it
doesn't really do many of us much good since we figure we have
no chance to host there anyways. Even at the current fee
structure, Patreon is still far better than past tries at adult
related crowdfunding services, like Offbeatr (which you had to
pay to even be considered for).
j_s - 2 hours ago
Post-C-VC Patreon is trending away from NSFW too...An Open
Letter to Patreon |
https://news.ycombinator.com/item?id=15547801
hbosch - 1 hours ago
Speaking of Kickstarter, do you think this change will push
creators over to Drip[0]? Is Drip a PBC as well?0.
https://d.rip/
dangerlibrary - 1 hours ago
> ?2017 Drip U.S., LLC. By Kickstarter, PBC.
Disruptive_Dave - 29 minutes ago
Drip was acquired by Kickstarter, maybe 2 years ago.
[deleted]
usrusr - 3 hours ago
?We will invest to help you growing if and only if you stop
acting like a VC bonfire charity and start operating like a
business"I could well imagine investors to occasionally say that.
The fees may have been a condition for getting the capital.The
backwardness of the timing is well within the range of weirdness
that can be expected from a compromise that was a difficult
struggle to get.
zzleeper - 1 hours ago
Back of the envelope calculations:Investors clearly want them to
be profitable; maybe not now but eventually.They have a $450m
valuation and $150m in sales, for which they get 5% ($7.5m) [1].
According to Crunchbase, they have 50-100 employees. Assuming
only 50 employees, they are spending at least $15m in wages (plus
health insurance, etc.), plus fixed expenses (SF building, AWS,
etc.) and advertisement.So there is no way they would be making
ends meet with their 5%. Even assuming they become 5x bigger
while keeping the same expenses, they might still be losing
money. The only way for them is to raise fees.Sure, another
option is to keep costs down, everything streamlined, don't spend
on advertisement, etc. but as others pointed, you can't pick that
route if you have investors.[1] https://techcrunch.com/2017/09/14
/patreon-series-c/[2]
https://www.crunchbase.com/organization/patreon
DigitalJack - 3 hours ago
It's cash flow vs cash on hand. If they are doing this as a part
of getting positive cash flow, then good for them.
TillE - 4 hours ago
> Were creators asking for this change?Nope. And the absolutely
universal response, from tiny artists all the way up to Chapo
Trap House (the largest Patreon creator by far) has been firmly
against this change.But investors put in money expecting to get
more money out. That's the only credible explanation I can see.
They're lucky that Drip isn't up and running yet so there can't
be an immediate reaction.
gkya - 3 hours ago
Drip? Is it this: https://d.rip/
pronoiac - 2 hours ago
It's like Kickstarter's version of Patreon.More
info:https://www.kickstarter.com/blog/introducing-the-new-
driphttps://news.ycombinator.com/item?id=15704169
duck - 3 hours ago
Currently invite-only:Drip is currently in an invite-only
period for creators. We plan to open up more early next year,
and you can drop your email in at the bottom of the homepage
to be notified when we do.
JeffreyKaine - 3 hours ago
This was likely the strategy. The board wanted more profit,
knew they needed to change some things, and decided to do it
before a real competitor made it to the scene.
siffland - 3 hours ago
Amen. Like always it is all about the Benjamin's. They are a
for profit business. The best thing you can do is switch to
another service with better rates. Most people wont do that.I
currently give $38 a month to 19 creators ($2 each, I don't
really have much to give). So that is like what $13 in fees
for me. I think not.
robryan - 2 hours ago
Patreon would only need to bill you once, not sure why they
need to add processing fees to each pledge?
trowawee - 2 hours ago
Because it lets them extract a lot more cash from their
users under the cover of processing fees.
runj__ - 1 hours ago
They could argue they're potentially paying a transaction
fee when they're paying the creator if you're the only
patreon. That's a silly argument though. I'd be happy to
pay a single 2.9% of my total pledges + a single 35c
fee.This just kills $1 donations (and in my mind:
anything up to $10)
njarboe - 1 hours ago
I agree. Without an efficient micropayment system
available, I can understand a charge per transaction. But
adding a transaction fee to each pledge, when the patron
is making one monthly payment, is a bad idea. Maybe they
want to get rid of patrons supporting lots of people at
low levels for some reason.
dba7dba - 4 hours ago
It helps the funds that gave $60M to patreon. Pretty simply imho.
You know, follow the money.
arielm - 2 hours ago
Unfortunately raising money isn?t a proxy for profitability. In
many cases it?s the opposite. It could be seen as a proxy for
potential, but potential alone doesn?t pay the bills.This fee
feels a lot like the fee a merchant would be charged for a credit
card transaction, so in essence Patreon is passing on their
fees.I wonder why they don?t have a structure akin to micro
transactions, where there is no fixed fee but a slightly higher
variable fee. I?d guess most of their transactions are probably
small enough.
egypturnash - 1 hours ago
Originally half of the entire value proposition of Patreon was
"backers pledge small amounts to multiple artists, Patreon
bundles these up under one monthly charge, thereby spreading
transaction fees fees around". Or in fewer, longer words:
Patreon is a micropayments aggregator.And it worked pretty
well! A lot of creators got paid, myself included.And now
here's Patreon with a new fee structure that appends a
percentage plus a minimum fee to every single transaction. So
much for micropayments.
nemothekid - moments ago
Do you know where Patreon said that? I had a hunch that what
was what Pareon was doing but I could never find a source for
it.I think it's way more likely that Visa/MC came knocking on
Patreon's door and told them to stop doing that, forcing them
to either eat the fees, or pass it on to someone else, and
now Patreon has to eat the bad PR.
panic - 3 hours ago
Also, I'm going to reply to my own comment to point out a quote
from that patreonhq.com post (by Jack Conte, a co-founder):I want
Patreon to be different. I want creators to feel understood by
Patreon.The only way creators will feel understood is to include
them in the decision-making process. If I were a creator making
money on Patreon, I'd be organizing a new site, co-owned by other
creators, where everyone is involved in the decisions made by the
company.
cdancette - 3 hours ago
That would be really great, an organization, owned by its
members, that would manage the site.It just takes someone to
launch this, and very hard work
staz - 2 hours ago
You mean like a cooperative or an union?Filthy communist ! /s
PeachPlum - 2 hours ago
It was the Co-Operative Society in the UK that joint funded
the Manchester Ship Canal, first national UK distribution
service, first to promote Fairtrade goods. They were the
UKs largest grocery retailer by far.Today they are still
6th but with 4million members.
egypturnash - 3 hours ago
https://liberapay.com
cdancette - 4 hours ago
I think patreon should be way more precise to how much is going to
the creator and how much they take when you make a pledge.When I
pledge 1$ to some creator, I was unsure whether the creator would
get the whole money and I would pay fees in addition, or if patreon
would take the fee on those 1$.
astura - 4 hours ago
Well, that's not at all unusual, 99.9% of credit card
transactions you don't know the fee the merchant is paying.
protomyth - 3 hours ago
Hold up, they take one charge on my PayPal and if I understand this
correctly, they are going to charge me for each of my pledges?So, 4
x $1 pledges that are taken as one charge will now cost me $5.52
($1 + $0.35 + $0.03) * 4))?
kevin_b_er - 1 hours ago
Yes. They only charge you once, though. So the extra fees
aren't payment processor fees anymore and they pocket the rest.
Calculate the differential on the paypal transaction fee and
you'll arrive at patreon making some sweet percentages.Patreon
used to have PayPal charges 5% + $0.05. So let's presume they're
paying the same.They charge you once for $5.52. Paypal gets
$0.326 + $0.05 out of it. $3.80 goes to creators. Instead of
Patreon making $0.20, they now make $1.344.Yes, you read that
right, Patreon is making $1.344. ~35% profit margin vs 5% off
your donation. They've multiplied their cut several times over.
huac - 3 hours ago
I'm fairly sure this is tied to anti-money laundering rules (but
would be happy to be corrected). Basically, if Patreon bundled
patron payments and then paid them out to creators, it could be
construed as transaction laundering.The basic problem is that it
would be cheaper for everybody involved if Patreon would charge
each patron a bundled amount for all their supported campaigns, and
then pay out to each creator everyone's support to them. This means
that there are N + M transactions, where N is number of patrons and
M is number of creators. However, due to a myriad of rules, they
actually need to pay out N * M transaction fees, because each
patron's contributions will be going more or less directly to each
creator (minus Patreon's cut of course). The extra fees more
accurately represent the cost of doing business with credit
cards.This article explains the AML rules in this area:
https://www.trulioo.com/blog/transaction-laundering-a-growin...
raesene9 - 2 hours ago
I'm not sure that this change has anything to do with AML.Patreon
already does bundle payments to creators.I get billed monthly for
my various followings. That won't change at all under the new
system (AFAIK).What changes is that Patreon charge me for every
pledge instance that I use, which is basically crap as it doesn't
cost them any more if a creator has 1, 5 or 10 pledges per month,
they bundle it up and make one payment to the creator.I have no
problem with the idea of Patreon charge patrons rather than
creators for fees, but the "per pledge" billing is terrible.
endgame - 2 hours ago
If it's AML, then Patreon should come out and say it's AML, and
point to the rules they have to comply with. Not write feelgood
fuzzy bullshit that actually ends up with them taking a huge
slice of the pie.
rsynnott - 2 hours ago
> I'm fairly sure this is tied to anti-money laundering rules
(but would be happy to be corrected). Basically, if Patreon
bundled patron payments and then paid them out to creators, it
could be construed as transaction laundering.I doubt this. If I
buy 10 1 euro iPhone apps in a day, Apple will charge me $10, in
one transaction, then eventually pay out a euro less their fees
to each developer. I don't really see why this would be
different.
huac - 1 hours ago
These are recurring payments which might be treated
differently.
xchip - 3 hours ago
If that is the concern they can go after tax havens, there is
where the billions are.
1_2__4 - 5 minutes ago
So assuming this is yet another VC-funded firm being pushed to only
go after "whales" and cull undesirables... Who are the whales, and
who are the undesirables? My tinfoil hat says adult art is made up
of more/smaller pledges and they're hoping this will run them off
the service. That's typically why companies do this.
pwinnski - 4 hours ago
So patrons will now be responsible for covering the Stripe fees,
and Patreon is still taking an additional 5% for their services.The
Stripe fees were previously taken out of the creators' portion, so
it made a big difference to a creator whether they had one patron
for $100/month or 100 patrons for $1/month. But that was hidden
from patrons, who could easily and happily pledge $1 to a dozen
creators.Can I now pledge 63 cents, so that the cost to me is
$1?Also, I'd be shocked if me pledging $1 to a dozen creators
resulted in a dozen Stripe charges. Clearly Patreon should run
those charge once, so my $12 costs only 70 cents from Stripe.
ceejayoz - 4 hours ago
Patreon wants us to think they're Stripe fees, but they're
not.When I pay $17 for my monthly pledges, that comes out of my
card as one single transaction, with one single $0.30 Stripe per-
transaction fee.Stripe also offers high-volume clients a discount
on the 2.9% rate, which Patreon must be big enough to get.
caseyf - 4 hours ago
> Stripe also offers high-volume clients a discount on the 2.9%
rate, which Patreon must be big enough to get.Yep. They pay
1.9% (source: https://patreon.zendesk.com/hc/en-
us/articles/204606125-How-...)Also, Paypal offers a 5 cents +
5% micropayments rate that they take advantage of.The 35 cents
plus 2.9% is clearly designed to make you think that they are
processing fees and I'd be very surprised if Patreon wasn't
putting at least half of that into their pocket.
jameskegel - 4 hours ago
5 cents and 5% is ridiculous if it is cost-plus, but if it is
indeed a flat rate, considering how small some of these
microtransactions can be, and the overhead involved for a
transaction of any size, it starts to make sense.
GoatOfAplomb - 19 minutes ago
I tried changing a pledge to $0.63 just now, and the web form
said I'd have to make it at least $1.00. So I canceled my
pledge.
ceejayoz - 4 hours ago
I'm fine with them taking 2.9% (although I'm sure their volume lets
them get a discount below that), but $0.35 per PLEDGE is lunacy.
They don't make individual charges for each pledge.
xchip - 3 hours ago
Greedy Patreon.com, I already deleted my account.You need to send
an email to: disable@patreon.com
dawnerd - 1 hours ago
Or just click disable in the dashboard. Pretty easy, actually.
simias - 4 hours ago
I can't really make sense of that article:>That changes on December
18, when patrons will start paying 2.9% plus 35 cents for each
individual pledgeThen:>With this update, creators will now take
home exactly 95% of each pledge with no additional feesSuppose
you're donating $1, the .35 fixed "service fee" alone is 35% of the
pledge, not even counting the 2.9% variable amount. I don't
understand how they end up with the 95% figure.
ceejayoz - 4 hours ago
If someone pledges $1, the pledger gets charged $1.40 (edit:
sorry, $1.38), and the pledgee gets paid $0.95.
simias - 4 hours ago
Mmh, could you "show me your work"? Because I don't see how you
end up with these numbers.2.9% of $1 is $0.029$1 + $0.029 +
$0.35 ~= $1.3895% of $1.38 is $1.311Clearly that doesn't make
sense.Or does it mean that Patreon gets 5% from the creator's
share and then 2.9% + .35 cents on your side? So if I want to
pledge $1 then I have to pay $1.38 and the creator really only
receives $.95? If so that seems misleading. Also in this case
it would mean that in that case Patreon ends up taking 31% of
the actual money spent by the pledger.
ceejayoz - 4 hours ago
The pledge is $1.The pledgee receives 95% of the pledge,
$0.95.The pledger is charged $1 PLUS the "processing fees",
which are an ADDITIONAL 2.9% of the pledge (2.9 cents) and 35
cents fixed.> Also in this case it would mean that in that
case Patreon ends up taking 31% of the actual money spent by
the pledger.Yep, and batching charges means much of that 31%
isn't actually going to real processing fees, but into
Patreon's pocket.Their recent (September) taking of $60M in
VC money may provide a motive for this approach.
trowawee - 4 hours ago
I believe that Patreon's claim is that the bulk of that money
is going to the payment processor, although that argument
falls apart if they are batching your payments (which is what
they currently do).
InclinedPlane - 4 hours ago
Previously: patron pledges $1, patron pays $1, creator ends up
with some amount significantly less than $1, depending on all the
fees.Soon: patron pledges $1, patron pays $1.38, creator ends up
with $0.95.
simias - 4 hours ago
Is it a common scheme? It seems super misleading to do it that
way, why have a percentage fee on both sides? "I pledge $x, I
end up paying more and the creator ends up receiving less".
y4mi - 4 hours ago
i'm not defending patreon here, but it is pretty normal.Even
the state takes both income tax and sales tax.
InclinedPlane - 24 minutes ago
It's uncommon in this context, common in other contexts.
There are lots of things you can buy in retail stores that
might involve fees. You might pay extra for using a credit
card (versus cash) than the stated price to cover the
processing fees. And it's possible that if you're using some
service or intermediary for selling something then they might
take an additional cut as well.
shabble - 4 hours ago
> patron pledges $1, patron pays $1, creator ends up with some
amount significantly less than $1, depending on all the
fees.from [1], the "previous" (current) situation the creator
would receive 85-93% of the amount. So $0.85 from $1, vs .95
from 1.38? Unless I'm completely flobbing the maths, that's
~69% in the new system?[1] https://blog.patreon.com/updating-
patreons-fee-structure/
InclinedPlane - 4 hours ago
The pledge is $1, what the patron pays is different from the
pledge, that's the point. (It's not a good system but I'm not
sure what you're getting hung up on.)
kevin_b_er - 2 hours ago
Let me add a bit of info for you that is the missing piece of
the puzzle:Previously: Patreon made 0.05.Soon: Patreon makes
0.104
siegecraft - 4 hours ago
Did they really just try to define "amount pledged" as different
from "amount the end user actually pays" so they can say "well
now you always get 95% of amount pledged" but, of course, not 95%
of what the user paid. Seems like a bad experience for the user
that wants to pledge X and gets charged X+fees. At least the
people who are getting paid are used to Patreon taking a cut.
whiskeySix - 37 minutes ago
I was sending a favorite podcast of mine (It's Just Banter) $1 a
month. But with a 35 cent fee to send 1 dollar, it seemed crazy, so
i cancelled it. I'll find another way to support TC and Jake.
nemothekid - 4 hours ago
Don?t Visa/MC frown on pushing CC fees on to consumers? And why
now? Is it simply a cash grab or did their payment processor ask
Patreon to change their tune?
neaden - 4 hours ago
It looks like they are charging a flat fee to everyone regardless
of how they pay. I think the CC companies tend to get mad if you
charge a fee to people paying credit at stores where paying by
check or cash is an option. IIRC you can also get around it by
having a cash "discount".
kelnos - 4 hours ago
I believe the general rule is that merchants can't charge
customers more for CC payments than they do for cash payments. I
assume Patreon doesn't take cash payments, so there's no issue
there.
[deleted]
cortesoft - 4 hours ago
That used to be the case, but it certainly isn't anymore. 95%
of gas stations in Los Angeles have a separate, lower, price
per gallon for cash.
floatingatoll - 4 hours ago
Providing discounts for cash, as gas stations do, was legal
prior to 2013 (and remains legal to this day). In 2013,
charging customers a clearly-notified fee for accepting
credit cards was authorized for all merchants; most simply
choose not to.
chimeracoder - 3 hours ago
> In 2013, charging customers a clearly-notified fee for
accepting credit cards was authorized for all merchants;
most simply choose not to.The federal ban on charging fees
was lifted, but many states (including New York and
California) also still outlaw this at the state level.In
addition, merchant agreements often prohibit it - for
example, merchants that take American Express cannot charge
fees for any transactions, even the ones that run on Visa
or Mastercard.
mikeash - 4 hours ago
I believe they frown on advertising different prices for
different methods of payment. If this fee is applied to all
transactions regardless of the payment method used (which appears
to be the case) then the card companies won't care.
zAy0LfpBZLC8mAC - 3 hours ago
In other words: They frown on competing. Who would have
thought?
lathiat - 2 hours ago
Lots of people unsubscribing apparently, screencap:
https://twitter.com/lazygamereviews/status/93884540533643673...
Obi_Juan_Kenobi - 2 hours ago
I just did. I hope others do as well.
gordaco - 1 hours ago
This sucks because I'm tempted to do it as well, but this means
that I can't support the content creators that I like.I really
hope that a better alternative comes soon. I've seen a lot of
people using https://ko-fi.com/ (and I've used it to donate to
them a few times), but it's not exactly the same.
strictnein - 1 hours ago
That sucks. LGR is great.
rb808 - 4 hours ago
I really thought this is a space where crypto currencies should
shine. Is there an established base of people that take a crypto
currency. BTC is no longer useful for this, but something must be.
infecto - 4 hours ago
This is one area where I am interested
in.https://basicattentiontoken.org/This is what you are looking
for. Its built into the Brave browser as well so you can
automatically send tokens every month to the sites and video
creators that you visit.
Mithorium - 4 hours ago
It's a credit card problem, even if the donation is in crypto,
the patrons need to buy that, and unless they're using cash or
direct bank transfer its probably going to be by card.The only
way to lower the fixed fees is to convince people to transact
larger amounts at a time, eg to load a patreon "balance" with $50
that gets deducted from instead of individual transactions of $1
buovjaga - 1 hours ago
Flattr is making the most out of the situation :)
https://blog.flattr.net/2017/12/patreon-fees/
Sir_Cmpwn - 4 hours ago
For those considering an alternative to Patreon, I have a self-
hosted, open source payment platform that takes one-time and
recurring donations via Stripe:https://github.com/sircmpwn/fosspayI
offer this to my supporters in addition to my Patreon
page.https://drewdevault.com/donatehttps://patreon.com/sircmpwn
dba7dba - 3 hours ago
And I wonder what if Stripe just offered this kind of
service?Patreon is just an additional middleman.
[deleted]
JoshTriplett - 4 hours ago
That doesn't provide the benefit of batching, though. (Of course,
now neither does Patreon.)Have you considered putting up a hosted
version that batches Stripe charges?
[deleted]
Sir_Cmpwn - 4 hours ago
I hadn't, no. That sounds like a good idea.
CodesInChaos - 3 hours ago
If you accept money on behalf of creators, you probably need
some kind of financial service provider license.Handling
chargebacks+fees might be a bit annoying as well.
JoshTriplett - 4 hours ago
Please do, and please announce that far and wide. There are
likely many projects that'd like to use it but don't want to
have to host it themselves, and you might want to catch the
pile of current dissatisfied Patreon users.
Paul-ish - 3 hours ago
I wonder if this change has anything to do with the median number
of creators the typical Patreon users supports. A lot of angry
people here sound like power users, but that might not
representative of the overall userbase.
[deleted]
Obi_Juan_Kenobi - 2 hours ago
I just cancelled all my pledges. This is absurd.The whole point of
Patreon was to bundle small charges to avoid these fees, and to
hopefully make support more reliable/consistent for creators. If
they're going to fail outright on the former pledge, then I want
nothing to do with them.I strongly urge others to cancel pledges,
as this is the strongest feedback we can provide. There are many
ways to support creators.
runj__ - 1 hours ago
The really sad part is that they tricked people into potentially
leaving their job and then ripped the carpet out from under
them.I'm really thinking of dropping pledges and simply mail them
some cash but I'm afraid I'd skip the last step and hurt the
creators I love in the end.
ZenoArrow - 10 minutes ago
I dropped my pledges off the back of this news. I was only
supporting one creator, so it wasn't that dramatic. Also, I
left a comment before I cancelled indicating I was only leaving
because of Patreon's business practices, and suggested I'd like
to support the creator again if they open up an account with a
competitor. Liberapay would be my preferred choice but as long
as Patreon get the message and the creators don't have to
suffer, some good can come out of it.
anigbrowl - 4 hours ago
This is why I have been skeptical of Patreon as a revenue source
for working artists. I don't like the whole copyright regime and
would drastically alter it, but the basic idea of a fungible
copyright is a lot more bankable than renting a tin cup from a
monopoly provider. Not hating on Patreon which I admire in general,
but a single provider is undesirable compared to federated
micropayments.
rainbowmverse - 4 hours ago
Duplicate: https://news.ycombinator.com/item?id=15869233Though this
one seems to have gotten more attention.
robryan - 2 hours ago
Why is someone as big as Patreon paying 2.9% + 35 cents? Even
stripe should be able to do better than that?
dawnerd - 1 hours ago
They're not, thats the point. They say in their FAQ their stripe
rate is 1.9%
zAy0LfpBZLC8mAC - 3 hours ago
Oh, closed systems will use their semi-monopoly position to raise
prices? Who would have thought ...
joelthelion - 2 hours ago
Another perfectly good startup killed by the dreams of grandeur of
silicon valley investors.Not everybody company is supposed to be
the next Google, guys.
rinon - 2 hours ago
Great summary of the math from reddit:
https://www.reddit.com/r/patreon/comments/7i2kqd/patreon_wil...
ocdtrekkie - 5 hours ago
Wow. I only have a pile of $1 pledges right now, and this will
significantly increase my bill for almost no gain for the people
I'm supporting.
adjkant - 4 hours ago
Exactly no gain if I'm understanding it.
trowawee - 4 hours ago
Well, the analyses that I'm seeing suggest they'll see about
$0.05 more per pledge. So, not "no gain", but very little gain,
and almost certainly some cost as patrons leave the service
over the price increase.
adjkant - 2 hours ago
Can you detail that math? I've seen math thrown around all
over this thread, much of it contradicting. To me, this seems
completely negative:Before: 7-15% net fees - $100 = $93 or
$85 dollarsNow: 8%+ net fees with near 30% fees for $1 and
10% fees for $10That math is using net fees when considering
the amount the patron pays vs the person gets. Patreon is
pulling some shady math by pretending that the patron isn't
paying the original fees as part of the total amount.To me,
it looks like for nearly all cases, fees are going to
increase. I would revise my statement to "loss, not gain",
even if all patrons stay on the service.
trowawee - 2 hours ago
Sorry, I should have worded that more precisely. I was
basing it on this: https://twitter.com/wombatoverlord/statu
s/938849760198447104 and various pieces I've read by
creators. It looks like creators were averaging around 89%
in net fees previously, where they will now be averaging
95%. So, ~$0.05 more on a $1 pledge.
shabble - 4 hours ago
Wasn't there something recently about Patreon having problems
(legal/regulatory) with the way they were bundling all the
contributions for a user and only submitting a single
card/processor transaction for the total?If so, that might explain
why they want to effectively unbundle everything again, even if it
makes everything worse for everyone.The marketing-weasel language
of their "robust question and answer page"[1] is a little hard to
take regardless of actual reason though.[1]
https://patreon.zendesk.com/hc/en-us/articles/115005631963-W...
walterbell - 4 hours ago
Do you recall which rule/law required unbundling of charges?
cjg_ - 3 hours ago
This is most likely due to EU's new PSD2 regulations (see
https://stripe.com/connect/eu-guide)
gamblor956 - 3 hours ago
If you ride the guide in its entirety (or the text of the
PSD2 at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX...), you would see that one-to-
many transactions are fine under the PSD2 regulations.The
most likely reason for the change in fee structures is that
Patreon simply needs to charge more money.
shabble - 4 hours ago
no, I'm just going from a fairly hazy memory of some article,
so it may not be the case at all.Could also have been something
contractual with the payment processors relating to fraud
detection or prohibited item/services, but it seemed like it
might threaten their current payment setup.I'll see if I can
find anything, but something in the firefox 56-57->52 ESR
downgrade appears to have eaten all of my profile's History,
and I'm not sure I can be bothered rummaging through external
backups :)
gkya - 3 hours ago
Well if that's the case it'd be better for them to say "we do
such and such because law requires us to do so", no?
gamblor956 - 3 hours ago
It's perfectly acceptable from a legal and regulatory standpoint
for a merchant (Patreon) to bundle together several small charges
into a single transaction for efficiency; Apple and Amazon both
do this for digital purchases.The payments to creators are a
separate series of transactions. If using ACH, there should be
minimal fees.On the one hand, Patreon probably needs to charge
more to meet its costs. On the other hand, it's doing so in an
incredibly poorly-conceived and messaged fashion.
NelsonMinar - 3 hours ago
$0.35 fee on a $1 donation is a lot of friction.The $0.35 /
donation fee doesn't make sense to me. It sounds like a credit card
transaction fee. But Patreon charges my CC once a month. So why not
charge me the $0.35 once a month? Why once per donation?The 2.9%
part seems fine to me. So does shifting the costs to the donators.
But why charge me per donation instead of per credit card
transaction?Edit this article has a nice analysis: https://www
.pretty-terrible.com/funny-money-patreon-style/
dtech - 3 hours ago
Exactly. If you support 10 creators they get to keep 90% of the
10x$0.35. The argument that it's for payment processors is utter
bollocks.
jasonlotito - 41 minutes ago
Why do you think it's bollocks? It makes perfect sense. A
transaction fee + % is common with payment processors. Couple
that with new rules coming down the pipeline (as well as common
sense when it comes to processing transactions for other
people), nothing about the pricing is unreasonable. Quite the
opposite, in fact.
Anderkent - 5 minutes ago
They're charging 0.35 for moving some balance from one big
transaction they charged me into accounts of the people I
support. It's basically charging for an atomic move.You seem
to assume that each pledge is a separate transaction. But the
entire advantage of patreon over doing pledges directly is
that all my pledges are one transaction with them, and all
pledges someone receives are one transaction. Sure, charge me
0.35+small % once a month as transaction fee.
gkya - 3 hours ago
I was considering Patreon for some stuff I planned to publish in
somewhat distant future, but now this makes me suspicious. On such
a platform I'd rather want to have numerous people that give me $1
monthly rather that a bunch that pays some three-figure sum, should
I want to live off those pledges. If a $1 pledger decided to not
support me anymore, I wouldn't have lost a big part of my income,
but if instead someone who paid $100 or $200 decided to stop
paying, that'd be a big change. I'd actually prefer to not allow
people pay me more than $10 or 20 to not allow that kind of thing
happen, and to not allow myself to have the illusion thereof.As far
as I understand, this new scheme will punish the kind of pledger
that I said above I'd prefer: who pledges a couple $ or so. If I
want to pledge $10 monthly, I'd better give it to a single creator
than to 5-10 creators. In this case as a potential creator I'd be
happier with a bigger cut from what I receive in expense of free
payments on the patron's side.
lindner - 22 minutes ago
No one has mentioned https://liberapay.com/ ?They seem to deal with
this problem by letting you fund a donation account and then
disburse funds on a periodic basis. This is also similar to donor
advised funds so I'm not sure why Patreon is doing this when other
alternatives are available.
chx - 1 hours ago
Let's run the numbers: https://blog.patreon.com/updating-patreons-
fee-structure/For a $1 pledge: previously creators took home 85c at
least, so Patreon was maxed out at 15c. Now they will charge the
patron 37.9 cents and the creator an additional 5c. So now they are
maxed out at 42.9c. If 15c was enough to break even this means
27.9c of pure profit. That's a _very_ nice profit rate! (The rent
seeking is too damn high.)Let's presume patrons decrease their
patronage so they pay the same as before, so if they paid x before
now they pay 1.029y+0.35=x ==> .97x-0.34. The patron takes home 95%
of this, .92x-0.32 Previously they took home at least .85x. So we
are looking at 0.07x=0.32 ===> 4.57So if you were pledging below
4.5USD (let's be realistic: 5 USD, noone pledges cents, not sure
the platform lets you) and drop your pledge such that Patreon
charges you the same, then this hurts your creator. And many won't
react rationally and do the .97x-0.34 calculation, just cancel
because hot damn, did a company I authorized to charge me X amounts
just unilaterally decided to charge me more without proper clear
notice (I just checked my home page and I do not see a big read
warning this month I will be paying more either on the home page or
the pledges page.)Oh and many creators have various perks at 5USD
which now they need to drop to 4.52 USD (again, does the platform
allow for cents?) and encourage their patrons to drop to that
level. Patrons in this case pay 5 USD still and the creator takes
home 4.29. Previously, the creator took home 4.25-4.65.
ThrustVectoring - 1 hours ago
I cancelled all my pledges over this, it's a huge breach of trust
IMO. I set things up to authorize Patreon to charge me $X per
month. They unilaterally decided to use that authorization to
charge me $X + service fees per month going forward. They announced
this by sending me an email that takes several minutes and multiple
paragraphs for me to understand that the cost to continue my
Patreon subscription would go up next month.I don't give
authorization for recurring charges to companies that unilaterally
decide to foist price increases on me.
egypturnash - 4 hours ago
I'm a creator who uses Patreon. Most of my support is $1 pledges; I
have a couple small pledges I make to other creators, as well.I
heard about this entirely through people talking about it on
Mastodon. Didn't get any email from Patreon about this, not even
lost in my spam folder; the only email I have from Patreon going
back for a while is "hey you got paid", "someone made/changed a
pledge", and "someone commented on one of your posts".I'm not
anyone huge, I make about $800 a month on a really productive
month, and I don't make videos which is sometimes all Patreon seems
to care about - I quit subscribing to their creator newsletter
because it was nothing but chirpy articles on why and how you
should be making video content!!11!! - but I kinda feel like, I
dunno, maybe I should have had, like, some email in my inbox about
this?----I really hope that everyone (including me) is misreading
the detailed explanation of How This New Fee Structure Works,
because it sure does sound like they're going to be imposing a
2.9%+35? transaction fee to every single pledge before they add up
all of the pledges you've made to the dozen creators you might
support on Patreon, instead of after. Which adds up really
quickly.If this is the case, I guess I get to see if being a
Featured Project twice on Kickstarter is going to be of any help in
getting into their new invite-only Patreon-alike d.rip...edit: They
updated the FAQ page on the new fees to address the concerns of the
per-thing creators like me. https://patreon.zendesk.com/hc/en-
us/articles/115005631963>Q: How does this impact me as a per-post
creator?>A: As a per-post creator, your patrons will see the 2.9% +
$0.35 service fee added to all paid posts. For example, if you are
a per post creator making two paid posts per month, your patrons
will be charged 2.9% + $0.35 for each paid post.(Italics mine.)are
they, like, completely unbundling all of their charges from each
other now? Why are we even using Patreon any more if that's the
case?
finkin1 - 2 hours ago
Here's the email I got at 11:23AM this morning:"Dear patron,Your
support is truly changing the lives of creators around the world.
You give creators a reliable paycheck that enables them to do
their best work. Thank you thank you thank you.In order to
continue our mission of funding the creative class, we?re always
looking for ways to do what?s best for our creators. With that,
we?re writing to tell you of a change we?re making so that all
Patreon creators take home exactly 95% of every pledge, with no
additional fees.Aside from Patreon?s existing 5% fee, a creator?s
income on Patreon varies because of processing fees every month.
They can lose anywhere from 7-15% of their earnings to these
fees. This means creators actually take home a lower percentage
of your pledge than you may realize. Our goal is to make
creators? paychecks as predictable as possible, so we?re
restructuring how these fees are paid.Starting December 18th, we
will apply a new service fee of 2.9% + $0.35 that patrons will
pay for each individual pledge. This service fee helps keep
Patreon up and running.We want you to know that we approach every
change with thoughtfulness for creators and patrons. By
standardizing Patreon?s fees, we?re ensuring that creators get
paid to continue creating high quality content. If you have
questions or would like to learn more, please visit our FAQ
here.Sincerely, The Patreon team"
egypturnash - 2 hours ago
thank you <3it's good to see how they're pitching this to the
patrons, I've mostly just seen fellow creators running around
with their hair on fire about this.
ZenoArrow - 36 minutes ago
Would you consider using Liberapay? Would be good to give those
that want to support you a way to do so without having to put up
with Patreon's latest antics:https://liberapay.com/about/faq
egypturnash - 12 minutes ago
I've been looking into it. The front page kinda gives me the
impression that it's only for people doing open-source
projects? I don't feel like sharing all the source files of my
comics.
kevin_b_er - 1 hours ago
I'm guessing they're NOT unbundling their charges. They're just
pocketing a massive fee increase levied on all the patrons of
multiple creators by making it per pledge.
adjkant - 4 hours ago
This should be at the top of HN. A tech company just cut the
livelihoods of artists and many other important groups of people
all over an artificial fee. This is disgusting and I hope a
competitor beats them out ASAP.
Gracana - 2 hours ago
It is both outrageous and unsurprising. This is how these
companies ("tech" startups) are incentivized to operate. It is
awful to watch this cycle happen over and over and over.
[deleted]
revelation - 5 hours ago
Five percent is already ridiculous, this is just getting greedy.You
would think YouTube would finally eat their lunch here but then the
CEO over there can't even update her own recently launched channel
so fat chance.
eropple - 5 hours ago
Five percent is fine for what they're doing (it's not trivial).
But this assessment is pretty messed up.
InclinedPlane - 4 hours ago
The problem is that google (or alphabet) is just catastrophically
bad at most customer relationships (except for ad buyers, though
even then it's iffy). They treat all the content creators on
youtube like users instead of customers. And they don't care
about building a platform, ecosystem, community, etc. that
supports the creators, they're willing to just let things flap in
the wind and hope for the best.
[deleted]
eropple - 5 hours ago
This is pretty crazy of Patreon. I mean - they can easily bundle
pledges on charge. I don't understand why they'd drop a separate
charge for each one, except for "fuck it, they won't care, right?".
Hemospectrum - 5 hours ago
They can bundle the charges to the patrons to reduce cost to
themselves, while still charging fees as if they were making
individual transactions.I?m inclined to believe they?re already
doing this.
eropple - 5 hours ago
Plausible. Shitty, but plausible. If you're right, I'll be
pulling every pledge I have immediately and telling every
campaign that I'll happily return once they leave.I guess I'll
find out next time they run and I can count number of charges.
ocdtrekkie - 4 hours ago
I can confirm my Patreon pledges to multiple people were
charged to PayPal as a single transaction.
eropple - 4 hours ago
Under their new model? I wasn't sure if it's already gone
through.
ocdtrekkie - 4 hours ago
Existing charges. But it's hard to imagine Patreon would
intentionally triple their service fee costs to themselves
by charging pledges individually instead of in aggregate.
The only thing that's changing is the service fees they're
charging users.
eropple - 4 hours ago
It's not hard to imagine if you've ever looked at running
a marketplace. ;) The one reason I'm not throwing stones
yet is that the laws around money transmission are state-
level and very weird and there's the possibility that
they're trying to avoid getting slammed by then. Also,
Stripe might have a beef with their bundling, too.
zkms - 1 hours ago
> I?m inclined to believe they?re already doing this.AFAICT
(from my charges) they have indeed been bundling charges.
Charging the %+constant fee for each patron given that there is
no individual payment-processor action for each patron on the
debit side is absolutely nasty.I'm not asking them to eat
payment-processing fees, I'm not asking them not to make a
profit, I'm simply asking them to not charge for fees for
transactions that never happened.I hope Hatreon (or any other
patreon clone) steals half of their userbase because they
absolutely deserve to be punished and chastised for this
manipulative nonsense (along with their banning legal-but-NSFW
content producers); because nothing else but people exiting
from Patreon will make them feel anything.
eropple - 1 hours ago
Hatreon's a platform designed explicitly and specifically for
white supremacists, so maybe not them.
DuskStar - 50 minutes ago
I think Hatreon was just designed to not censor things. At
the moment that happens to be appealing to white
supremacists and right leaning content creators, but I
wouldn't be too shocked to see NSFW creators moving there
soon.
fluxsauce - 23 minutes ago
Given both the presence of "Hate" in the name of the site
and the fact that it's one of Richard Spencer's revenue
streams, I don't agree with your assessment that it's
temporary and it's oriented towards "not safe for work"
content.Sexual content can be considered NSFW and should
not be conflated with a "safe haven" for hate speech.
eropple - 22 minutes ago
The name is literally Hate-reon, my dude. Its audience is
well-defined.I can definitely see a Patreon alternative
that might do better by folks getting some traction--
Kickstarter as a PBC is interesting, I actually didn't
realize Patreon wasn't. But I know a decent few NSFW
creators and I can't imagine any of them going to where
the Daily Stormer and Richard Spencer gets their
funding.Conflating self-declared Nazis with pornography
is exactly what those Nazis would like people to do.
zkms - 15 minutes ago
Yeah it's marketed explicitly to righties, but if the hard-
right set can make their own patreon clone (with sensical
fee structure); other people can certainly do as well.I
mentioned it not as an endorsement, but as a proof of
concept. Since it exists there's no excuse for other people
being unable to replicate it (without its political
marketing, of course).
thisisit - 4 hours ago
It seems that will depend on their payment processor and the
bargaining power of Patreon. If no processor wants to lower their
charges there is not much Patreon can do. Similarly, if Patreon
are not a big ticket fees generating customer they don't have
much leverage.How to do a profitable micro transaction is still a
mystery.
cortesoft - 4 hours ago
It shouldn't depend on the payment processor; if the credit
card payment is going to Patreon, they can batch up the charges
however they way (e.g. they could batch up all of one
customer's donations for a week to 50 different artists, and
process a single transaction with their payment processor for
the whole amount. They would then only be charged for a single
transaction)
thisisit - 4 hours ago
This is assuming that everyone is paying $1 across 50
different artists.The question here really is - What is the
distribution of backers and payment amount on Patreon?If
majority of their customers are, 1:1 ie one patron to one
artist for $1. Then it is an issue which payment processor
needs to look into.But, if it is 1:50 ie one patron to 50
artists for $1 then I am sure Patreon will be creating a
batch transaction.Patreon's problem surely stems from the
fact that 1:1 is more likely true.
freeone3000 - 2 hours ago
Even if it was 1:1, actually charging the payment
processing fee for the payment processed would be fine. The
person with one pledge for $1 to one creator would be
charged $1.38. The person with one pledge for $100 to one
creator would be charged $103.80. The person with 100
pledges for $1 to 100 creators would be charged $103.80.
Fine. With the rules they're putting into place, the person
with 100 pledges for $1 to 100 creators will be charged
$138.00 - with the other $37 going to Patreon. Not cool.
PeachPlum - 2 hours ago
They should really let me charge up my account by $10 and then
take it out of that until it gets below $1 and do it again etc.
InclinedPlane - 4 hours ago
They already do. I only get one charge on my account for like
half a dozen patreon pledges.
floatingatoll - 4 hours ago
They appear to bundle pledges by the creator's numeric ID, so if
you pledge $1 to 15 creators who signed up today, you'll get
charged one transaction - but if you pledge $1 to 15 creators who
signed up at various times over 3 years, you'll get charged up to
15 transactions. It's incredibly confusing as a customer to see
this occurring, since I ended up at one point where one
transaction contained a single pledge and the second contained
ten of them.
cdancette - 5 hours ago
I think the clearest explanation of the change is in this tweet:
https://twitter.com/TPRJones/status/938646263800705024"The extra
cost isn't tiny if you pledge small amounts to many creators.
Pledging $100 to 1 creator will now cost $103.25 which is
reasonable. Pledging $1 each to 100 creators will now cost $138
which is not reasonable"
cstrat - 16 minutes ago
I previously pledged between $2 and $5 to almost a dozen content
creators. This change would have added quite a bit to my costs so
I have withdrawn my pledges. I am billed by Patreon once a month
- not sure why I need to pay fixed & percentage fees on
individual pledges...
adrr - 2 hours ago
Debit card(Durbin covered banks) interchange is 0.22 fixed fee +
the variable amount. Add on processing fees and its easily
0.30.Visa has a microtransaction(sub $10) framework where you can
roll up 3 auths into one interchange but most processors don't
support it.
andymcsherry - 11 minutes ago
Patreon uses Stripe and Paypal. Both of their fees are 30? +
2.9% regardless of interchange fee for a specific card. Not
sure where they got the extra 5?, but it seems reasonable to
charge what their paying.
detaro - 2 hours ago
Patreon always has been bundling many small transactions into
one large, that has been the major point from a fee perspective
to use them. Their fees already included the processing fees
for that.$0.30 or so per credit card transaction (+ a
percentage) is totally expected and what they did until now.
floatingatoll - 4 hours ago
$138 is unreasonable to me for one simple reason: When I pledge
to 20 creators, Patreon batches my pledges based on arbitrary
server-side criteria, such that they cannot guarantee how many
charges will be made to cover my pledges.So typically I see two
charges per month. They can't charge me $0.35 per charge because
the # of charges varies without any ability for the customer to
predict and cannot be defended reasonably to customers.Instead of
revamping their billing groupings to ensure that each patron is
charged once per month, they are charging $0.35 per creator,
which is the absolute worst case scenario here.So to me, the
ripoff is that they charge me for two credit card transactions,
but instead of $0.35 per transaction, they charge $0.35 per
creator within a single credit transaction - when that $0.35 is
not charged to them by their merchant processor for those
individual creators.I would have been fine if they'd simply tell
me "X creators = Y transactions @ $0.35 each + 2.9% of amount",
where Y is virtually always some tiny fraction of X, but that
they instead say "X creators = X transactions @ $0.35 each + 2.9%
of amount" to avoid regrouping their billing is a misuse of the
word 'transaction' as they implement it.EDIT: If Patreon has been
charging $0.35 per patreon to their creators, then this is not
new profit for them, but is instead the same profit now collected
from patreons instead of creators. It's still unacceptable to me,
because they're charging the worst-case scenario (one
transaction, per patreon, per creator) and then optimizing for
less than that and not crediting the excess (Y-X) x $0.35 back
somehow. If their 5% take isn't enough to cover transaction
costs, hiding a profit in (Y-X) x $0.35 is not the correct way to
solve that.EDIT: It's possible that Patreon was censured by
Stripe somehow and is going to stop batching charges period full
stop come January, and so then Y=X for all cases, at which point
this all starts to make a lot more sense.
cdancette - 4 hours ago
Do you know why they batch the pledges into several payments
and not just one big payment?
huac - 3 hours ago
Money laundering rules
pavel_lishin - 2 hours ago
Can you go into some more depth?
huac - 1 hours ago
https://news.ycombinator.com/item?id=15872128(just a
guess)
PeterisP - 19 minutes ago
Hadn't thought of this reason, but that might make sense
- in essence, the standard AML rules have always required
specifying the final beneficiary of a payment if you pay
money to someone who'll hand it over to them.If Patreon
is being treated as or claiming to be a payment service
provider (i.e. it passes money through to authors without
owning it in between, the only revenue on their balance
sheet is the fee they take) then it'd be wrong to state
that Patreon is the beneficiary of a particular payment,
since it's not; and they'd be required to list all the
actual beneficiaries on every payment, which can't really
be done for reasons, so they need to charge many small
separate payments.On the other hand, if Patreon is being
treated as or claiming to be selling a service (i.e. it
takes all your money, and pays it out to authors as a
business expense) then that has major tax implications,
namely, all the amount (as opposed to just their fees) is
their revenue and thus subject to various sales taxes and
VAT worldwide. This seems to be the current option, since
they're charging VAT on the full amount for EU patrons.It
might be plausible that they're currently switching from
option 2 to option 1 for financial reasons, and this
precludes them from batching in the future.
floatingatoll - 4 hours ago
Like Apple, they break up charges into arbitrary batches on
their side, but I did not ask them to provide guidance on
what their batch limits are. Apple sometimes waits days to
charge me, and often distributes charges randomly across
multiple transactions, so clearly there's some kind of
optimization limit that's reached at scale.
rgbrenner - 4 hours ago
This is a pretty terrible excuse. It amounts to: we're
overcharging you because we're too lazy to change our billing
system.A reasonable change is to make one charge per month for
the total you've pledged. The CC charges for $100 would be
$3.25.No one would object to $3.25 per $100.
floatingatoll - 4 hours ago
I would not call it "lazy" because that's a direct insult to
the human beings, but I have not yet seen a reasonable
defense of why they appear to be charging more than Stripe
charges them, and encourage folks to seek that when asking
Patreon questions about this issue.EDIT: "why they're" ->
"why they appear to be"
rgbrenner - 4 hours ago
Ok, yes that's fair. I shouldn't say lazy.. they could have
an actual reason. but in 15 years of handling cc charges
for my business, I can't think of a single one.
floatingatoll - 4 hours ago
There's a rumor floating around that Stripe has taken
issue with their batching model and that they're being
forced to stop batching, which would absolutely justify
this change since then Y=X, but I've not been able to
find any solid evidence one way or the other about
that.EDIT: I filed a support ticket asking if my 2018-Jan
charges will be batched or not. We'll see.
cjg_ - 3 hours ago
Could be due to the coming EU regulations (PSD2) which
places much stricter regulations around accepting money
on behalf of someone else. See more in
https://stripe.com/connect/eu-guide
trowawee - 4 hours ago
I mean, why wouldn't they say that in the messages
they've distributed to creators and patrons, then? If
that's the case, they have needlessly caused themselves a
tremendous amount of public headache by being
disingenuous about the reason behind the change.
thisisit - 4 hours ago
I wonder if the answer is to have levels within the pledging
system? If you pledge only one backer we take x% or cents. If you
back 2-10, we charge this x-t% or cents. If 100, no charges at
all. This will provide incentive to people to back more creators
too.
mulmen - 2 hours ago
The solution is Patreonpoints. Sell vouchers and let
supporters allocate those vouchers, lock the exchange rate to
the currency used to purchase the vouchers and build the
service fee into that exchange rate.
[deleted]
[deleted]
cmonfeat - 42 minutes ago
This is a much smarter idea, because it also locks their
money into Patreon once they've stocked up on points to
spend. Not sure why they didn't go this route, to be honest.
hidenotslide - 55 minutes ago
That is what Twitch does with "bits", it should definitely
work here as well.