Slashdot Mirror
Patreon Hits Donors With New Fees, Angering Creators (venturebeat.com)
Patreon's changing their fee structure to make donors cover payment-processing fees (standardized to 2.9%) -- plus an additional 35 cents for every pledge. Long-time Slashdot reader NewtonsLaw reports that Patreon's users are furious:
Despite Patreon's hype that this is a good thing for creators, few of these actually seem to agree and there's already a growing backlash on social media... many fear that their net return will be lower because the extra fees levied on patreons are causing them to either reduce the amount they pledge or withdraw completely... For those patrons supporting only a few creators the effect won't be large, but for those who make small donations to many creators this could amount to a hike of almost 40% in the amount charged to their credit cards. Without exception, all the content creators I have spoken to would have:
a) liked to have been consulted first
b) wanted the option to retain the old system where they bear the cost of the fees.
As a content creator, I've already seen quite a few of my patreons reducing their pledge and others canceling their pledges completely -- and I understand why they are doing that.
"Everyone hates Patreon's new fee," writes VentureBeat, adding "Many creators are saying it's unfair for patrons to have to pay transaction fees. In addition to that, most people support multiple creators and not just one, and they'll have to pay the extra fee for each pledge they make."
Tech journalist Bryan Lunduke is already soliciting suggestions on Twitter for an open source or Free Software solution that accepts donations from multiple payment systems, and while the change doesn't go into effect until December 18th, NewtonsLaw writes that "it's starting to look as if many content creators will be getting a slightly larger percentage of a much smaller amount as a result of this lunacy by Patreon -- something that will see them far worse off than the were before."
a) liked to have been consulted first
b) wanted the option to retain the old system where they bear the cost of the fees.
As a content creator, I've already seen quite a few of my patreons reducing their pledge and others canceling their pledges completely -- and I understand why they are doing that.
"Everyone hates Patreon's new fee," writes VentureBeat, adding "Many creators are saying it's unfair for patrons to have to pay transaction fees. In addition to that, most people support multiple creators and not just one, and they'll have to pay the extra fee for each pledge they make."
Tech journalist Bryan Lunduke is already soliciting suggestions on Twitter for an open source or Free Software solution that accepts donations from multiple payment systems, and while the change doesn't go into effect until December 18th, NewtonsLaw writes that "it's starting to look as if many content creators will be getting a slightly larger percentage of a much smaller amount as a result of this lunacy by Patreon -- something that will see them far worse off than the were before."
As a creator with several hundred patrons and about $1500/month in pledges, I had agreed to the terms where I paid the fees. Nobody asked if I wanted to change the deal I had made. I had no problem paying the fees because it kept things simple for my patrons. It almost feels like "I have altered the deal. Pray I do not alter it further."
I'm not a patron or creator on Patreon, but here's what I've been able to piece together from recent news:
The credit card processors charge a swipe fee on the order of 30 cents per transaction in addition to a rake of 2 to 3 percent of the value. For debit cards processed through card-present EFTPOS, only the swipe fee applies, which is part of why stores default to "debit" instead of "credit". But in either case, the swipe fee is why many convenience stores have a minimum charge for small purchases, and Amazon charges sellers a minimum commission of $1 per item.
The use of "de-aggregate" in this Tweet implies that Patreon used to aggregate pledges from multiple donors when charging patrons' credit cards. But there were reportedly a couple abuses of this. One involved people who would pledge to a particular creator, view the creator's patron-only posts, and cancel the pledge the user's before billing date. Another is that a chargeback by a cardmember who doesn't remember his pledges would affect all pledges. So instead, Patreon switched to separately on behalf of each creator.
I can think of a few ways that Patreon could reduce the impact of a swipe fee on $1 and $2 pledges.
Annual billing Let the user pay 12 months of a pledge in advance with one transaction. Print magazines, for instance, have used this for decades. "Reset my billing date" button Reintroduce aggregation as an opt-in choice, where patron-only posts remain locked until a patron submits a form that charges a pro-rated fraction of the existing pledges. Gift cards Let a patron top-up Patreon credit. Prepaid mobile phone providers use this.