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It seems very likely that the change was motivated by payment processor fees. Patreon uses Stripe to process payments, which charges a flat rate of 2.9% + $0.30

It seems very likely that the change was motivated by payment processor fees. Patreon uses Stripe to process payments, which charges a flat rate of 2.9% + $0.30 per successful charge. Compare that to the proposed fee patron fee structure of 2.9% + $0.35 — where presumably the extra $0.05 per transaction is the cut Patreon takes off the top for themselves.

conductr 9y ago
Don't forget it's now 2.9% of $1.37 instead of $1.00. Reducing their piece by another 1 or 2 cents depending on how Stripe rounds
- ceejayoz 9y ago
  Patreon does enough volume to qualify for discounts - their Stripe rate is 1.9%, not 2.9%. (This used to be on https://patreon.zendesk.com/hc/en-us/articles/204606125-How-do-you-calculate-fees- https://patreon.zendesk.com/hc/en-us/articles/204606125-How-..., but it's gone now.)
  - nojvek 9y ago
    Looks like they wanna be nice guys running a marketplace at 5% and claiming to be good guys. And then VC dogs biting them to make fatter profits so they find ticket master like shoddy processing fee scams.
- hutzlibu 9y ago
  minus their likely bargain with Stripe. I doubt they pay as much as a small customer.
  - dawnerd 9y ago
    Weird that they’d even use stripe as they could likely skip the middleman and save more money. Stripe is great for small business. Patreon isn’t that.
    - BillinghamJ 9y ago
      Stripe isn't really a middleman. In fact, as they also handle the acquiring process with efficient high-volume rates, generally fewer parties are involved than normal. Even for very large businesses, actually processing cards directly is pretty difficult and generally not worth doing. Instead you can just get a processor like Stripe or Adyen to give you good rates on an interchange-plus model.
sago 9y ago
> the proposed fee patron fee structure of 2.9% + $0.35 The problem was that was per pledge. So if, like me, you support a couple dozen creators at $1-$3 each, you would expect to pay 24 x $.35. But all those payments are charged in one transaction. So they are only paying $.30. It isn't 5c per transaction they were planning to skim, but $8.
- stormbrew 9y ago
  Part of the change was no longer aggregating the charges but running them through individually. They wouldn't have been pocketing most of the fees. Which honestly makes it even more baffling an idea.
  - deleted 9y ago
    [deleted]
  - nojvek 9y ago
    I believe the idea was to give the money to creators immediately rather than end of month when they charged everyone.
    - stickfigure 9y ago
      ...which is still baffling! The core value of Patreon is microtransaction aggregation. This isn't just "product management screwed up a feature", it's product management doesn't understand their own product at all. Crazy. It's like designing a fancy new electric car but leaving off the wheels.
      - kalleboo 9y ago
        It's like designing an electric car, but requiring you to use a diesel generator to recharge it.
- Pyxl101 9y ago
  You're assuming that Patreon will issue all of those charges at once. However, they talk about that problem in the article. What if a Patreon supporter pledges/makes a subscription on Day 1, then another on Day 2, and a third on Day 3, and so on? In their original blog post [1], they spoke about how, ideally, they'd issue each of those charges to the supporter immediately; and then begin recurring billing 30 days later after that date. However, if those charges are made on different days, and the anniversaries occur on different days going forward, then they don't have the opportunity to condense them into a single transaction. Patreon are looking for a solution where someone can create a subscription, be billed for it immediately (i.e. not wait for beginning of next month), and then continue from there with recurring monthly payments. With a naive system each subscription would have its own cadence, preventing transaction consolidation. They also talk about how, if they have a standard monthly billing period, then there are issues with waiting until the next period to make the first charge. Perhaps they didn't explain this as well as they could have, but it made sense to me. It seems like a "Patreon Wallet" could indeed be a solution to a lot of these problems. Refill your wallet with a single large transaction, then draw funds from it when pledging to support creators. [1] https://blog.patreon.com/updating-patreons-fee-structure/ https://blog.patreon.com/updating-patreons-fee-structure/
dsr_ 9y ago
Whereas Paypal will apparently do 5% and 0.05, which makes the dollar go to $1.10 instead of $1.38.
ceejayoz 9y ago
Patreon's docs until recently noted that they get charged 1.9% by Stripe, so there's more than $0.05 being skimmed there.

conductr 9y ago

Don't forget it's now 2.9% of $1.37 instead of $1.00. Reducing their piece by another 1 or 2 cents depending on how Stripe rounds

ceejayoz 9y ago
Patreon does enough volume to qualify for discounts - their Stripe rate is 1.9%, not 2.9%. (This used to be on https://patreon.zendesk.com/hc/en-us/articles/204606125-How-do-you-calculate-fees- https://patreon.zendesk.com/hc/en-us/articles/204606125-How-..., but it's gone now.)
- nojvek 9y ago
  Looks like they wanna be nice guys running a marketplace at 5% and claiming to be good guys. And then VC dogs biting them to make fatter profits so they find ticket master like shoddy processing fee scams.
hutzlibu 9y ago
minus their likely bargain with Stripe. I doubt they pay as much as a small customer.
- dawnerd 9y ago
  Weird that they’d even use stripe as they could likely skip the middleman and save more money. Stripe is great for small business. Patreon isn’t that.
  - BillinghamJ 9y ago
    Stripe isn't really a middleman. In fact, as they also handle the acquiring process with efficient high-volume rates, generally fewer parties are involved than normal. Even for very large businesses, actually processing cards directly is pretty difficult and generally not worth doing. Instead you can just get a processor like Stripe or Adyen to give you good rates on an interchange-plus model.

sago 9y ago

> the proposed fee patron fee structure of 2.9% + $0.35 The problem was that was per pledge. So if, like me, you support a couple dozen creators at $1-$3 each, you would expect to pay 24 x $.35. But all those payments are charged in one transaction. So they are only paying $.30. It isn't 5c per transaction they were planning to skim, but $8.

stormbrew 9y ago
Part of the change was no longer aggregating the charges but running them through individually. They wouldn't have been pocketing most of the fees. Which honestly makes it even more baffling an idea.
- deleted 9y ago
  [deleted]
- nojvek 9y ago
  I believe the idea was to give the money to creators immediately rather than end of month when they charged everyone.
  - stickfigure 9y ago
    ...which is still baffling! The core value of Patreon is microtransaction aggregation. This isn't just "product management screwed up a feature", it's product management doesn't understand their own product at all. Crazy. It's like designing a fancy new electric car but leaving off the wheels.
    - kalleboo 9y ago
      It's like designing an electric car, but requiring you to use a diesel generator to recharge it.
Pyxl101 9y ago
You're assuming that Patreon will issue all of those charges at once. However, they talk about that problem in the article. What if a Patreon supporter pledges/makes a subscription on Day 1, then another on Day 2, and a third on Day 3, and so on? In their original blog post [1], they spoke about how, ideally, they'd issue each of those charges to the supporter immediately; and then begin recurring billing 30 days later after that date. However, if those charges are made on different days, and the anniversaries occur on different days going forward, then they don't have the opportunity to condense them into a single transaction. Patreon are looking for a solution where someone can create a subscription, be billed for it immediately (i.e. not wait for beginning of next month), and then continue from there with recurring monthly payments. With a naive system each subscription would have its own cadence, preventing transaction consolidation. They also talk about how, if they have a standard monthly billing period, then there are issues with waiting until the next period to make the first charge. Perhaps they didn't explain this as well as they could have, but it made sense to me. It seems like a "Patreon Wallet" could indeed be a solution to a lot of these problems. Refill your wallet with a single large transaction, then draw funds from it when pledging to support creators. [1] https://blog.patreon.com/updating-patreons-fee-structure/ https://blog.patreon.com/updating-patreons-fee-structure/

dsr_ 9y ago

Whereas Paypal will apparently do 5% and 0.05, which makes the dollar go to $1.10 instead of $1.38.

ceejayoz 9y ago

Patreon's docs until recently noted that they get charged 1.9% by Stripe, so there's more than $0.05 being skimmed there.