Patreon’s New Service Fee Spurs Concern That Creators Will Lose Patrons

Discussion in 'HardForum Tech News' started by Megalith, Dec 7, 2017.

  1. Megalith

    Megalith 24-bit/48kHz Staff Member

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    Patreon announced that it would no longer take payment processing fees out of an artist’s monthly funds. Starting December 18th, it will charge those fees to patrons, adding a service fee of 2.9 percent, plus 35 cents on each pledge. The funding platform is presenting this change as a benefit for creators, but many are concerned that these new charges will cause a good portion of their patrons to stop pledging.

    Patreon says the reasoning behind its new policy is to let creators keep a larger cut of each pledge. “With this update, creators will now take home exactly 95% of each pledge with no additional fees,” the company explained on its update page. “In the past, a creator’s income on Patreon varied because of processing fees every month. They could lose anywhere from 7-15% of their earnings to these fees. This means creators actually took home a lower percentage of pledges than their patrons may have realized.”
     
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  2. Twisted Kidney

    Twisted Kidney 2[H]4U

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    The market needs a new service.

    Badly.
     
  3. Space_Ranger

    Space_Ranger Gawd

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    Time for me to schedule a yearly payment from my bank to HardOCP. This way nobody get's Fee'ed up.

    I wonder if I setup a Zelle Repeat Payment, would Kyle accept that as support?
     
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  4. FrgMstr

    FrgMstr Just Plain Mean Staff Member

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    Well, they just shifted the fees from me to you. Their reasoning is asinine at best. If you want to give a dollar, that is all you should give and not have to pay fees on a damn donation.
     
  5. DejaWiz

    DejaWiz Oracle of Unfortunate Truths

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    That's a crock of bubbling bullshit
     
  6. DarthBeavis

    DarthBeavis 2[H]4U

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    Why not have an in-house donation method. Patreon has WAY too many E-Beggars. I will never donate to ANYONE through that service. I did pay for Genmay even with bans LOL . . . .
     
  7. travisty

    travisty Gawd

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    As long as they're up front about the costs and allow the payer to reduce their payment amount to the penny so they can still pay just $1 after fees

    Which won't happen

    DIAF patreon.

    Should have just taken the 5% and been happy with it
     
  8. DarthBeavis

    DarthBeavis 2[H]4U

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    Impeach Patreon? LOL . . . . or MAPA . . . .
     
  9. defaultluser

    defaultluser [H]ardForum Junkie

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    This doesn't look like a serious thing to me for people to bitch about.

    We have always been charged on easy money transfer. Digital payment platforms are NEVER free.


    But as the ratio of patrons-to-creators goes up, the viability of paying a fixed fee for each creator becomes a tough proposition if they still want to make money.

    Most patrons are small payments using credit cards, which adds costs.


    The fee has to be at least as high as the credit card's (usually 1.9% and up), and then they have to add their own fee on top of that. So an extra 1% for them = 2.9% total, and that fixed fee (so they don't lose money on very small purchases).

    This is the same model credit card companies use, but their transaction fees ate 10 cents instead of 35 cents.

    https://www.cardfellow.com/average-fees-for-credit-card-processing/

    You feel like that's too much? The alter your payments to be larger.
     
    Last edited: Dec 7, 2017
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  10. HeadRusch

    HeadRusch [H]ard|Gawd

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    This is like handing a dollar to a Salvation Army stand at the store and them demanding another quarter to complete the transaction......and then Santa asks for a tip.

    A shame, I was just about to donate all this money to HardOCP via Patreon too......*sigh*...oh well, I'm sure the liquor store is still open......
     
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  11. DarthBeavis

    DarthBeavis 2[H]4U

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    Is there a way to PayPal [H] with no fees since you are not buying something? That is what is needed with perhaps a recurring payment option.
     
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  12. TwistedAegis

    TwistedAegis [H]ardForum Junkie

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    I mean, Patreon is paying those fees to the card networks; sending a $1 donation via Visa/MC is a joke, you're literally giving 1/3 of that amount to the card networks.
     
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  13. Dekar12

    Dekar12 Gawd

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    I like how they are so concerned for the creators to get more money... but make sure to say that they are still going to take 5% of the money donated. Plus, charge the donators the 35cents per donation. And recoup their processing fees of 2.9%.....


    If they were so concerned, why not lower your % you are taking from the donated money.
    BS on their PR statement.

    Let the creators decide how they want to handle it, if they like the old way, they can keep it, if they want the new way, they can do it that way.
     
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  14. Kdawg

    Kdawg Gawd

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    I don't think so. Paypal is a fucking bitch too.

    Even if you send money from an existing Paypal balance, I think Paypal still charges their 30cent+2.9% to the recipient, if recipient is a business account. Even if no credit card involved.

    So it cost them jackshit, but they're charging someone anyway.
     
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  15. geok1ng

    geok1ng 2[H]4U

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    if you are unhappy with patreon, kindly point us toward other ways to support HardOCP. I intend to keep my $10 pledge.
     
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  16. SighTurtle

    SighTurtle [H]ard|Gawd

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    I didn't realize Patreon was a non-profit out to simply pass the money between two people.
    I risk sounding like a shrill, but considering the fact if Patreon went belly up, most creators would be up a shit tree called PayPal, I think a bit of leeway needs to be given to Patreon in some fashion. Patreon has their own bills and costs in order to transfer this money between party 1 and party 2 and it's better for them to get more money than for the whole thing to fall apart. Everyone should want Patreon to live on, able to shoulder the cost of running it, with healthy growth money. (Till a healthy competition shows up, then let the worse fall)

    But ya, allowing creators to choose between the old and new cost structures sounds like a decent idea.
     
  17. Tak Ne

    Tak Ne [H]ard|Gawd

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    It seems to me that the payment processors are the real problem here.
    Those kinds of fees made a lot more sense in the past than they do in today's digital world.
     
  18. Mister E

    Mister E ?

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    I’ll keep my pledge as is. I’ve visited the main site and forums for a long time and based numerous purchases and upgrades off the information I get here. Giving up a cheese burger or two each month is a small price to pay.

    Still though, wtf Patreon?!?!
     
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  19. FrgMstr

    FrgMstr Just Plain Mean Staff Member

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    Thanks, glad we are worth at least a buck fifty a month to you.
     
  20. DarthBeavis

    DarthBeavis 2[H]4U

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    Oh yeah they are a HUGE PITA . . . .
     
  21. Kardonxt

    Kardonxt 2[H]4U

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    Their explanation can't be the real reason right? Why couldn't recipients be given the option to take the fees out of the back end at the same rates? Recipients would still be receiving the so "called better rates" and the company would still make the same amount right?
     
  22. DarthBeavis

    DarthBeavis 2[H]4U

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  23. Nallexi

    Nallexi Limp Gawd

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    N

    No, no, don't you see? This is because they want to take less of your money, out of the kindness of their hearts!
     
  24. TwistedAegis

    TwistedAegis [H]ardForum Junkie

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    That story is old though. BofA instituted that fee due to Dodd-Frank Durbin Amendment which tried to lessen the fees the card networks, which the banks thought meant they needed to collect the fees more directly. So checking account fees have risen about 3-5%.

    However, even more dastardly, Visa/MC used to do more variable rates to make smaller purchases more feasible. However, after Durbin, they just charged the max fee for all transactions, even smaller ones, as a nice f-u.

    So ultimately the banks still got paid despite trying otherwise, not so much consumers actually changed things. :/
     
  25. Cyraxx

    Cyraxx 2[H]4U

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    Problem boils down to credit cards. Most people want to donate with credit cards for obvious reasons.... It's easy to use online, but it has transaction fees. Someone has to pay for those, but showing the customer the fees ON TOP of theri donations is simply not smart.... It's also kinda illegal. For example, when you go to the grocery store, you won't EVER see a price tag of $2.99, but a $2.88 price tag for credit card users....

    Either way, incredibly dumb move by Patreon - greedy and money hungry for sure.
     
  26. FrgMstr

    FrgMstr Just Plain Mean Staff Member

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    Yeah, this is the only reason that Patreon exists.
     
  27. MacLeod

    MacLeod [H]ardness Supreme

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    Nobody's saying Patreon can't make a few bucks with their service but charging the people giving away free money is pretty short sighted. Patreon isn't giving us shit. If I cancel Netflix or Amazon Prime, I lose a bunch. If I cancel Patreon, I lose nothing and actually gain a few bucks a month. So making it more expensive for me to GIVE AWAY money to somebody is an incentive for me to NOT give money away anymore.

    Ya gotta think, Patreon is based on free money and offers basically nothing. It takes our money and gives it to a third party and takes a commission for doing so. The 3rd party loses nothing in the transfer because it's money they wouldn't be getting otherwise and it's not money they're giving anything up for like a product. It's a donation, plain and simple. So if I give $3 a month to a site and it gets $2.50 after commissions, that's still a 100% profit for the site. So fees should be on the end of the guy getting the 100% profit and not the people who are paying out of their pockets.

    It's kinda like you wanting to slide a couple bucks to the bum outside the coffee shop but instead you give it to me and I hand it to the bum. Now I turn around and charge you $.50 for handing the money to the bum. How does that make sense? Patreon could "fee" themselves right out of business if they're not careful because like I said, they offer us nothing so making us pay them to offer us nothing is not a business model that will last very long.
     
  28. Supercharged_Z06

    Supercharged_Z06 2[H]4U

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    What bugs me about "services" like this is that they started with good intentions and to make a small profit for their services... much like eBay. But then they get blinded by dollar signs and turn to corporate greed and end up completely wrecking themselves. It shouldn't matter if someone donates $1 or $10, they should be taking the exact same "donation processing fee" out of each and every donation they funnel. Just charge a straight up 40 cents per donation and leave it at that. Would generate PLENTY of cash to keep things running AND make a profit. They don't have to work any harder processing a $1 contribution vs. a $1000 contribution. Hell I bet they even get to skim interest on what they are holding before it is paid out...
     
  29. FrgMstr

    FrgMstr Just Plain Mean Staff Member

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  30. gsilver

    gsilver Gawd

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    This is really stupid. I don't think that I'll change any of my pledges as a result, but there's effectively a 38% fee on every donation that I make now, as I basically give $1 to the various content creators that I like a lot.

    I get the reasoning for *some* fees, but the fees are when they process my credit card, which is one charge a month, not on each and every way it's split.

    Edit:
    My bad. More like 31%.
    Still a lot, though.
     
    Last edited: Dec 7, 2017
  31. Dead Parrot

    Dead Parrot 2[H]4U

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    For those that hadn't yet, now might be a good to to become a [H] subscriber. No Patreon needed. I am sure there is a fee somewhere in the process, but at least it is a one time fee and probably a lot less then 31% of the $15.
     
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  32. Space_Ranger

    Space_Ranger Gawd

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    I agree with this. Add a new Supporter option for $19 a year or something like that (more than the $12 a year) since you are also getting the benefits of GM forums and such. Either that or add a $12 a year option that doesn't offer any upgrades to forum access.
     
  33. Zepher

    Zepher [H]ipster Replacement

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    "In the past, a creator’s income on Patreon varied because of processing fees every month. They could lose anywhere from 7-15% of their earnings to these fees"

    Does this mean that your donation+fees will vary every month? Doesn't make sense to me.

    the receiver should cover the fees and it should be a fixed percentage.
     
  34. Exavior

    Exavior [H]ardForum Junkie

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    You would actually be surprised with how that works. processing fees through some services change. I once talked to somebody that had to write a script that would check between 6 different companies because depending on the day and time of day the rates could be a little different so they wanted to make sure they were sending to the cheapest at that time of day. Normally that would be considered a fucking worthless thing to worry about, but for them what they paid to have 6 different processors and do the lookup saved them money with the large volume of transitions that were ran.




    For those saying that credit card processing isn't free. Everyone knows that. How it worked before was you were set to give $1 (or whatever amount) and they subtracted the fees from that. So instead of the person getting $1 from you they got $1 minus transaction fees. The people sending the money didn't know what was going on. Now they have flipped that around so instead they take that on to the front so you pay $1 + fees in order to give money. I personally think a good middle ground would be like what Extra Life does when you donate. There is a check box for do you want to pay processing fees. That way if you want to be nice and eat the processing fees yourself so that the person you are giving too gets all the money you can do that. If you don't want to pay that amount then you can let that come out of the back side of what you pay.

    I did see a discussion elsewhere that brought up a good point. They should add the extra fee by some other method than per donation as they will only charge your card once and then split up the money. Which I will assume that is how that works and they don't charge your card 10 different times, don't support over 1 person so don't know how that works. So if you give $1 to 10 people you should only be charged the processing fee once. This way you would be charged 10 times and they end up with the other 9 charges as extra money for them. They tried to pass this off as they questioned people and creators were happy with the changes and didn't see any fallout from this. Funny as everyone seems to be screaming out fallout now. So maybe they will change that back to how it was next month.
     
  35. RanceJustice

    RanceJustice [H]ardness Supreme

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    One of the most successful Patreon users in his field- Jeph Jacques (creator of the Questionable Content webcomic; one of the most popular web comics. I have to give the guy props, he's definitely an outlier but he's been working hard at his craft for years and years) wrote a post about this basically slamming Patreon and showcasing that this is a huge moneygrab - https://www.patreon.com/posts/patreon-fee-and-15757911 - Making users pay on EACH fee is far, far worse because Patreon themselves is likely batch processing and therefore cleaning up.
     
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  36. Pringle

    Pringle 2[H]4U

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    Every titty streamer on Twitch seems to have a Patreon
     
  37. Gasaraki_

    Gasaraki_ Gawd

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    I could not have said it better myself.
     
  38. Taldren

    Taldren Gawd

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    0.38 fee on a $1 pledge ... yeah, f*** right off.
    I was a patron of 10 sites at a $1 per month ... not going to do that with a 38% "tax".
     
  39. sfsuphysics

    sfsuphysics I don't get it

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    Wait, so no only does it take a cut of the pledge but it also charges a service fee on top of that? What the fuck does Patreon think it is? Ticketmaster? Transaction fee, Convenience fee, bend over and take it because there's literally no other way to get a ticket fee.
     
  40. ArFLaserBear

    ArFLaserBear n00b

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    I wonder who did all the business decisions when they started up, first they didn't expect the taxes in Europe (they draw taxes additional for creators in EU and so on) now they want to swap around the transaction fees? Did they not count on that? Someone has to pay for the transaction... Or is it more likely that they wanted to try to rake in more money? Witch might work depending on how fast and how much people stop/don't care or if it doesn't pop up a new platform...