FA+
Shop
The Real Truth About the Patreon Changes D=
8 years ago
As some of you may have heard, Patreon is implementing changes to its fee structure and a lot of people are upset and angry. I've seen videos by fairly major channels and articles and all kinds of stuff talking about it, and speculating at Patreon's "greed" and so on.
The problem is, there is a fundamental misunderstanding of how Patreon's fees ACTUALLY work (to be fair, a lot of this is because Patreon explains it poorly). Allow me to explain and hopefully this will help clear things up.
It all comes down to the meaning of the word "transaction fees."
See - everyone keeps assuming that the term is referring to the payout fee that creators pay when cashing out their balances (either $0.25 if you use Stripe or 1% if you use Paypal). So, when they hear that, with the new fee structure, patrons are going to be paying 2.9%+$0.35 per pledge, they assume that's what it's referring to.
That is not at all what the transaction fees are. At. All.
"Transaction fees" refer to the fees charged by the vendors processing patron credit cards. Which differ from vendor to vendor, and can range from 2%-10%, depending on the vendor. Note that this is in addition to the 5% cut that Patreon takes (which isn't changing!)
Under the CURRENT system, creators are paying these transaction fees.
That's right, creators. You haven't been taking home $0.95 out of every dollar pledged to you. No, you've only been getting $0.93 - $0.85.
SO. What Patreon's new system does average up the different vendor transaction fees, and split the cost of that among all pledges, and charges the patrons instead of the creators.
Is this the best way Patreon could have handled this? No, probably not - it punishes people who make lots of little pledges instead of one big pledge, and it punishes people who pledge to per-post Patreons. Those are issues that need to be addressed. HOWEVER, it is preferable to the old system, where you'd never really know exactly how much you'd be taking home.
Anyway, I hope this clears things up for everyone. <3
The problem is, there is a fundamental misunderstanding of how Patreon's fees ACTUALLY work (to be fair, a lot of this is because Patreon explains it poorly). Allow me to explain and hopefully this will help clear things up.
It all comes down to the meaning of the word "transaction fees."
See - everyone keeps assuming that the term is referring to the payout fee that creators pay when cashing out their balances (either $0.25 if you use Stripe or 1% if you use Paypal). So, when they hear that, with the new fee structure, patrons are going to be paying 2.9%+$0.35 per pledge, they assume that's what it's referring to.
That is not at all what the transaction fees are. At. All.
"Transaction fees" refer to the fees charged by the vendors processing patron credit cards. Which differ from vendor to vendor, and can range from 2%-10%, depending on the vendor. Note that this is in addition to the 5% cut that Patreon takes (which isn't changing!)
Under the CURRENT system, creators are paying these transaction fees.
That's right, creators. You haven't been taking home $0.95 out of every dollar pledged to you. No, you've only been getting $0.93 - $0.85.
SO. What Patreon's new system does average up the different vendor transaction fees, and split the cost of that among all pledges, and charges the patrons instead of the creators.
Is this the best way Patreon could have handled this? No, probably not - it punishes people who make lots of little pledges instead of one big pledge, and it punishes people who pledge to per-post Patreons. Those are issues that need to be addressed. HOWEVER, it is preferable to the old system, where you'd never really know exactly how much you'd be taking home.
Anyway, I hope this clears things up for everyone. <3
This might be because by law prices shown here have to include tax as well. At anyrate I won't be using patreon anymore. The old method made exact costs. This new method does not, giving room for patreon as a company to strike better deals and effectively earn more over time, which flies in the face of what their saying.
I'm looking forward to future competitors beating the out.
And not just this. But that Patreon charges me my monthly subscriptions once. Make that subject to 2.5%+35 cents. Not each of the 12 $1 pledges! (A difference of almost $4)
Patreon has been selling this as "creators get a flat 95% instead of a fluctuating 85-93%", but in practice, on a dollar pledge, creators will go from getting 85-93% to just 68% (since that 95¢ is coming out of $1.38 instead of just a flat $1). If I'm a patron at that bottom level, I'm paying 38¢ more so that a creator can get an increase of just 2-10¢, with the difference going to Paypal/Stripe. If I'm pledging to 20 different creators at $1 (I'm not, but based on twitter this is a reasonably common use case), I am probably looking for a different way to support people I like now rather than giving payment processors an extra five to seven dollars a month.
(They also want to move to an "anniversary-based" system, where instead of being charged on the first you're charged on the day you pledge and on that same day each following month; this is why they are unbundling pledges.)
Also, you NEVER EVER EVER charge the front-end consumer fees for processing stuff. It's a dumb move.
My issue is that I want people to understand that this is the issue. It's not just "greedy ol' Patreon", but "oh my god Patreon why would you make a boneheaded move this doesn't help"
But, welp!