Patreon and Q23 switching away from vBulletin


#2023

Assuming you’re funding via a credit or debit card, Paypal charges the payer the standard 2.9% plus 30 cents and the payee gets the full amount. So if you send Tom $10 on Paypal every month, it will cost you $10.59 and he’ll get $10. If you have a Paypal balance already they don’t charge anything at all to move money around inside Paypal.

On Twitch, the streamer gets 1 cent per bit you cheer with, but bits cost you more than that, starting at 1.4 cents per bit and then dropping from there as you buy in bulk to a minimum of 1.23 cents per bit when you kick in $308.

https://twitch.amazon.com/bits

Probably the best choice short of setting up your own payments with Stripe would be Square Cash, which charges zero fees for payments funded via debit card.


#2024

My issue is with the fact that they’re charging patrons a fee per project, instead of a fee per month.

Patreon already lumps together everything into one transaction each month. There’s no reason I can think of other than Patreon profit motives to charge 35 cents 10 times if you back 10 creators for $1 each.

I follow Tom Merritt of Daily Tech News Show and he’s pretty close with the people at Patreon. He’s talking with them directly about these changes and his worry about it severely cutting down on $1 backers.


#2025

Their merchant bank charges 2.9% plus 30 cents (or maybe, 35 cents for some reason) per transaction. That is their literal cost, which they are simply passing along.


#2026

But the merchant doesn’t know if I’m backing 10 projects at $1 each or 1 project at $10. It’s $10 all the same, and should be $10.35 charged to me if they want to pass on the fees directly, not $13.50. Or whatever it comes to with the percentage applied.


#2027

That’s not how it actually works, though. The merchant banks charge a per-transaction fee. Credit cards are typically 2.9% plus 30 cents. Patreon charges your credit card/paypal/whatever as soon as you click the button to subscribe/pay.

Patreon always charged those fees, but previously split it out as a “payment processing fee” which they charged the creator, and then different fees if you used Stripe or Paypal, who also charged a payout fee. Creators always made less money with a ton of small transactions versus a smaller number of larger ones, this just wasn’t exposed to their patrons.

I see your point though, you’re saying they should batch-up all of a user’s patronage to a single transaction to minimize fees. And yeah, that would be a nice innovation. And those fees should definitely be paid by the creator to avoid confusing the patrons.


#2028

The merchant banks do charge a per-transaction fee, but (AFAIK) all of the subscription payments happen at the same time each month. what LMN8R is suggesting is that all of the payments get bundled as one credit card transaction (which if that’s not how it works, Patreon is leaving a lot of money on the table, so it probably does) and the processing fees should be split instead of double- or triple- or whatever-charged depending on how many Patreons you subscribe to.

That said, it’d be annoying accounting for them, and it might be weird for the creators to get different amounts of money from each person depending on how many other things they subscribe to.

edited to add: stusser edited his response maybe five times within the time it took me to type this, so maybe my response is no longer necessary.


#2029

Yes, I have been known to do that.


#2030

My worry is that Patreon has always charged per-project fees as a way to maximize their profits even if they in turn only get charged once per month, and that they don’t want to reduce those profits, leading them to continue doing the same thing now.

If credit card processors are just getting their usual 2.9% + 30 cents on the monthly lumped charges, but Patreon is misrepresenting that as a fee on each individual project someone backs, that seems like a misrepresentation credit card processors wouldn’t be very happy with.


#2031

Well they didn’t come right out and say they were simply passing fees along, did they? Perhaps they’re relying on that ambiguity to balloon their profits.


#2032

Why not do something like Gamers with Jobs does and have a pledge drive once a year? I’d gladly change my pledges to a manual yearly equivalent of what I pay now (or even a bit more) via PayPal or something.


#2033

This is a great idea. They make a big event out of it with prizes and goodies, too, iirc.


#2034

For what it’s worth, GWJ switched to the Patreon model last year and they’ve been much more successful at that. It’s just that once a year they encourage people to join Patreon - even if it’s just for a month - and reward people for that, instead of asking people to donate once per year.


#2035

I was aware, but this last time around they said they’d also accept one-off PayPal donations. I’m just trying to think of what would involve the minimum transaction costs.


#2036

And it happened - here is a part of the email I just got

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.

@tomchick Please - if at all possible, find some other avenue of monthly payment we can use that works.


#2037

Yeah, I got the same email. As for me, I don’t really care what method is used for giving money to sites I support. I like that Patreon is kind of hands-free and just charges my amount on the first of the month. But if Tom prefers another method, I’d be ok with changing.


#2038

Relevant:


#2039

I mind - I just cancelled my pledge to show what I think about pure greed. I’d appreciate some other way to help support Qt3 though.


#2040

So if one’s pledge is $1 per month, it now costs the patron $1.38? And Tom still only gets 95 cents? Am I understanding this correctly?


#2041

Indeed - thats how I understand it.


#2042

There is a Paypal link on the frontpage, if you prefer that. Still has a 2.9% + 30 cent transaction fee, but no 5% cut. You can do a monthly subscription there too.

@Papageno: Yes that’s right. But previously Tom basically ate those costs.