PSA: Patreon pledgers will pay a processing fee in two weeks.

[Enlit3D]

I know many of you here pledge to various patreons, so here is something that may be very relevant. I am not sure if this the best section for it, but if not, feel free to move the post. See my full post

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.

I received an email earlier from Patreon giving notice that it will change how the process fee is handled.

Basically, the current (old) structure is that whenever you pledge, say, $5 to me, I actually don't receive the full amount. Patreon takes 5% and then there is this processing fee taken by payment processors. So on average, for each dollar pledged to me, I only get around ~88% of that amount.

Now Patreon is changing it's pledge system with the tagline "Creators now take home exactly 95%." That is good news right? Unfortunately the processing fee still needs to be paid by someone, and this time, Patreon decides that patrons (you) will bear the cost.

With the new system, when you pledge, you will pay this extra payment processing fee. This fee is set by Patreon to be 2.9% + $0.35. So for example, when you pledge $5 to me, you will actually pay a bit more than that. In the $5 case, you have to pay $5.495. But on the other hand, I will take home "exactly 95%" of $5, instead of a varying amount due to processing fees.

I have also calculated the extra cost for a couple different pledge amounts:

• $0.379 on $1 pledge
• $0.495 on a $5 pledge
• $0.64 on a $10 pledge
• $0.785 on $15 pledge

 

[The Silver Bard]

I just received the same email and can confirm.The idea of transferring the processing fee to the patron feels a bit odd. I wonder if this will have an impact on $1 supporters where the fee is most significant.

 

[arpaschad]

wow...so we the pledgers are gonna pay more for promises?

wtf is Patreon thinking?

 

[Captainstarfish]

wow...so we the pledgers are gonna pay more for promises?

wtf is Patreon thinking?

"More money."

For as many people who stop pledging because of this change, there are going to be an equal amount of pledges who continue despite the extra fees. Patreon is banking on this, and can even pull the whole 'But guys, this means that the creators you love receive more of your patronage! Yay!'.

 

[arpaschad]

"More money."

For as many people who stop pledging because of this change, there are going to be an equal amount of pledges who continue despite the extra fees. Patreon is banking on this, and can even pull the whole 'But guys, this means that the creators you love receive more of your patronage! Yay!'.

I could only wish...

well I guess this is some form of "accountability" being put into practice and will make those Patreon pages work overtime and provide SOMETHING...

I could only wish...

still confusing why Patreaon decides to implement this...what is the mindset involved in this new processing fee?

 

[The Silver Bard]

Patreon released some additional information today that explains the reasons for this change. It's not super use-friendly, but at least it makes sense.

You must be registered to see the links

 

[BluFalcon]

So am I going to get hit with a processing fee for each pledge I have? Cause I'm pledged to like 5-6 different pages and that could add up quite a bit.

 

[Tyrrandae]

The way I understand it is that this isn't a "new" fee. This fee has always been paid in the past, just as a lump sum from the creator on a percentage of total amount of pledges. And now instead it's being shifted to the patrons to pay the fee based their individual pledge amount, to put more money into the hands of creators. These fees are transaction fees that the merchant typically pays for, each transaction is typically 20 to 40 cents depending. Any business that makes transactions pays this service fee, and consumers end users rarely see this in their purchases, that's why sometimes, though rarely now, you'll find places that don't accept credit card transactions over a certain amount, like say 25$.

As i said these fees are typically paid by the business owner, In the case of Patreon, they are more a flea market, and the individual Creators are the businesses that need to pay the fees.

 

[Monkey Boy]

I don't like this, as we shouldn't be the ones paying the service fees. The creators are the ones using Patreon as a service to make money, not us. We pledge what we want to give, and that should be it. We shouldn't have to pay a fee to donate money. This whole thing is backwards....

 

[Tyrrandae]

Yeah I wasn't saying I agree with the change, I was just explaining what I thought the change was.

To me this basically says one of 2 things. Patreon either doesn't know how to conduct it's business on a large international scale, or Patreon wants more money.

 

[Tyrrandae]

I fully expect a lot of 1$ patrons across the board from dropping their pledges, while people that pledge 15+ won't really care. And in the end we'll prolly see a few small time but decent creators disappear, or the removal of the 1$ pledge option. I personally pledge to like 8 creators 6 of which are 1$ since i like their work that they have done, but not more than that since they haven't put out a lot of content yet. This change will most likely make my drop at least 3 or 4 of them.

 

[censuur]

As usual, it all depends on how you frame the narrative. Essentially this change means that giving 5$ to a Patreon is closer to actually giving them 5$, it spreads the load of processing fees among the many donors rather than frontloading it all onto the creator which is overall a better system (unless you presume malicious intent, which means the donor loses even more) While not an especially significant change (it's generally less than a damn dollar) it does mean that creators with lots of small pledges actually get a significant boost to their income, which I think it generally good news.

 

[Enlit3D]

The way I understand it is that this isn't a "new" fee. This fee has always been paid in the past, just as a lump sum from the creator on a percentage of total amount of pledges.

The processing fee is higher in the new system compared to current. I wrote a post here:

You must be registered to see the links

explaining why.

"Patreon posted a update

You must be registered to see the links

explaining why this is happening: "Right now, we keep those fees as low as we can by charging patrons once every month across multiple pledges — that’s why all charges come on the first day of the month."

Basically what happens is that say if you pledge 1$ to 5 different creators. Instead of there being 5 different transactions, they are bundled together as one $5 transaction. To reduces the times the $0.35 fee are paid from five times to once. Thus, everyone enjoys lower fees."

for example, in the case of one creator, the processing fee went from 4.8% to 8.5%.

 

[Tyrrandae]

The processing fee is higher in the new system compared to current. I wrote a post here:

You must be registered to see the links

explaining why.

"Patreon posted a update

You must be registered to see the links

explaining why this is happening: "Right now, we keep those fees as low as we can by charging patrons once every month across multiple pledges — that’s why all charges come on the first day of the month."

Basically what happens is that say if you pledge 1$ to 5 different creators. Instead of there being 5 different transactions, they are bundled together as one $5 transaction. To reduces the times the $0.35 fee are paid from five times to once. Thus, everyone enjoys lower fees."

for example, in the case of one creator, the processing fee went from 4.8% to 8.5%.

Where did you get your information that they were being bundled together, their e-mail clearly states "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. "

To me this reads as for every individual pledge of 1$ i have i'll be paying ~$1.40 so for my 6 $1 pledges i now pay ~$8.40. I can't or have missed finding a statement by them that claims otherwise. I pledge $1, but actually pay 1.40, my creator gets .95 cents patreon gets .55 cents.

If they are bundling and charging 1 fee for it that's fine, but I am not seeing that stated anywhere. But I am blind, so there is that.

 

[Enlit3D]

They were bundling now, and they wouldn't in the future. Hence higher fees overall.

The information is from patreon statement in the post, with an exact quote.

 

[habisain]

Where did you get your information that they were being bundled together, their e-mail clearly states "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. "

To me this reads as for every individual pledge of 1$ i have i'll be paying ~$1.40 so for my 6 $1 pledges i now pay ~$8.40. I can't or have missed finding a statement by them that claims otherwise. I pledge $1, but actually pay 1.40, my creator gets .95 cents patreon gets .55 cents.

If they are bundling and charging 1 fee for it that's fine, but I am not seeing that stated anywhere. But I am blind, so there is that.

Enlit3D 's example is of the old system that's being replaced. The new system works exactly as you describe, although the distribution of income is wrong; in the $1 example, you pay ~$1.40, the creator gets $0.95, Patreon gets ~$0.05, and the payment processor gets ~$0.35.

I think the main reason Patreon's doing this is so that it's much more transparent about how much money goes to creators. One of the problems with the old system is that the amount of your pledge that goes to the creator is dependent on how many Patreon's you support (i.e. if you support 1 Patreon at $1, you're actually give the creator about $0.60 because of the fees which the creator has to eat. If you're supporting 5 Patreons at $1 each, then each creator gets something like $0.75 - and this is obviously a very counter-intuitive thing; why should the total amount a user pledges to Patreon effect the amount of money each creator gets?). In addition, there's also the more obvious problems of monthly/instant access pledges.

Of course though, the new system is much less efficient because the payment processor fee is triggered once per pledge per month rather than once per user per month. So it's a more transparent and overall sensible system, but also more expensive to run. Hence extra fees.

 

[kiko]

I like the change, maybe some people will think now before they pledge to a scam patreon

 

[Tyrrandae]

Enlit3D 's example is of the old system that's being replaced. The new system works exactly as you describe, although the distribution of income is wrong; in the $1 example, you pay ~$1.40, the creator gets $0.95, Patreon gets ~$0.05, and the payment processor gets ~$0.35.

Yeah this is exactly what I was trying to relay I was just lumping the fees together with patreon as they should be paying for those fees, but yes a typical transaction fee is on average about 30 cents.

I personally think this will drive a few small time creators to lose what little support they have, but are actually making some decent projects

There are Positives and negatives to this change.

 

[YllariusCroceus]

I have to say, at this point I'll probably stop subbing to patreons all together.
I don't make a lot of money, and before I was paying ~30-40$ a month to various creators. Now to pay the same amount I'd have to halve the amount that I sub to, simply to keep that number roughly the same.
The creators eating the fee was, dare I say, acceptable. Even if the total amount could have been more transparent. I honestly believe this will drive off many small-scale subbers, and as a whole decrease the amount that creators get all together, or at best remain the same.

If you look at most creators, the majority of subscriptions are 1-5$ pledges, of which I bet many will cancel their subscriptions, or at the very least sub to less patreons overall.

Before if I subbed to only 3 patreons at 10$ a month, I'd pay 30$ a month, and each creator would get roughly, what? 8$? Now, I'd pay ~40$ a month, and they'd get roughly 9-10$. But to keep my funds in check, I'd have to unsub one, meaning i'm paying ~28-30 and giving 18-20$ as opposed to ~24$. Overall a loss to creators.

The percentage of MY money going to the creators is actually less, because I (And I feel MOST people) will unsub to offset the new costs.

"But Yllarius, why is it acceptable to charge the creator and not the subber?" Because the creator is gaining the money, most creators use the money as supplemental income, supplemental meaning that they do not /need/ the money to live, it simply helps them fuel their work. Thus, money being taking out of their end makes sense, and creators would balance rewards to offset the costs. This money were almost always /tips/. They were given as an act of goodwill to the creators, and rewards were given as favors. This was /extra/ money for them.

Now, many small-time creators, whom I subbed to because I liked the work, but wasn't thoroughly invested (Re:1$ subs) will lose large amounts of money, and only those with excellent work will be left, which greatly saddens me, as many of the smaller works have great potential as the creator gains experience.

Honestly, at this point, I might just drop my subs all together, because (to me) this change is rather unacceptable.

 

[censuur]

Mate it's less than a dollar on a 10$ pledge, not 50% of your pledges -_- the only framework wherein this is significant is for 1$ pledges which are kind of shite anyway since a creator would get roughly half that amount. The result is that even if half the 1$ pledges drop the creators would still get the same amount of money, since they no longer need to pay huge amounts in transaction fees, and costs like these are better off split.