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edschweppeFor the last year and change, I've been using Patreon to support some of my favorite creative types - SFF writers, magazines, and general all-around wonderful people.
Unfortunately, Patreon has arbitrarily decided to change their fee structure - supposedly to improve the creator's revenue stream - but in a remarkably patron-hostile manner.
They just sent me the following email (cut to save one's reading page):
Instead of passing any payment-processing charges on to the creators (who, in the US at least, can deduct said charges as part of the cost of doing business), Patreon is apparently going to charge patrons 2.9% plus $0.35 per pledge. For large pledges, that's not a big deal; for small pledges, though, that's a killer on a percentage basis.
- A $100.00 monthly pledge would cost $103.25 (a 3.25% charge). Not too bad; when local non-profits run fund-raising auctions, they'll often ask folks who pay by credit card to add a 3% "tip" to cover the card processing fees, and most folks are willing to do so once asked.
- A $10.00 monthly pledge would cost $10.64 (a 6.4% charge). That's kind of steep; as I understand it, even Paypal only charges 5%. Most credit-card processors take 3% or less, and debit-card charges are even less.
- But a $1.00 pledge? That's going to run me $1.38 - a 38% markup. Thirty-eight percent. I don't think even the worst of the international money transfer outfits charge that much.
It wouldn't have been that bad if Patreon had decided to charge 2.9% + $0.35 per monthly payment, mind you. That would at least look comparable to their incoming payment processing costs, which I presume are based on a percentage-plus-minimum-fee per payment. As I noted above, most people giving money to support good stuff are cool with a small surcharge to cover unavoidable payment-processor charges. However, charging that flat part per pledge rips off the patrons making $1 and $2 pledges; pure profit for Patreon, not so much for the creators. (Patreon is still taking 5% off the top of what they send to the creators, so that $1 pledge ends up being $0.95 to the creator and $0.43 to Patreon.)
Patreon really botched the rollout on this; all the creators I know are up in arms and many of them are losing patrons right and left. I'm hoping the uproar will result in Patreon reverting to the old fee schedule - or at least switching to a per-payment fee rather than per-pledge - but I'm not going to hold my breath.
Unfortunately, Patreon has arbitrarily decided to change their fee structure - supposedly to improve the creator's revenue stream - but in a remarkably patron-hostile manner.
They just sent me the following email (cut to save one's reading page):
Dear patron,
Your support is truly changing the lives of creators around the world. You give creators a reliable paycheck that enables them to do their best work. Thank you thank you thank you.
In order to continue our mission of funding the creative class, we’re always looking for ways to do what’s best for our creators. With that, we’re writing to tell you of a change we’re making so that all Patreon creators take home exactly 95% of every pledge, with no additional fees.
Aside from Patreon’s existing 5% fee, a creator’s income on Patreon varies because of processing fees every month. They can lose anywhere from 7-15% of their earnings to these fees. This means creators actually take home a lower percentage of your pledge than you may realize. Our goal is to make creators’ paychecks as predictable as possible, so we’re restructuring how these fees are paid.
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.
We want you to know that we approach every change with thoughtfulness for creators and patrons. By standardizing Patreon’s fees, we’re ensuring that creators get paid to continue creating high quality content. If you have questions or would like to learn more, please visit our FAQ here.
Sincerely,
The Patreon team
Instead of passing any payment-processing charges on to the creators (who, in the US at least, can deduct said charges as part of the cost of doing business), Patreon is apparently going to charge patrons 2.9% plus $0.35 per pledge. For large pledges, that's not a big deal; for small pledges, though, that's a killer on a percentage basis.
- A $100.00 monthly pledge would cost $103.25 (a 3.25% charge). Not too bad; when local non-profits run fund-raising auctions, they'll often ask folks who pay by credit card to add a 3% "tip" to cover the card processing fees, and most folks are willing to do so once asked.
- A $10.00 monthly pledge would cost $10.64 (a 6.4% charge). That's kind of steep; as I understand it, even Paypal only charges 5%. Most credit-card processors take 3% or less, and debit-card charges are even less.
- But a $1.00 pledge? That's going to run me $1.38 - a 38% markup. Thirty-eight percent. I don't think even the worst of the international money transfer outfits charge that much.
It wouldn't have been that bad if Patreon had decided to charge 2.9% + $0.35 per monthly payment, mind you. That would at least look comparable to their incoming payment processing costs, which I presume are based on a percentage-plus-minimum-fee per payment. As I noted above, most people giving money to support good stuff are cool with a small surcharge to cover unavoidable payment-processor charges. However, charging that flat part per pledge rips off the patrons making $1 and $2 pledges; pure profit for Patreon, not so much for the creators. (Patreon is still taking 5% off the top of what they send to the creators, so that $1 pledge ends up being $0.95 to the creator and $0.43 to Patreon.)
Patreon really botched the rollout on this; all the creators I know are up in arms and many of them are losing patrons right and left. I'm hoping the uproar will result in Patreon reverting to the old fee schedule - or at least switching to a per-payment fee rather than per-pledge - but I'm not going to hold my breath.
