Patreon Admits They Messed Up and Decides Not to Rollout Payment Changes

DooKey

DooKey

[H]F Junkie
Joined
Apr 25, 2001
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Sometimes it really helps to yell, scream, and let companies know they are screwing up. Patreon heard all of those yells and has decided they better find a different way to go when it comes to collecting fees for their service. As of right now they haven't said what they are going to do, but not rolling out their proposed changes from last week is a good place to start.

I know it will take a long time for us to earn back your trust. But we are utterly devoted to your success and to getting you sustainable, reliable income for being a creator. We will work harder than ever to build you tools, functionality, and income, and our team won’t rest until Patreon is making that happen.
 
I killed all of mine which in total was around 30 bucks a month except for my money I give Kyle.

I also the put the reason why I stopped them was because of fees.
 
I bet the damage is already done.

Good news is the free market will take over and a less greedy Patreon will appear.
 
Well damn, as a creator the proposed changes would have indeed increased our cut significantly, but I do understand that it tripled and doubled costs for $1 and $2 patron tiers.
 
Master_shake_ said:
I bet the damage is already done.

Good news is the free market will take over and a less greedy Patreon will appear.
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Kickstarter's Drip is already on the way. I am not sure they are less greedy, but at least there will be competition.
 
Meeho said:
Translation: "we were greedy shitholes and thought we could get away with it but user numbers declined and we were forced to back down for now, but ready your anuses for the next "mistake" ".
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not really, the patreon cut wasn't changing really.
The change was to what subscribers paid, and that's where it went south.
 
MavericK said:
The 2.9% or whatever didn't seem bad (I don't know what the fee was before) but the $0.35 was a kick in the teeth for the many, many $1 subs out there.
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That was stupid on a massive scale to charge people the .35$ . That didn't make a lick of sense to do.

I am quite fine with a ONEtime monthly fee of 2.9% and a ONE TIME MONTHLY fee of .35 cents. It nails you for those creators who get paid by the project than by the month.
 
  • Fundamentally, creators should own the business decisions with their fans, not Patreon. We overstepped our bounds and injected ourselves into that relationship, against our core belief as a business.
I like the humble bundle slider where you get to pick where your money goes. I reallize that business model won't work for Patreon but I was sickened to know that over 1/3 of a $1 was lining their pockets.
They overstepped their bounds all right, in more ways than one. THEY CAN SUCK IT.
 
Kinda figured this would happen. If a dope like me can see charging people for a service they don't need or even want is a bad business model then I knew those guys at Patreon could figure it out. They probably went to college and everything.

In all seriousness, no harm done. Patreon tried to change their fee structure, lot of people raised hell so they reconsidered.
 
Guarana [BAWLS] said:
not really, the patreon cut wasn't changing really.
The change was to what subscribers paid, and that's where it went south.
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38% extra for each $1 donation (which most are) is much higher than 7% (or thereabout) from it. It was about more money.
 
Meeho said:
35% extra for each $1 donation (which most are) is much higher than 5% from it. It was about more money.
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Nope, go re-read the old and (now defunct) new scales:

https://blog.patreon.com/updating-patreons-fee-structure/

Patreon's cut is identical. 5%. The shift is the "hidden fees" bit.

instead of a nebulous 10-20% of the donation being fees being taken out of the artist's cut, the fees were set outside of the 'donation' itself, which is what pissed off people. You'd have to pay 1.38$ to donate 1$ to an artist.

Edit: And if you notice, that fee is almost identical to Square's credit card processing fee.
 
Guarana [BAWLS] said:
Nope, go re-read the old and (now defunct) new scales:

https://blog.patreon.com/updating-patreons-fee-structure/

Patreon's cut is identical. 5%. The shift is the "hidden fees" bit.

instead of a nebulous 10-20% of the donation being fees being taken out of the artist's cut, the fees were set outside of the 'donation' itself, which is what pissed off people. You'd have to pay 1.38$ to donate 1$ to an artist.

Edit: And if you notice, that fee is almost identical to Square's credit card processing fee.
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"Historically, Patreon set a flat 5% fee for our service, with an additional third party processing fee that ranged from 2% – 10%."

7-15% is not almost the same as 38%. It was greed.
 
Meeho said:
"Historically, Patreon set a flat 5% fee for our service, with an additional third party processing fee that ranged from 2% – 10%."

7-15% is not almost the same as 38%. It was greed.
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And I'm betting that for 1$ backers that number was wrong. I challenge you to find any CC company willing to process a card for 10 cents.
 
Guarana [BAWLS] said:
And I'm betting that for 1$ backers that number was wrong. I challenge you to find any CC company willing to process a card for 10 cents.
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At Patreons volume they would be very low.

Even if we are charitable and assume they didn't get anything extra, it would make them incompetent. Either way, they deserve to lose business.
 
I opened a support ticket after the news, and it took some looking around to even figure out how to do that... and complained that the fee is ridiculous for those who give 1$ to various patreons..

Guess enough of us complained.

I was going to cancel my [H] patreon and do a once a year thing or wait for something better to come along. But now I'll just let it be. :)
 
Guarana [BAWLS] said:
And I'm betting that for 1$ backers that number was wrong. I challenge you to find any CC company willing to process a card for 10 cents.
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The one my business uses will process a charge for ten cents and has processed a charge for about 10 cents. The usage fees for having the charge make the transaction a net negative, but it was still a good way to trace that money was properly flowing into and out of the two operating accounts and two trust accounts. The base transaction fee is why many small stores that accept credit cards will insist on only using the for charges of at least $7-$15, so that the $0.25-0.50 base transaction fee doesn't make the sale inherently unprofitable.
 
Meeho said:
At Patreons volume they would be very low.

Even if we are charitable and assume they didn't get anything extra, it would make them incompetent. Either way, they deserve to lose business.
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Yes, and the change is typically in the % of the charge, not on the base fee. That 35 cents is not much of a cost when you're doing most charges of 20$+, but on a 1$ charge, that eats up money, so most companies really DO care about the 35 cents there.

Patreon isn't a very old company still, it's possible that the way things were intended originally isn't how things have grown into being. Rather than tell the artists "you have to completely change how you do all of your stuff" they decided to make what they thought wouldn't be a big deal of a change. They got fuckin' burned for it, and are now rethinking all the things. That seems reasonable to me.

Teenyman45 said:
The one my business uses will process a charge for ten cents and has processed a charge for about 10 cents. The usage fees for having the charge make the transaction a net negative, but it was still a good way to trace that money was properly flowing into and out of the two operating accounts and two trust accounts. The base transaction fee is why many small stores that accept credit cards will insist on only using the for charges of at least $7-$15, so that the $0.25-0.50 base transaction fee doesn't make the sale inherently unprofitable.
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It's not a 'charge' of 10 cents, it's a processor running a card for only 10 cents. That doesn't happen. The 35 cents + 3% is a fairly standard processing fee (Although I am a bit surprised that Patreon doesn't get a lower fee there.)
 
And yet about a year ago, I did swipe a card through the credit card processor with a charge of either ten or twenty cents (I don't feel like digging through the billing folder to check). The de minimis sum went into one of the trust accounts and the appropriate operating account got charged something like 30-40 cents in fees for the transaction. Now if you mean a processor intermediary for one of the big card networks only charging the merchant 10 cents, then that would likely only be given to the largest volume processor.

As far as the 35 cents patron was going to charge, without seeing the agreements with the credit card companies, or the processor intermediaries, we have no real idea what patreon was actually paying and could have been making money off of each pledge.
 
This was just a badly thought out change is all. Its hardly a greed decision. They are still charging the fee... the creators are just going to continue paying it as they always have instead of asking for a fee on top of the donations. Patreon gets paid I know crazy thought... it was just easy to pretend that your entire payment was going to people like Kyle before.

I do believe they made this change in an effort to be more attractive to content creators... more cash in your pocket is good right. They just didn't think that most creators would prefer to cover the fees and get a couple more subs.... at at least offer what you see is what you get when you offer to pay X or Y creator cash.

Its like a donation to red cross or any charity. They could be honest and say hey 10% of your donation is for overhead, so we are just going to tack that on to your donation. People would react with a wtf that's bs... but if you just don't tell them that 1 out of every 10 bucks they pay goes to the administrators its out of sight out of mind, and all is well with the world.
 
Jim Kim said:
  • Fundamentally, creators should own the business decisions with their fans, not Patreon. We overstepped our bounds and injected ourselves into that relationship, against our core belief as a business.
I like the humble bundle slider where you get to pick where your money goes. I reallize that business model won't work for Patreon but I was sickened to know that over 1/3 of a $1 was lining their pockets.
They overstepped their bounds all right, in more ways than one. THEY CAN SUCK IT.
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As a creator I didn't mind. It's the price of doing business on a platform. As an artist it's not uncommon to see 40-50% cost from galleries etc. 33% while not an incredible deal isn't unreasonable. I've always considered it back end cost for doing what I love.
 
As a 1 dollar per creation donator for a particular artist. (Tefler, sci-fi/smut writer) if they said.. Each monthly transaction we process will have a .35$ +2.9% fee, The artist is charged a fee of 5% flat regardless of donation amount of frequency.

It would have read a bit better for me. But for those donating just a buck a month it is still a slap in the proverbial face. A tiered method would work better.

Monthly donation amounts of 1 dollar will see no change to how the donation is made. You pledge a dollar. Processing fees and Patreon's 5% handling fee will be taken out as normal.

2 Dollars - 5 dollars a month. Patreon will charge the pledger a single .20$ fee plus 3% of the donation amount for that month.

Pledge amounts 6+ dollars a month will see a .35$ fee plus 2.9% taken out of their monthly donation totals. This lets us negate the processing cost, your artist gets the full 95% of your donation.

Optional tiers.

If you currently donate more than 10 dollars a month you can opt in to cover all processing fees for your creator. Your processing fee would be .40$ +2.9% and 100% of your monthly donation amount would go to the artist. (minus fees of course.)


Of course we all know that all of the 1 dollar a month people would raise hell because they COULDN'T pay 40 cents plus 2.9% per transaction and make their artist get 100% of the remaining donation.
 
It's just bad business to try tacking fees on the front end of a donation. Much less so when they try this shit with a flat fee per pledge.

I mean if someone is really concerned about a creator's fees they can... pledge more money. Off course that'll raise the creators fees slightly so way to go you evil bastard.
 
Since there's no baseline it's hard to quantify, but basically the entire thing seems like a ridiculous marketing farce to me.

Is everyone paying their $1/month pledge with a credit card?
Are they paying with debit cards?

Give us the statistics for payment method and USD amount paid.


As it stands, the payment fees are of course paid by the buyer, so for each $1 the recipient may only get .60 cents.
The beneficiary doesn't want people to know they are paying such high fees, just like taxes, to keep you in the dark is best for "me."

If 10,000 people donate $1.00 with %40 fees, it's better than 5,000 people donating %1 with %10 fees, so it's a marketing scam.

You're giving more and they're saving money, but the recipients are slimy bastards banking on stupidity.
 
Allow me to edit here.

<strike>You're giving more and they're saving money, but the recipients are slimy bastards banking on stupidity.</strike>

Although your money would give more support and pay less fees, the fund recipients are using marketing tricks, only caring about the money instead of an efficient process or what's fair.

This "fiasco" is a just a marketing opportunity.

It's a dishonest discussion and dishonest portrayal of the payment system.
 
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Bigdady92 said:
That was stupid on a massive scale to charge people the .35$ . That didn't make a lick of sense to do.

I am quite fine with a ONEtime monthly fee of 2.9% and a ONE TIME MONTHLY fee of .35 cents. It nails you for those creators who get paid by the project than by the month.
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Quite obviously you have never dealt with credit card processing. For each attempted transaction made, there is a 35 cent (or whatever rate agreed upon, 20 to 35 cents are typical rates) charge by the credit card company, on top of the % charge. It doesn't even matter if the transaction goes through or not, the merchant gets charged anyways. There is a reason credit card companies are able to offer cashback, and it is due to these fees that are usually invisible to the consumer. Patreon attempted to make these fees visible, but they went the wrong way about doing it.

Meeho said:
38% extra for each $1 donation (which most are) is much higher than 7% (or thereabout) from it. It was about more money.
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No, it isn't. See above.

Meeho said:
"Historically, Patreon set a flat 5% fee for our service, with an additional third party processing fee that ranged from 2% – 10%."

7-15% is not almost the same as 38%. It was greed.
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Processing fee % ranges from 2-10%, on top of a per transaction fee of 20-35 cents.

There is also some BS rule in place that says merchants cannot specifically charge for credit card fees. That's why gas stations with different cash and credit card pricing say that it is a "cash discount" rather than "credit card fee." At our gas station we also do a 50 cent surcharge for credit transactions under $10, excluding gas. There is a reason many places will not accept credit cards under a certain treshold, especially where competition is stiff and margins are small, and the business is small and not easily able to absorb those losses.
 
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Patreon Admits They Messed Up and Decides Not to Rollout Payment Changes!

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Tsumi said:
Processing fee % ranges from 2-10%, on top of a per transaction fee of 20-35 cents.

There is also some BS rule in place that says merchants cannot specifically charge for credit card fees. That's why gas stations with different cash and credit card pricing say that it is a "cash discount" rather than "credit card fee." At our gas station we also do a 50 cent surcharge for credit transactions under $10, excluding gas. There is a reason many places will not accept credit cards under a certain treshold, especially where competition is stiff and margins are small, and the business is small and not easily able to absorb those losses.
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Since we don't know their exact rates, it could've still been a net profit for them. But, even if not, it still leaves us with incompetence. My money is on both.
 
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