6 ms·

I don't see how a 'wallet' doesn't handle the CUF... Patreon should already have the money in what is basically a pre-paid account. You just have a minimum amou

I don't see how a 'wallet' doesn't handle the CUF... Patreon should already have the money in what is basically a pre-paid account. You just have a minimum amount that can be paid into the wallet. There should also be pay in/out schedules so things are aggregated/automated on both sides. They could even make interest off of the floating money and work a bit like a bank. This should be their bread and butter, optimizing transaction cost. Plenty of other sites do this sort of thing for real businesses, I don't see why it is so complex...

mratzloff 9y ago
It really does seem incredibly straightforward. A patron adds $20 to a wallet and pays a low transaction fee. Can even configure their account to automatically add $20 whenever funds are low. Money stays in Patreon's bank account. Patron can't get their money back once it's in the wallet. Every month Patreon charges a percentage to disburse all money to the creator's bank account. What am I missing?
- radix07 9y ago
  I am guessing they can make more off of an increased number of credit card transactions with some sort of deal with Stripe or whomever. It also allows them to obscure when and how much they are getting paid when it really doesn't need to be that complicated.
- xocyabencl 9y ago
  It's simple to explain in the context of this discussion. But probably doesn't seem as simple to the average user, who wants to donate $1 to a creator, and will feel like some kind of scam is going on if they are asked to add $10 to their Patreon balance first.
  - xocyabencl 9y ago
    Thinking about it some more, Patreon may end up eating the additional fees for the first payment (for CUF posts), increasing their cut a bit on other posts to make up for that, then aggregating the recurring charges.
- simonh 9y ago
  > A patron adds $20 to a wallet and pays a low transaction fee. I wonder if they have problems with anti money laundering regulations? Financial transactions are supposed to clearly indicate the beneficiary. If you're paying into a wallet that gets divvied up later, that's not possible so showing the paper trail of who benefits gets difficult.
  - jdmichal 9y ago
    How do those look now? I imagine the beneficiary of the transaction is clearly Patreon. The fact that they happen to have another transaction that pays money to someone else is fine. I mean, we don't expect to have to write several checks to various patients and families when we give money to St Jude. Or, more interestingly, look at how escrow works in a real estate deal, where the buyer and seller transactions go to the escrow company, which is then responsible for distributing it to the various parties. Now, since it's basically acting as an escrow payment, Patreon might have some laws restricting what it can do with that money while it's holding it. For instance, they likely cannot legally earn interest on that money. Similar to how the security deposit held for a rental cannot yield interest unless that interest is paid to the renter.
- hobarrera 9y ago
  If I want to donate $1 per month to somebody, cashing out $20 in advance is quite a bit -- it'd probably discourage a lot of people, since the initial investment is too much.
  - mratzloff 9y ago
    It was just an example. It could be whatever the user wants to pay; since they're paying the fees for each transaction, it makes sense to keep some money in a wallet.
jdmichal 9y ago
Automated road tolling systems have the exact same economic problems as Patreon. And the pre-charged wallet with $xx minimum fillups is exactly the model they chose. Judging by the longevity of their systems, it seems to work fine.
- chii 9y ago
  you have no choice with road toll. unless you plan on teleporting or walking.
  - amckenna 9y ago
    You could just take a different route
- xfkechyk 9y ago
  as was mentioned below, you don't really have a choice with road tolling systems. i don't like having to pre-load $xx, but it's better then the only alternative. people can stop interacting with Patreon, but you can't really avoid toll roads very easily.
  - james-skemp 9y ago
    At least in the Illinois Tollway you do: pay more by stopping at each toll. That's sort of the same thing here, right? Prefill a wallet and you don't have to pay extra for processing fees (equating to convenience going back to tollways).

mratzloff 9y ago

It really does seem incredibly straightforward. A patron adds $20 to a wallet and pays a low transaction fee. Can even configure their account to automatically add $20 whenever funds are low. Money stays in Patreon's bank account. Patron can't get their money back once it's in the wallet. Every month Patreon charges a percentage to disburse all money to the creator's bank account. What am I missing?

radix07 9y ago
I am guessing they can make more off of an increased number of credit card transactions with some sort of deal with Stripe or whomever. It also allows them to obscure when and how much they are getting paid when it really doesn't need to be that complicated.
xocyabencl 9y ago
It's simple to explain in the context of this discussion. But probably doesn't seem as simple to the average user, who wants to donate $1 to a creator, and will feel like some kind of scam is going on if they are asked to add $10 to their Patreon balance first.
- xocyabencl 9y ago
  Thinking about it some more, Patreon may end up eating the additional fees for the first payment (for CUF posts), increasing their cut a bit on other posts to make up for that, then aggregating the recurring charges.
simonh 9y ago
> A patron adds $20 to a wallet and pays a low transaction fee. I wonder if they have problems with anti money laundering regulations? Financial transactions are supposed to clearly indicate the beneficiary. If you're paying into a wallet that gets divvied up later, that's not possible so showing the paper trail of who benefits gets difficult.
- jdmichal 9y ago
  How do those look now? I imagine the beneficiary of the transaction is clearly Patreon. The fact that they happen to have another transaction that pays money to someone else is fine. I mean, we don't expect to have to write several checks to various patients and families when we give money to St Jude. Or, more interestingly, look at how escrow works in a real estate deal, where the buyer and seller transactions go to the escrow company, which is then responsible for distributing it to the various parties. Now, since it's basically acting as an escrow payment, Patreon might have some laws restricting what it can do with that money while it's holding it. For instance, they likely cannot legally earn interest on that money. Similar to how the security deposit held for a rental cannot yield interest unless that interest is paid to the renter.
hobarrera 9y ago
If I want to donate $1 per month to somebody, cashing out $20 in advance is quite a bit -- it'd probably discourage a lot of people, since the initial investment is too much.
- mratzloff 9y ago
  It was just an example. It could be whatever the user wants to pay; since they're paying the fees for each transaction, it makes sense to keep some money in a wallet.

jdmichal 9y ago

Automated road tolling systems have the exact same economic problems as Patreon. And the pre-charged wallet with $xx minimum fillups is exactly the model they chose. Judging by the longevity of their systems, it seems to work fine.

chii 9y ago
you have no choice with road toll. unless you plan on teleporting or walking.
- amckenna 9y ago
  You could just take a different route
xfkechyk 9y ago
as was mentioned below, you don't really have a choice with road tolling systems. i don't like having to pre-load $xx, but it's better then the only alternative. people can stop interacting with Patreon, but you can't really avoid toll roads very easily.
- james-skemp 9y ago
  At least in the Illinois Tollway you do: pay more by stopping at each toll. That's sort of the same thing here, right? Prefill a wallet and you don't have to pay extra for processing fees (equating to convenience going back to tollways).