Apologies. Will jump over there.
Didn’t see this thread when I searched earlier , then again I was tired.
I think it belongs here, personally, since it is about Patreon’s business model, not qt3 specifically.
I kind of agree that they had to do something to stop the bleeding on processing fees – they were probably eating a huge amount on these small monthly $1 - $5 donations relative to the processing fees incurred on each transaction. But why aren’t they spinning this as “now your $1 monthly donation will automatically become a cool $12 yearly donation?” Surely $1 processed 12 times is a much worse idea than $12 processed one time? And all they need to do to fix that is roll it up, not completely revamp their entire payment scheme. I guess it would kinda suck for the Patreon owner as the money would come in in slower lump sums rather than trickling in constantly each month though?
Furthermore, as others have noted, if a person happens to support multiple patreons that could be bundled into a larger single charge to offset the processing fees, too.
They set expectations poorly when they allowed people to low-ball the pledges this way and effectively ate the processing costs. It became a no win situation for them at that point. Ironically our current banking system kind of screwed them – if the processing fees are that high for small amounts, the system is broken, not Patreon.
In which Armando, who spent two hellish years working for a large credit card processor, agrees wholeheartedly.
If any industry deserves to be burned to the ground and never mourned, it is the credit card processing industry. Bunch of goddamn leeches.
Er wait I saw on another forum, Patreon already does this?
Patreon only changes my card once per month, no matter how many projects i am supporting so why do I need to be charged multiple processing fees? Its a single charge.
And as a previous poster pointed out, Patreon is [already] aggregating these charges into one per patron per month, so the fees should actually be significantly reduced because the number of total transactions is reduced.
Yeah, if that’s the case then it’s just straight-up bullshit.
And please feel free to talk about it in multiple threads, that wasn’t a moderation post just thought you might like to know it’s also being discussed elsewhere.
It’s fine for Tom-specific stuff to be there, as in “what shall I do with my Qt3 patreon, specifically”, but as a general “Why the fuck is Patreon doing this?” I think it’s better here.
I have read a little bit more about this decision and I am still confused, so I don’t envy what Patreon is going through at this point. I am sure they had their reasons, but… this is perplexing as hell.
The only way this decision makes a damn bit of sense, is as a way to (strongly) disincentivize tiny monthly singleton donations. I wonder how many of those there are on Patreon, like what % of the overall base follows that pattern – supporting 1, maybe 2 patreons at a very small dollar amount?
Well, I imagine quite a few! But they still shouldn’t charge that 35 cent portion of the fee, which is clearly supposed to imply a per-transaction credit card processing fee, when they only bill monthly.
I may be misunderstanding, but Patreon charges me once/month because of that, and I assume they give money to creators that way too. If they did that, I’d be okay with it, but they clearly intent to do it for every single “virtual” transaction.
Or am I wrong?
Edit: Oh just saw Wumpus’ quote. So yeah, it’s bullshit on their part, and pure greed.
Aha! Now it makes more sense! This guy (I guess he has a big Patreon, I don’t know) explained it finally:
The problem they have: Patreon charges everyone at the same time, so you don’t get charged right when you sign up. So some people have signed up, gotten their perks, and then cancelled without paying. It also means that tons of people call them saying their charges didn’t go through, or being confused when they get charged two weeks after pledging.
Any normal subscription service charges you the day you sign up and then every month after that on that day.
So they want to fix that, but to do that, they have to have every pledge be a separate charge, which means credit card fees will be outrageous…especially for $1 pledges. Which leads to the problem they’re creating: they need to charge a service fee to offset that new cost to creators (which would be huge) which has led to some patrons freaking out and leaving the platform, and also strongly discourages low-dollar pledges.
Either you keep it as is, with the frustrations and difficulties and BS that they deal with now, or you set it to be a normal subscription service and need to add a fee. Patreon has opted for the second thing, and I have no idea if that’s the right call.
Internally at Patreon, I’m sure they know how annoying and difficult their current problem is, but there’s no way to know how hard this new problem will be. I don’t like the change, but it is not motivated by greed, it’s motivated by a desire to solve a problem.
I /think/ they didn’t [lead by explaining the actual problem they were trying to solve] because their legal department didn’t want it to look like the fees were there to help pay for credit card processing because it is illegal in several states to pass credit card processing fees to consumers. IF YOU WANT AN EXAMPLE OF A VERY BAD LAW
So… people being jerks, plus the actual batching of monthly charges to reduce fees they were already doing was causing customer support problems!
That answer makes a great deal of sense- Patreon should have been transparent about that. Credit card processing fees are one of those things I hear a great deal about at the ‘street level’ of business (i.e. from small business owners and such), but about which I perceive very little awareness from the culture at large (unlike, say, ‘net neutrality’).
I know the Supreme Court’s recent ruling on a related issue was a big win for small New York businesses, though I’m not sure what the ultimate implications are since it was sent back to a lower court to judge on the basis of the regulation of speech rather than conduct (though surely that will result in the law being invalidated? I’m no lawyer).
the Supreme Court decided only that the law regulated their speech rather than their conduct, and it left it to an appeals court to determine whether the law violated the First Amendment.
The case, Expressions Hair Design v. Schneiderman, No. 15-1391, is part of a long-running dispute between some merchants — who want to avoid fees charged by credit card companies by steering customers toward cash — and credit card companies, which seek to make the fees invisible to consumers.
It’s really that last point that I personally find so outrageous. Credit Card companies want to keep the public in the dark on the issue. They didn’t sponsor laws to prevent business from creating surcharges for CC customers, they sponsored laws that gagged business from even mentioning the fees.
I struggle with issue as I prefer a quick swipe to fiddling with bills & change. I’ve never personally needed the other big feature- purchase protection.
It does beg the question, if what they were doing was working, why did they have to change anything at all?
Was the situation life threatening for them as a company, or what? This is a big, dramatic change no matter how you slice it, so it is unlikely they did it without a major internal problem forcing their hand, yes?
There’s some speculation that Patreon is making the change so as to avoid becoming classed as a money services business, which would subject them to additional regulations and increase costs.
Great. Now how can they go about getting the people they lost back to content creators?
I think we’ll see a lot of videos titled “Patreon realized they were wrong and we’re friends again, 'twas but a misunderstanding!” coming up today.
And my guess as to the next version of their payments system? I think they’ll charge patrons a minimum of $21 to deposit 20 Patreon credits, then pay creators from that account. Whenever it runs out, patrons are charged another minimum $21 payment. That’s what I would do.
(Note: 2000 * 1.029 + 0.35 = 2093, so the math works out at $21.)
This whole incident is so bizarre. They really expected no blowback from a massive increase to patron fees? In what world was this considered a good / necessary change to make, and worth the massive risk?
Look at the damage to their brand, even with the mea culpa, no-go after the fact decision…
From everything I saw, they were more concerned about giant creators like Kinda Funny. This is such a negative turn of events that I’m looking at alternatives like Ko-Fi.
Obviously Patreon is in flux. How many people are really going to go back to it after all the negative backlash from the creators themselves?
Aaah. Just no idea.
They sent out an email with a link to quickly get back to their cancelled pledges, making it less of a hassle.