[HN Gopher] Patreon cuts deep inside creators' pockets
___________________________________________________________________
Patreon cuts deep inside creators' pockets
Author : solospace
Score : 243 points
Date : 2022-06-18 11:30 UTC (11 hours ago)
(HTM) web link (thoughts.jatan.space)
(TXT) w3m dump (thoughts.jatan.space)
| lazypenguin wrote:
| I never understood Patreon taking a % of money earned from
| creators. Seems unreasonable to me. I use Ko-Fi which has an
| optional "gold tier" with a fixed monthly price for more
| features. It also has an option for you to contribute a % of
| proceeds to Ko-Fi if you want. I happily paid for gold.
|
| https://ko-fi.com/
| [deleted]
| pessimizer wrote:
| Patreon shouldn't even exist. They're here because government(s)
| have failed so badly that they haven't put any effort into the
| infrastructure to trivialize the transfer of its paper between
| the people holding it. It's as useful a function as highways and
| the internet, but government failures (that lobbyists pay
| individuals in government to continue failing at) create room for
| deeply entrenched trusts _paypal_ to be established.
|
| There's no moral amount they should charge imo; it's completely
| arbitrary. If you think it should be less, vote for better
| people, advocate for better things, make crypto that works and
| isn't exclusively an attraction for criminals and rent-seekers,
| or pour money into marketing a competitor. You can switch to
| another service, but I might not want to give your other service
| my card info. Well if your other service takes paypal I'll use
| it, so they'll _start_ 5% behind.
| doliveira wrote:
| Reminds of Brazil's PIX system: free instantaneous P2P money
| transfer, no taxes, requires just a phone number.
|
| Thing is, it requires government regulation.
| nvahalik wrote:
| To be fair there is a lot of non-infrastructure stuff on
| Patreon. They have been successful.
| mertd wrote:
| I don't think Patreon's reason to exist is because "sending
| money p2p is hard".
|
| There is a lot of room for competition though. As a supporter,
| my loyalty is to the creator not to the platform.
| cowtools wrote:
| >I don't think Patreon's reason to exist is because "sending
| money p2p is hard".
|
| Why do you think that? Sending money p2p is hard in a world
| where cryptocurrency is treated like an investment vehicle
| and not a payment system.
|
| >There is a lot of room for competition though. As a
| supporter, my loyalty is to the creator not to the platform.
|
| You don't clearly speak on behalf of most users here. "Using
| multiple platforms" in the fiat/traditional system
| effectively means giving your credit card information to
| multiple businesses and increasing your risk for fraud,
| overcharging and identity theft. It's the reason why these
| intermediaries like PayPal and Patreon operate in the first
| place.
| ketzo wrote:
| This argument totally belies the massive uptick in P2P
| payment usage on Venmo, CashApp, Zelle, etc
| cowtools wrote:
| Those systems are proprietary. Once they scoop up a
| sufficient chunk of market share, they will abuse their
| networking effects to raise their fees and become less
| consumer-friendly. You will forever be stuck in the same
| situation trying to get people to switch to a cheaper,
| more competitive "underdog" system again and again.
| andreyk wrote:
| IMO Patreon exists for creators to create public profile
| pages on which people can subscribe to support the creator
| on a recurring basis in return for some perks. It's (IMO)
| largely succesful on the basis of network effects (once you
| support one creator on Patreon, the friction to support
| another is significantly lower). Plenty of creators also
| have paypal 'tip jars', but I think these are significantly
| less effective at enabling a steady income.
| cowtools wrote:
| I think if we had a competitive, cheap and secure-enough
| micropayments system we could do away with advertisement-
| based monetization altogether. Creators could host their
| own videos, blogs, etc. on their own website and just
| charge a fraction of a cent per pageview or download.
| tootie wrote:
| Apple take 30%. You have to understand that you're not paying
| just for the service, but the reach. You can DIY your donation
| platform and the tech side isn't rocket science, the issue that
| platforms like Patreon and Apple have access to orders of
| magnitude more users than you can ever generate on your own.
| jfengel wrote:
| As a developer I'm terrified of anything that handles payments.
| There are so many ways to do it wrong, and each exposes me or
| my clients to massive losses. Even well funded companies with
| teams for security suffer breaches daily.
|
| I'm happy to outsource anything involving money.
| tootie wrote:
| There's plenty of middle ground. You outsource just they
| payment/donate form and pay a small premium on top of
| merchant fee. You just to do everything on the content and
| marketing side yourself.
| cultofmetatron wrote:
| just use stripe, the fees are small for all the headaches you
| avoid. refunds are easy and can be handled from a dashbaord
| maxshadurskiy wrote:
| Article states the opposite is true. Small creators, do not
| receive decent amount of discoverability on Patreon. I guess
| same true for Apple AppStore.
| sokoloff wrote:
| It's not just (or even primarily) discoverability.
|
| I will _never_ type in my credit card to give some random app
| developer $1.99. I will frequently click buy on an app in the
| App Store.
|
| Same is likely true for Patreon. Even if I found your videos
| or podcast by some other means, the fact you can mention
| "Thank to to my patrons" means I can easily find you (not
| discover you) on Patreon and subscribe.
| maxshadurskiy wrote:
| Let's assume random website use Stripe checkout or PayPal
| to process cards. Will you fell better and safe to type in
| your bank card?
| sokoloff wrote:
| It's about convenience and removing friction more than
| safety/security.
|
| If those are every bit as low friction as the
| alternatives, I'm willing. (But that includes "I heard a
| podcast while I was driving mention patron; I should
| spend 30 seconds and give that creator money." where I
| can find and login to Patreon faster than I can find the
| creator's random website URL.)
|
| For recurring billing, no, I will not give a random
| website my CC near as easily as I will Apple or Patreon
| (or any other platform that stands more to lose by biting
| my hand than an individual site does).
| abnercoimbre wrote:
| I use DonorBox for supporters of my indie conference [0]
| and I have a healthy revenue stream (would be healthier
| if I had a Patreon.)
|
| Is that an OK choice given your preferences? It seems low
| friction, with the caveat that you have to remember my
| random website URL.
|
| [0] https://handmade-seattle.com/donate
| sokoloff wrote:
| I poked at your site's donation functions. For me
| personally, if I was doing a one-time donation, that flow
| seems fine and something that wouldn't block me for a
| one-time.
|
| For a recurring donation, the hover over "A donor account
| is created automatically for recurring donations. Account
| setup info will be emailed to you." would remind me the
| hassle of using a random extra account that I need to
| keep track of, trust that it won't get breached, and be
| able to find and login to when I want to stop the
| recurring donations [and trust that the site will
| actually stop the donations without hassle].
|
| That's going to be enough to block me for recurring (but
| you probably have data on the people it doesn't block,
| meaning people's preferences vary).
| abnercoimbre wrote:
| Thanks for the feedback. Indeed I'm not capturing the
| supporters with your concerns.
|
| With this system I get immediate cash access to a
| donation (recurring or otherwise), and almost everyone
| opts to cover the transaction fee on my behalf. This
| feels less centralized and gimicky than Patreon and I
| like it -- at the cost of losing sokoloff.
| bombcar wrote:
| There's no discoverability anywhere, save if you get into a
| new platform super early. There's just too many things.
|
| Most creators who have "made it" (whatever that may be)
| should work on setting up their own website with their own
| payment processing and encourage fans to use it, less for the
| additional money and more for the security against single-
| income flows.
| kareemsabri wrote:
| I don't think that's true, there's discoverability on
| Spotify. I often get suggested artists or podcasts based on
| what I already listen to, and some of them are very good.
| bombcar wrote:
| But how many of them are _very small_?
|
| It's easy to find "big things" on any platform, the
| question is which are successful for those trying to
| grow?
| Anx2k wrote:
| In the case of Apple you're really paying for access to the
| platform, as you don't have a choice. But in the case of
| Patreon, I don't think they offer anything in terms of reach -
| by this I mean I've never made the decision to support a
| creator because they were on the platform. Typically if I
| decide to support someone, I just go to whatever they point me
| to - and I think this was the authors point (especially for
| very narrow/vertical creators).
|
| A better example of a more 'reach' offering would probably be
| YouTube's similar offering (although I don't know their fee
| structure), which goes beyond just reach and has very low
| friction for creators who make content on that platform.
|
| Honestly I feel like Patreon as a platform is pretty
| underwhelming from the donator side of things, nor do I see
| much in terms of what's changed to improve the experience over
| the years as their fees have increased - but I have no idea
| what has changed on the creator side.
|
| I think the big takeaway (no surprise) is that the creator
| really owns the donator, not the platform - vs someplace like
| Apple where they have a much stronger relationship with the
| customer than your typical app developer does.
| orthoxerox wrote:
| > I mean I've never made the decision to support a creator
| because they were on the platform.
|
| I have. It's nice to have a centralized UI for your donations
| and I would never enter my payment information just to
| support a single creator with a dollar or two.
| tootie wrote:
| I think whenever HN readers deride a product because it
| doesn't suit them, that's not an effective argument. Like do
| you have any idea how strong conversion rates are on email?
| Or even paper mail? Stuff we all hate can be very effective
| at growing an audience. I honestly don't use Patreon at all
| and we rejected it as a platform for content monetization at
| my company, but I can also tell you that our first-party
| approach wasn't exactly a slam dunk.
| bell-cot wrote:
| +1, _BUT_
|
| 's/the reach/the big-name familiarity/'
|
| 's/more users/more legitimacy & perceived security for most
| potential donors/'
| hendrikrassmann wrote:
| I would say it's the other way round. Since creators need an
| income, patreon recieves a huge amount of free advertising from
| small and big influencers/youtubers/etc
| egypturnash wrote:
| I make my living off of Patreon and I can confirm that they do
| jack shit to promote your work unless you are already one of
| their top earners. "Paying for the reach" is a bullshit excuse
| for the amount of money they're sucking off of creators to try
| and make an immense payout for their VC.
|
| My spreadsheet says the total cut of my take that goes to
| Patreon and payment processing is about 10-15%, but I am an
| Early Adopter who gets a much better deal from them. For
| someone like this dude who doesn't have this deal _and_ has
| their usurious international fees on top of it, it's definitely
| a bad choice.
|
| Patreon did one big thing: they took the concept of "monthly
| donations to support the arts" and repackaged it in a way that
| took off. I _never_ got support via the old PayPal donation
| button like I have via Patreon.
| zdragnar wrote:
| > I never got support via the old PayPal donation button like
| I have via Patreon
|
| Sounds like Patreon helped you after all.
|
| I'm not saying that they promote or market you, but having
| the name (much like Apple) seems enough to encourage people
| to pay you.
|
| OTOH, I certainty don't think that their cut sounds like a
| good deal; rather, it sounds more like your options are a bad
| deal or no deal at all.
| iseanstevens wrote:
| Apple also gives a full suite of developer tools,
| documentation, example code. Built in debugging, testing,
| simulation.
|
| If you have a design/image creation software and XCode you
| could make almost any app.
|
| Patreon doesn't give any tools to creators to directly
| create.
| senojsitruc wrote:
| ...that I can use for free to build a Mac app that won't
| run without security warnings, or to test in a simulator
| -- otherwise I have to pay $100/yr. The 30% tax brings no
| value.
| tootie wrote:
| I'm actually just thinking about content. Part of our
| business is podcasts and selling premium subscriptions
| incurs a 30% take and all you get is some consideration
| in placement in Apple Podcasts. And you lose direct
| access to your customers.
| zdragnar wrote:
| Aye, that just further reinforces my last paragraph.
| electroly wrote:
| As a heavy Patreon user (donator side) I don't think this is
| true for Patreon. It may be true for Apple but it isn't true
| for Patreon. They do almost nothing as far as helping the
| creator's reach. The typical funnel is people find creators on
| YouTube first and then look up their Patreon if they want to
| support the channel. The discovery happens on YouTube or
| another platform. It's difficult to find new creators on
| Patreon's website even if that's literally what you want to do;
| I use Google to find the Patreon pages! I doubt that having a
| Patreon has any impact at all on the number of viewers; it's
| just a convenient solution once your viewers have already
| decided to pay you. IMO this should be concerning to Patreon:
| there's no stickiness in their platform; a competitor could
| easily take over, and the creators can easily switch.
|
| On the other hand, switching away from YouTube would be instant
| channel suicide, because they are actually the ones providing
| the reach. I think YouTube must see the existence of Patreon as
| a critical failure. YouTube is doing all the hard work and
| Patreon is getting paid for it!
| noirbot wrote:
| I don't think this is exactly right. As other commenters point
| out, Patreon does nothing to help people find new stuff - what
| Patreon really provides is a sort of escrow service for
| subscriptions and payments. The value they offer me as someone
| who subscribes to things through them is that I know that
| Patreon doesn't really care that much if I decide to stop
| supporting something. My $5/month isn't worth them making it
| hard for me to cancel.
|
| The couple apps and podcasts I've subscribed to that did roll
| their own payments and subscriptions have been hell to cancel
| or adjust my subscription, riddled with dark patterns, and one
| seemingly just... removed the unsubscribe button entirely.
| There was no way to cancel at all.
| onphonenow wrote:
| I have a "subscription" to support a business. You can signup
| on a website but have to reach out to them via email to
| cancel which they only tell you later when you login to try
| and cancel. It's working I'm still subscribed but will get
| into it with them and the retention flow they have
| eventually. With patreon I can click, instead of doing the
| back and forth email thing.
| uptime wrote:
| Yes! I tried to cancel some PRX monthlies and there was no
| way to do it.
| carapace wrote:
| It's not exactly in the same niche, but I like
| https://www.podia.com/ in no small part because they charge a
| flat rate, not percentage.
| shimiya wrote:
| "~14-17%. This is too high for a platform essentially only acting
| as a middle manager for supporting recurring payments."
|
| Patreon is not just asking this fee, because it's middle men for
| recurring payments. If that was the case, you could use Stripe
| for your payment. You could easily cut these fees by providing
| donors a stripe link.
|
| I guess the writer wouldn't do that, because there is value in
| the donation platform.
|
| Argumentation is not grounded.
|
| If we compare the case with Between Epic games and Apple, where
| Apple was forcing high % for literally payments which could be
| done much cheaper at any other payment provider.
| AtNightWeCode wrote:
| Maybe it is true, but I think it is somewhat ok. Patreon has
| enabled business that simply were not there before.
|
| Some of these telemarketing companies that raise money for
| charity takes in the hundreds of percent more of the donations
| than this in fees btw. That something to be outraged about.
| comboy wrote:
| I'm not sure it's that high. They probably have AML regulations
| in multiple countries on their backs, and they are dealing with
| tons of tiny payments not a few big ones. For each tiny payment
| there's some chance of a problem occurring which will require
| support time.
| colechristensen wrote:
| Banks take care of an enormous amount of small transactions on
| credit and debit cards and only charge ~3%, some European
| countries have fees as low as 0.3%.
|
| The high fees of patreon have nothing to do with payment
| support issues.
| comboy wrote:
| Most clients are just marketing.
|
| Banks make money with your money. And 99% of stored money
| comes from 0.1% of their clients.
|
| Leverage coming from fractional-reserve [1] is just a part of
| it but it gives you some idea.
|
| If you mean just credit cards, it's much different scale than
| what we're discussing here and a duopoly which is basically a
| money printing machine. If somebody has any insight how much
| money Visa/Mastercard make from banks and institutions vs
| users I'd love to hear it.
|
| But don't forget that apart from a small percentage which
| goes to CC provider, they also get the most valuable data
| there is about you as a consumer (and more generally about
| all consumers worldwide and trends across multitude of
| dimensions). I'm guessing these companies could easily
| survive just selling the data.
|
| 1. https://en.wikipedia.org/wiki/Fractional-reserve_banking
| SpicyLemonZest wrote:
| At least in the US, banks provide quite a bit less payment
| support. Chargebacks are a big one: with Stripe or something
| similar, you have to manually respond _and_ pay a $20+ fee
| every time someone files a chargeback.
| TedDoesntTalk wrote:
| You don't have to manually respond. But then you lose the
| chargeback dispute by default.
| cuteboy19 wrote:
| In India, the cost of instant payments is exactly zero.
| Additionally, RuPay cards have a Zero MDR which has really
| really made Visa and MasterCard angry
| viraptor wrote:
| So what do you pay with? Your transaction data?
| Subscription to other services?
| cuteboy19 wrote:
| I actually had the privilege of attending a seminar by
| the NCPI guys and someone did ask this question. The
| answer is different for different players in the
| ecosystem. But fundamentally, the actual cost per
| transaction is so low that it really does not matter.
| Visa/MasterCard are rent seeking parasites.
|
| For the apps like GPay and Amazonpay, yes it is data. But
| of course there is the reference implementation app that
| does not do any of that. People just prefer the other
| apps because they offer good cashbacks.
|
| For the banks, it's a service they offer, just like
| having a website and passbook updation. No customer is
| going to go to a bank without a website and now the same
| applies for instant transfer.
| viraptor wrote:
| I hope it works out in the long run. I've seen a version
| of "banks do payments" before and while it started well,
| other banks started doing their own thing with quality
| degrading, and merchants needing to support more options.
| Until we got to the absurdity of "here's a grid of 30
| bank icons, try to find yours"...
| cuteboy19 wrote:
| > "here's a grid of 30 bank icons, try to find yours"...
|
| UPI exists to solve precisely that problem. It forces
| everyone to use a common interface. Customers can use any
| app they want to access the API. They don't depend on the
| bank for anything except the actual Credits and Debits in
| your account.
| ghostly_s wrote:
| This article claims Patreon's true cut is not the advertised
| 8-10%, but *86-83%*?? Surely this can't be true? We would have
| heard more people complaining about it by now.
| i_like_waiting wrote:
| No, creator keeps 86-83%, so ~85c from every dollar
|
| >the real cut for a creator on Patreon is often a stark ~14-17%
| depending on the exact scenario.
|
| edit: now I get it, seems like you are native speaker and me
| and author are not, I guess correct way should be "cut from a
| creator" instead?
| zuminator wrote:
| To my ears just rephrasing it as "Patreon's real cut is..."
| would sound most natural.
| makeitdouble wrote:
| It might have been corrected ?
|
| it currently reads to me as 14~17, which is not great, but not
| that high either depending on the exact case.
|
| > When considering all factors, including standard payout
| processing fees, the real cut for a creator on Patreon is often
| a stark ~14-17% depending on the exact scenario.
| sokoloff wrote:
| If a creator and a platform are splitting a dollar and "the
| real cut for a creator is ~15%", I'd expect that to mean the
| creator gets $0.15 and the platform $0.85.
| makeitdouble wrote:
| Reading your answer I get why the wording is ambiguous. I
| read it as "the real [revenue] cut for a creator", keeping
| the same meaning for "cut" as in the page title.
| sokoloff wrote:
| Exactly. It's cut as a verb (to reduce) versus cut as a
| noun (the share of the total). In this case, I think the
| sentence structure has it as a noun, even if the author
| was thinking of the verb sense of the word.
| egypturnash wrote:
| I am a creator with the early adopter plan and I see about
| 10-15% of every month's gross go to Patreon and payment
| processors.
| david_allison wrote:
| Worked example, numbers from my Patreon, rounded for ease.
| Worst case is 34-41% fees, with around 14-20% from the Patreon
| side.
|
| Let's say I make $25/m from Patreon. I receive 79.18% to 86.12%
| (processing fees, Patreon fee and currency conversion)
|
| Withdrawing every two months via Payoneer ($10 USD fee under
| $500, minimum $50), I would take home $33.06 to $29.59.
|
| Which is 34 to 41% of the total, before tax.
| [deleted]
| [deleted]
| bratwurst3000 wrote:
| I know patreon only because of youtube. Are there many creators
| not connected to youtube on patreon? My impression is if youtube
| would allow donations to creators, patreon would be dead. Am I
| wrong?
| pilgrimfff wrote:
| Diversification - Google will cut you off with no reason or
| recourse.
|
| Better to distribute your earnings on a 3rd party so if you get
| banned from one you still have the other.
| OrvalWintermute wrote:
| Patreon likewise; Patreon censorship is the main reason why
| SubscribeStar exists.
| chokma wrote:
| Royalroad.com also directs a large amount of readers to authors
| publishing advanced chapters of their webnovels on patreon.
| Ekaros wrote:
| They already have superchats and and memberships(paid,
| different from subscribing) on Youtube. These are mostly used
| by streamers. Then again I think you can give superchats on
| premiers. Not sure if you can limit videos to membership only.
| Crosseye_Jack wrote:
| >They already have superchats and and memberships(paid,
| different from subscribing) on Youtube.
|
| And you can have multiple levels od membership.
|
| > I think you can give superchats on premiers
|
| You can if you enable them on your premieres. However a lot
| of creators just publish their videos rather than ran run
| them as premieres. But you can also enable tipping which
| allows viewers to give a one off tip.
|
| > Not sure if you can limit videos to membership only.
|
| You can, you can also limit live streams and playback of past
| live streams to members only. However as not to fragment
| their Patreon supporters, these videos are normally just
| uploaded as unlisted and the link is shared on Pateron.
|
| As for the cut. On Ad's its typically a 60/40 split with YT
| taking the 40%. On Superchats, superstickers, superthanks
| (yt's one off tippings) and memberships its a 70/30 split
| (yt's cut being 30%).
| noirbot wrote:
| Depends on two things - does Youtube give a better cut?
| Presumably they would, but Google doesn't have a good track
| record. Second, do they want to trust Google not to both ban
| their channel _and_ take all their income away.
|
| If you have a YT page, but get your money from Patreon, you
| have a fallback if either of them drops you for whatever
| reason.
|
| That's before you get into podcasts on Patreon, which seems to
| make up a lot of their userbase, if you look at their most
| patronized stuff. There's no particularly good podcast
| monetization platform, rightfully, because of its decentralized
| protocol.
| plorg wrote:
| I know quite a number of podcasters who use Patreon. It ends up
| being pretty convenient, because you can enable a podcast-
| compatible RSS feed that your users can import into their
| podcatcher.
| adamhi wrote:
| I'm not sure how much of Patreon is tied to Youtube.
| Anecdotally, of the ~15 creators I support on that platform, 3
| of them are Youtube channels. The rest are podcasts, web
| comics, and blogs. Non-YT streamers and game developers are
| also a big segment, I believe.
|
| Looking at the top 5 creators on Patreon[1], it seems like two
| of them are primarily Youtube channels. I could be wrong about
| that, but that's what a quick search implies to me.
|
| In other words, it doesn't look like Patreon is exclusively or
| even mainly reliant on Youtube. On the other hand, if Youtube
| was only (let's say) 20% of their revenue, and Youtube went
| away, it could hurt or kill Patreon. So, maybe?
|
| [1] https://backlinko.com/patreon-users#most-popular-creators-
| on...
| bratwurst3000 wrote:
| Thanks. This puts some light into a shadow :)
| tpurves wrote:
| What many people don't realize is that the operational and
| customer service costs of payments don't scale with payment
| amount. Customers will cost almost just as frequently dispute,
| have questions, have problems, ask for help, attempt to defraud
| etc with a $1 transaction as they will a $100 or $1000
| transaction. This is the real killer with micro payment schemes.
| Customer service costs scale more with number of payments than
| payment volume. And these real costs are born by Patreon, by the
| networks and by the banks which is why min txn costs exist. The
| crypto bros totally miss the point in understanding this too.
|
| Source: 25yrs experience building payment networks
| e-clinton wrote:
| The reason to have fees as a percentage vs a flat fee isn't
| because costs scale with payment amounts, it's because it's a
| more fair way to levy fees. I can either charge everyone
| $3/transaction, even if the transaction itself is less than or
| equal to $3, or I can structure it as a percentage to encourage
| smaller transactions. If people think Patreon is making a
| killing with their fee structure, they should build a
| competitor.
| [deleted]
| rag-hav wrote:
| > The crypto bros totally miss the point in understanding this
| too.
|
| I am not sure what you mean by this, but bitcoin transactions
| do have fees which are determined in an open market fashion.
| rglullis wrote:
| > The crypto bros totally miss the point in understanding this
| too.
|
| I don't know which "crypto bros" you've been talking to, but as
| someone who is building a self-hosted payment gateway for
| crypto [0], the benefits from using crypto are two-fold: it
| _eliminates_ the chance of fraud and it moves the cost of
| customer support to the merchant.
|
| Also, once again I will have to repeat that no one sane will
| try to _completely replace_ the existing payment systems with
| crypto. Crypto is meant to be an _alternative_ for the cases
| where the cost of existing processors make the transaction not
| viable.
|
| [0]: https://hub20.io/
| MattRix wrote:
| Doesn't using crypto lead to more fraud, not less?
| rglullis wrote:
| I am talking from the perspective of the _merchant_.
|
| Imagine bogus chargebacks because of buyer's remorse or
| purchases done with stolen credit cards. None of this
| happens for a merchant that accepts crypto.
| gingerlime wrote:
| Or 3DSecure which is becoming very common in Europe. No
| chargebacks.
| rglullis wrote:
| 3Dsecure helps against criminals try to use the card and
| makes it harder for customers flag a transaction if they
| have provided the authorization code. It helps, but does
| not prevent chargebacks. If you are selling digital
| goods, a malicious customer could, e.g, make the payment,
| access the download page of the product and then file a
| chargeback saying the received product does not match
| what was advertised.
| janosdebugs wrote:
| Just because crypto doesn't offer chargebacks doesn't
| mean that the customer is not legally entitled to a
| refund. Depending on the jurisdiction of the merchant and
| the customer there are a number of scenarios where the
| merchant is legally obliged to providing a refund. For
| example, in Germany when a minor makes the purchase, the
| transaction may be invalid and the merchant has to refund
| the money.
| rglullis wrote:
| If a refund is legitimate, the merchant can go on to void
| the purchase and initiate a refund.
|
| The point is not to have a system of final _purchases_ ,
| but final _payments_.
| vorpalhex wrote:
| I sue you. The court demands you appear and return the
| payment. The Merchant says "No! This was crypto! No give
| backsies".
|
| The Merchant will discover that the state does in fact
| have finality on the movement of value.
| rglullis wrote:
| The payment was final. The purchase was not. The refund
| is _another_ payment.
|
| "But the state can still compel you to pay back". Yes,
| sure it does. The point is that the _cost_ of doing it
| now is much higher and it is enough to deter a lot of
| opportunistic, fraudulent behavior from consumers. This
| difference in cost can make or break a business.
| 1270018080 wrote:
| So if you just pretend there's no fraud, then there's no
| fraud?
| rglullis wrote:
| No, what I am saying is that if you reduce the methods
| for fraud, the cost of dealing with it are lower.
| 1270018080 wrote:
| Crypto doesn't reduce the methods for fraud.
| rglullis wrote:
| How can a customer use a stolen credit card to make
| payments with crypto? And how does a customer initiate a
| bogus chargeback on the blockchain?
| karpierz wrote:
| If credentials are stolen, crypto or otherwise, a scammer
| can then use those stolen credentials to make a payment.
|
| All non-reversible transactions do is put the risk of
| fraud on the consumer. IE, if you buy anything with
| crypto and it turns out to be defective, or just not
| arrive, you have no recourse. You're just out the money.
| cowtools wrote:
| >If credentials are stolen, crypto or otherwise, a
| scammer can then use those stolen credentials to make a
| payment.
|
| Crypto credentials are not comparable to bank
| credentials. Crypto credentials are a public key; you
| still need the secret key in order to authorize a
| payment. Credentials are insufficient to make a crypto
| payment.
|
| Bank credentials are usually just open-source information
| that anyone can get a hold of, and they are usually
| sufficient to make a bank payment.
| rglullis wrote:
| > All non-reversible transactions do is put the risk of
| fraud on the consumer.
|
| "And for everything else, there is Mastercard..."
|
| Yes, the risk goes to the customer. But the point here is
| that crypto can enable a whole lot of other businesses
| that don't exist today _because_ of merchant risk.
|
| Patreon "exists", but as TFA shows is stupidly expensive.
| I have a SaaS that I'd like to charge $0,50/per month. I
| can not do that because Stripe would eat 80% of it in
| fees. The minimum payment amount is $5, but from that
| Stripe _still_ gets 9%!
|
| If crypto payments were normalized (and if scaling
| solutions get more adopted to reduce tx fees), customers
| would think "well, if fifty-cent service is a scammer, it
| will be on reddit already. If it is not, then it is only
| fifty cents and I can get a lot of karma for it"
| munificent wrote:
| _> it eliminates the chance of fraud_
|
| Declaring a priori that all transactions are legitimate
| doesn't eliminate fraud, it just eliminates the system's
| ability to handle it. Actual humans can still get victimized.
| The gateway just says "Lalala can't hear you not my problem."
|
| _> and it moves the cost of customer support to the
| merchant._
|
| Likewise, it moves the consequences of fraud onto the victim.
|
| _> for the cases where the cost of existing processors make
| the transaction not viable._
|
| I assume you realize what _kind_ of transactions end up being
| nonviable for existing processors that do have fraud
| prevention, money laundering safeguards.
|
| Your site says:
|
| _> When you receive a payment, the money is yours. No hold-
| out periods, no chargebacks, no forced refunds._
|
| Read that from the perspective of a bad actor. That's exactly
| the kind of payment gateway they would want. No way for a
| victim to seek redress once they've sent their money. You
| seem to be targeting merchants that:
|
| 1. Don't want customers to be able to seek any redress when
| fraud occurs.
|
| 2. Are willing to deal with the overhead of customer support
| in order to get 1.
|
| Hell, your site actually _advertises "No KYC" as a feature!_
| OK, so, yes, you do seem to be deliberately building a system
| targeting ransomware, drugs, scams, and money-laundering.
| rglullis wrote:
| You are thinking only from the side of a customer, who
| already has it easy with the existing payment networks.
|
| If you are a customer that wants to make a transaction that
| can be reversed, you go for the credit card. If the value
| of the transaction is not high enough for you to care
| (micropayments) or if you rather lose some money but not
| give away your data, you go for crypto.
|
| The problem that crypto can solve is for the _merchants_ ,
| like TFA. Patreon charges absurd rates because _payers_ are
| problematic.
|
| (Edit: once again, the anti-crypto crowd decides to
| downvote reflexively and ignore everyone that brings
| legitimate use cases. Why is it so hard to _at the very
| least_ consider the point that others are trying to make?)
| ribosometronome wrote:
| >You are thinking only from the side of a customer, who
| already has it easy with the existing payment networks.
|
| And you're pretending the customer doesn't exist by
| saying that crypto eliminates the chance for fraud.
| That's clearly a lie.
| rglullis wrote:
| Do us a favor: instead of nitpicking to attack something
| that I never said, please consider the best possible
| interpretation of an argument.
|
| When I say about eliminating fraud, I mean fraudulent
| _payments_. What happens after the transaction is a
| separate problem, and not one that is meant (or possible)
| to be solved by crypto.
|
| If you _as a customer_ want more safeguards, then of
| course it is not recommended and you should use other
| _alternatives_.
| npc12345 wrote:
| Try zelleing a scammer, call the bank, then get back to us
| buddy.
| CJefferson wrote:
| You can still have fraud, can't you still get sued to return
| someone's tokens?
| gruez wrote:
| I doubt the kind of person who's initiating chargebacks on
| patreon donations is going to go to small claims court to
| claw back their $10 donation.
| mgraczyk wrote:
| As somebody who also built a crypto startup that facilitated
| payments (opentoken.com), crypto does not eliminate fraud.
| Merchants want fraud protection, they don't know how to
| handle it and aren't interested in taking on that business.
| You will end up either handling fraud in the payment layer,
| or your merchants will find somebody who will.
| [deleted]
| rollcat wrote:
| > Crypto is meant to be an alternative for the cases where
| the cost of existing processors make the transaction not
| viable.
|
| Allow me to quote myself: using proof of work in place of CC
| processor fees is just moving the problem around - and
| arguably, making it worse: you're essentially taking on
| environmental debt, which all of us will eventually have to
| pay down.
| rglullis wrote:
| Ethereum is moving to PoS in less than two months. Can we
| please drop this BS excuse of an argument?
|
| (Before you reply with the usual "Ethereum devs have been
| promising PoS for years" line, I will tell you this: I
| pledge to drop all work on Hub20 if Ethereum doesn't
| complete the transition by the end of the year.)
| lalopalota wrote:
| How is this a "BS excuse of an argument"? Is proof of
| work being used?? Hmmm, yes it is. Thus, the argument
| stands.
| rglullis wrote:
| > Is proof of work being used?
|
| Not for all blockchains. If that is the point of
| contention in regards to crypto, then just look at the
| many other blockchains that do not use PoW.
| jasonlotito wrote:
| The belief that crypto eliminates fraud is pure myth. It
| dramatically increase the chance of fraud for customers, and
| for honest merchants, there is still a risk of fraud.
| cowtools wrote:
| If it's a micro-payment system then fraud doesn't really matter
| because the risk per transaction is low. In an ideal crypto
| payment system there's no double spending and no charge-backs.
| The only cost in cryptocurrency is per-transaction fees due to
| limited network bandwidth (which can somewhat be mitigated with
| multisig setups).
| deanCommie wrote:
| Patreon is also more than a payment processor.
|
| OP even calls this out - they like having different membership
| tiers. They're a content host for exclusive images. (Videos do
| tend to be offsite as unlisted Youtube videos)
| cowtools wrote:
| So they also provide a service that imgur, catbox.moe, google
| drive, and others do for free?
| finfinfin wrote:
| Yes. Creators should upload content to Imgur and ask
| supporters to pay them directly through PayPal. That's a
| fantastic alternative to Patreon.
| onlyrealcuzzo wrote:
| Charge backs should also be less of an issue if the purchase is
| $1. Same with fraud.
|
| The stakes are lower the lower the amount. Who cares?
|
| It's not worth disputing. Fire the customer if it crosses a
| threshold.
| JumpCrisscross wrote:
| > _stakes are lower the lower the amount. Who cares?_
|
| OP mentioned customer service. Pretty much any American can
| create 50+ hours of customer support and legal work for no
| reason at all in payments. Even an irate, clueless customer
| will waste an hour of your support staffs' time.
| maccard wrote:
| This is a very naive view. Stripe have an excellent page [0]
| on why this doesn't work. The short summary is that each
| chargeback will cost you $15 (plus returning the
| transaction), and if you have more than 100 fraudulent
| transactions in a month you get put on a monitoring list and
| if you don't bring the number down your account will be
| suspended. The stakes are very high for the person accepting
| a merchant agreement with Visa and MasterCard.
|
| [0] https://stripe.com/docs/disputes/monitoring-programs
| brendanyounger wrote:
| Having run a B2C business with recurring monthly payments
| around $15, I assure you that fraud goes UP with lower
| payment amounts. You preferentially attract the worst
| possible customers who bank with the lowest common
| denominator banks and they charge back like crazy.
|
| Some choice moments: "Please keep my service on, I only
| charged back because I needed to make rent this month", "I
| know that wasn't my card, but that b---- owes me money."
|
| And it's hard to fire these customers because they come back
| with a different card and fake names. They don't care that
| they're committing fraud; no one will prosecute them for $10
| here, $20 there.
|
| The real promise of crypto is to provide a system with 0% low
| level fraud like this.
| omegalulw wrote:
| And these systems exist because sellers do fraud too,
| merchants that don't ship after taking payment, etc. With
| irreversible payments through crypto you are just pushing
| all the risk on customers. That will never fly.
| rglullis wrote:
| If the customer does not trust the merchant, they simply
| don't make the payment with _crypto_.
|
| Why, oh why is it so hard to understand the concept of
| _multiple alternatives_?
| bryanlarsen wrote:
| Every retailer with a median transaction size under $20
| hates credit cards. Yet with rare exception they all take
| cards.
|
| The customer chooses the mechanism, not the merchant. To
| best credit cards you'll have to be more customer
| friendly.
| rglullis wrote:
| Come to Berlin and marvel at how many cash-only shops we
| have.
|
| And if you are talking about internet retailers, can we
| make an exercise to think of how many _new_ businesses
| would be viable if transactions of _20 cents_ were a
| thing?
| vorpalhex wrote:
| If you don't trust the customer, don't take their
| business.
| rglullis wrote:
| Right, shoplifting doesn't exist. Movie theaters run
| around profitably by getting people to pay whatever they
| want. They even let them bring their own food. And banks
| give you a mortgage just because you look like such a
| nice dude.
| rglullis wrote:
| Thank you for your comment, for a moment I thought I was
| crazy to believe that it can make sense to have a payment
| system where _merchants_ are protected.
|
| When I say the majority of anti-crypto people are
| privileged, it's because of this. They never got to
| experience life in a world where people nickel-and-dime on
| a 5 dollar purchase. They can not even _conceive_ of a
| world where "evil" business owners have legitimate reasons
| to want to protect themselves, and they can't even see that
| people will do the most stupid stuff over pettiness or
| because they think they can get away with it.
| ribosometronome wrote:
| >When I say the majority of anti-crypto people are
| privileged, it's because of this. They never got to
| experience life in a world where people nickel-and-dime
| on a 5 dollar purchase.
|
| Ah yes, a classic case of "non-business owner privilege".
| Most of us are blind to how good we have it.
| viraptor wrote:
| There's also the issue of <$10 services being used
| explicitly to test stolen credit cards, before they're sold
| and used for the big spending.
|
| > with 0% low level fraud like this.
|
| It's got its own issues. For example i hope you've got a
| separate wallet per transaction. Otherwise someone will use
| their tumbled BTC to pay you and you'll get blacklisted
| from using it in exchanges.
| cowtools wrote:
| I think bitcoiners already use a new address for every
| transaction. They call it "HD Wallets".
|
| >Otherwise someone will use their tumbled BTC to pay you
| and you'll get blacklisted from using it in exchanges.
|
| This is a non-issue for cryptocurrencies with mandatory
| obfuscation like monero. Worst case scenario, you swap
| your tainted BTC for monero[0] and take the monero to an
| exchange.
|
| [0] https://github.com/comit-network/xmr-btc-swap
| gjvnq wrote:
| > And it's hard to fire these customers because they come
| back with a different card and fake names.
|
| Perhaps it is time to start asking for government IDs
| before accessing customer service.
| UncleEntity wrote:
| How would that work if you validly didn't make the charge
| or were charged incorrectly and were calling to give them
| a chance to fix things?
|
| I once had someone enter my zip code as the payment
| amount and completely drained my bank account at a time
| in my life when I somewhat enjoyed eating and if they
| told me I would have to send them a copy of a government
| issued ID before they would even talk to me I don't even
| know what would have happened. Nothing good I can tell
| you.
| cowtools wrote:
| Well, in crypto there's still non-zero amounts of fraud if
| the merchant doesn't deliver their goods or if the sender
| executes double spend attacks. But theoretical double-spend
| attacks aside, almost all transactions require some minimal
| level trust between the merchant and the customer
| regardless of payment system. In this sense, Cryptocurrency
| doesn't prevent fraud completely but it does severely limit
| the extent and direction of fraud.
| devwastaken wrote:
| Organizations are incapable of properly dealing with "firing
| the customer" in that manner. You're talking about hundreds
| of office employees with generic technical knowledge. This
| ultimately ends up in firing the wrong customers, and when
| those customers end up being big, your company gets a poor
| reputation and lack of revenue.
|
| Therefore eating the cost is the most profitable outcome.
| busterarm wrote:
| Yeah, all of the other payment processors have settled on
| somewhere between 2-4% fees to handle fraud. See PayPal.
|
| So either Patreon has an order of magnitude more fraud going on
| or is massively wasteful in its business operations. Probably
| both.
| thathndude wrote:
| Yes, but that 2-4% works when 90% of the range of charges is
| 10-1000. But with Patreon the nature of its transactions are
| that 95% are $30 or less.
| RHSeeger wrote:
| Or, to look at it another way... All the other payment
| processors have settled on needing to earn and average $0.50
| / transaction in order to make a profit. Then they calculated
| their average transaction and came up with a 3% (or 2 or 4)
| being required to make that amount.
|
| Then Patreon came up with the same $0.50 / transaction
| number. However, since their average transaction amount is so
| much lower, they have to charge a higher number in order to
| make their target.
| [deleted]
| ajhurliman wrote:
| Forex and PayPal's international payments aren't free, Patreon
| doesn't see those profits.
| Finnucane wrote:
| Sure, though my credit union credit card only charges 1% for
| forex, so presumably it could be done for less.
| ajhurliman wrote:
| That's a great rate, but Patreon doesn't have any control
| over customers' desire to use PayPal (it's a thorn in the
| side of the entire payments industry).
| whartung wrote:
| I appreciate there may be some international issues with this,
| but at least for U.S. domestic, what's wrong with folks using
| services such as Zelle? At least for direct gifting, vs
| "ordering" where you want the payment tied to the transaction.
| ericvanular wrote:
| A solution to this is for creators to make the same move as
| ecommerce businesses going from Etsy to Shopify. Getting closer
| to the money and having patrons pay them through their own
| domain. I believe in this idea so much that I built a solution
| for creators who want to do exactly that -> https://jetpeak.co
| owlbynight wrote:
| Verification process is insanely intrusive and a non-starter.
| Good luck, though. Your UI/UX is good.
| [deleted]
| PaulDavisThe1st wrote:
| There's an awful lot of comments here from people who seem
| totally unaware that PayPal offers a micropayment account type,
| with a completely different fee structure from a standard
| account. For US$1 transactions, a micropayment account saves 23c
| in fees.
|
| If you're talking about or doing many transactions below US$12
| and paying the standard fee structure, you're doing it wrong.
| kareemsabri wrote:
| Patreon is a business and I don't begrudge them the ability to
| charge customers for their service (though I think it's pretty
| buggy). Before Patreon, I did not subscribe to a single podcast.
| After Patreon, I subscribe to 3-5 at various times. I subscribe
| to a couple other standalone products but the bar is certainly
| higher as the value they must provide is greater to get over
| having another subscription on another platform.
|
| So I think Patreon likely does help individuals get business,
| even if they aren't out advertising on your behalf. That said, I
| agree the fee does seem high, given it is largely payment
| processing (and a simple media player) and we know what Stripe
| charges for that. I think they will probably be at risk from
| higher quality entrants like Substack who is moving into
| podcasting as well.
| raverbashing wrote:
| Exactly. And in the end, 80% of something is still something
| (or better said, 100% of zero is, you guessed, zero)
|
| A lot of people have been able to offer niche content through
| Patreon, so it's a net positive even if they fumble their offer
| sometimes
| Mc91 wrote:
| The same with me. I gave a little money each month to four
| different organizations on Patreon, about six months ago I saw
| LineageOS was on Patreon and started giving a little to them
| each month too. It makes it easier to get recurring donations,
| I already send to Patreon once a month, now I just send a few
| dollars more a month.
| noasaservice wrote:
| Lets not be disingenuous.
|
| CAPITALISM cuts deep inside creator's profits. Patreon is only
| one such that relies on the creative works of humans, and
| gatekeep while charging usurious rates for "access".
|
| Patreon DOES cut deep, for little benefit. But so does every
| company that hires people. By definition, we do not get the full
| surplus of our labor. We get scraps, and the "job creators"
| (read: capitalist scam) get the lion's share of our work.
|
| That's how capitalism works - it's a scheme where only a few at
| the top get the benefits of the rest of us, all the while they
| tell us that they deserve our benefits of work.
| wly_cdgr wrote:
| A "14-17%" cut seems very reasonable for the suite of services
| Patreon provides. Generous, if anything. I wouldn't fault them
| for taking 20%
| eterevsky wrote:
| YouTube takes 30% for "joining" the channel.
| Barrin92 wrote:
| Youtube is also a genuine platform that gets you an audience
| and discoverability, gets you ad revenue, and hosts your
| content (which in the case of streaming video is very much non-
| trivial technically). Patreon is a donation button with a feed.
| It's effectively a payment processor and in most of the world
| the margins in that industry are a fraction of a percent.
|
| This is Youtube vs Patreon
| (https://www.pymnts.com/subscriptions/2022/vimeo-raises-
| rates...)
|
| _" She says she began making subscriber-only Patreon content
| in 2020 and hosting it on Vimeo. Then came the notice from
| Vimeo on March 11 that van Baarle's bandwidth usage was in the
| top 1% of Vimeo's users. So if she wanted to keep hosting her
| content on the site, she'd need to upgrade to a custom plan
| that could run her as much as $3,500 a year, given a week to
| make changes or leave the site. The Verge noted that her
| experience was just one of many -- numerous Patreon creators
| received the notice, which has resulted in "confusion and
| panic."_
| WesleyLivesay wrote:
| These articles seem to pop up from time to time, and the persons
| numbers seem roughly accurate in my experience.
|
| In my experience Patreon has been around 11% cut scenario, split
| very roughly between Payment Fees and Platform fees. But I am on
| the Founders plan, which is the same 5% platform fees as Patreon
| Lite, but with the extra features of the 8% Pro plans.
|
| I do think it is probably best for creators to diversify their
| platforms, but I still think that Patreon is worth it just
| because of it being a very well known platform outside of just
| tech circles.
| agf wrote:
| I'm a fan of Patreon, but in my experience, it's not a well
| known platform outside of tech. I've mentioned it a number of
| times to a variety of different musicians, music producers,
| etc., and until maybe the past year none of them had ever heard
| of it, though recently one had.
|
| I think it does have the potential to be like Kickstarter and
| really broaden the appeal of this type of contribution, but
| from what I can see, it hasn't actually managed to do that part
| yet -- both based on articles like this one and my own
| anecdotal experience.
| dfinninger wrote:
| As an anecdotal counterpoint from the people I talk to,
| anyone who watches YouTube videos regularly seems to know
| what Patreon is. That might not be a massive section of the
| population, but it's not comprised of mainly tech workers.
| torginus wrote:
| Wait until this guy finds out about the government.
| dubswithus wrote:
| How many engineers does Patreon have?
| jdwithit wrote:
| According to this article[0], product and engineering was ~150
| people at the end of 2021 and they hope to scale to 400.
| Which...seems like a lot for what the company is? Although the
| hiring landscape has changed drastically in the last month so
| who knows how accurate that plan is today.
|
| [0] https://techcrunch.com/2021/12/21/patreon-cpo-interview-
| doub...
| Nextgrid wrote:
| Yes that's absolutely a lot considering the code to solve
| Patreon's business problem has been written long ago and
| works just as well. The core business problem can be boiled
| down to a set of spreadsheets - based on payments going in
| and creators subscription timeframes you work out the payout
| for each creator. If it takes you 150 engineers to do the
| aforementioned I'd look at you in a funny way or start
| suspecting ulterior motives (and in this case there indeed
| are ulterior motives - hint: the objective is _not_ to build
| a profitable product).
| dubswithus wrote:
| Craigslist had 50 employees in 2017. But a lot of companies
| like to go down the microservices / complicated
| architecture path which adds to the dev ops burden.
| jeroenhd wrote:
| What I think is something people easily overlook with Patreon and
| similar platforms is that it's quite hard to make a decent profit
| on $1 or $5 transactions that most of Patreon's income seems to
| come from.
|
| They're definitely overcharging for more profit, but your margins
| won't be much lower if you handle payment yourself. Your 3% bank
| cut to receive money doesn't always work because often there's a
| minimum fee per transaction.
|
| I know most iDeal (Dutch payment provider) transaction costs are
| 25 cents. It's a flat fee, so buying a EUR2000 TV will still
| leave you with 25 cents of fees, which is great for big stores,
| but when you use them do donate a single euro, the transaction
| fees are a whole quarter of the donation.
|
| Tons of tiny transactions is a pretty terrible way to receive
| money. It's not "give up >15%" terrible, especially if your
| patrons tend to donate more, but Patreon needs to spread costs
| over all creators to make small content creators worth the
| effort.
|
| Having a look at Donorbox, the same issue becomes clear: the cost
| for receiving payment in .NL is only 1.4%... and a EUR0,25
| payment processor fee. These low processing fees are also only
| applicable to registered non profits in the NL which the author
| most definitely isn't. Even with the extra cheap rates and a non
| profit the fees to the lowest tier (+-EUR3) add up to nearly 10%
| on a platform that's built around minimising costs for non profit
| organisations. There is the ability to use bank transfers for
| real cheap, but that's always a possibility anyway. One thing
| this site does seem to offer is the ability to offload all the
| site's cost onto the person who donates rather than subtract it
| afterwards, but that's just raising the donation price to
| compensate, not really a decrease in cost.
| weberer wrote:
| This is something crypto was supposed to fix. And maybe smaller
| coins did, but transaction costs for BTC and ETH are even
| higher.
| latchkey wrote:
| There is more to 'crypto' than just BTC/ETH. Quite a few of
| the larger L2 chains have fraction of a penny fees and
| transactions go through in seconds. They are actually perfect
| for smaller transactions. We just need more people to build
| on top of them and make real products like this in order to
| get more adoption.
| emptysongglass wrote:
| Lightning BTC is absurdly cheap and very fast.
| polski-g wrote:
| Iota is a way better technology for this sort of thing.
| oefrha wrote:
| Patreon charges a 5%-12% platform fee _on top of_ any payment
| processing fee. They're not footing the bill of 25c or whatever
| flat fee per transaction, as you seem to imply. They're not
| spreading costs.
|
| Whether you're donating $1000 or $1, Patreon is getting their
| 8% (or 5%, or 12%).
| thayne wrote:
| The solution for this is to have the donation system pool
| transactions together. Instead of a single transaction for each
| creator you donate to, you make a payment into a pool that you
| can then allocate funds from to various recipients. And instead
| of individual payments to recipients, you send a single lump
| sum once a month (or if perhaps less frequently if donations
| are sparse).
| amelius wrote:
| This is how banks should work.
| escapecharacter wrote:
| Gonna start a PAC for me and my friends' horny fan art
| commissions
| cto_of_antifa wrote:
| vinni2 wrote:
| how would that happen? credit card providers would need to
| pool transactions not the patreon?
| mtlynch wrote:
| I think what they mean is that if I'm making $1/month
| contributions to 20 different creators, and they're all on
| the same platform, I can pool that into a single
| transaction with a single $0.50 fee, meaning that fees eat
| only 2.5% of my donations.
|
| If I were donating to creators on different platforms, it
| would be 20 transactions, each with a fee of around $0.30,
| so fees would eat 30% of my donations.
| vzqx wrote:
| This is how Patreon already works - they pool both incoming
| and outgoing donations for the month into a single
| transaction to reduce fees. But there are a bunch of donors
| who only donate $1-$3 a month to a single creator, and these
| incoming transactions don't benefit from pooling.
| Dylan16807 wrote:
| This is how Patreon works when you're lucky.
|
| They keep degrading the pooling and/or threatening to
| remove it entirely.
| armchairhacker wrote:
| You pool the transactions over a longer period. The donor
| initially gets charged $10, but if they cancel early they
| will get refunded. Then after a few months they get charged
| another $10 and so on.
|
| It has drawbacks, like if the person doesn't have $10 or
| they complain that they're being charged. But a) is
| unlikely since most people who are that poor aren't
| donating money, and b) is hopefully unlikely if you make it
| very clear how the payment system works and that they can
| get refunded if they cancel early.
| wmf wrote:
| I guess the next step would be to have a monthly minimum of
| $10 or more. You could still split it as 10 $1 donations
| but at least fees would be reasonable.
| CJefferson wrote:
| I suspect patreon's hope is you onboard people with one
| small monthly payment, then that person will over time
| add more which lets them then make a useful profit on
| you.
| BurningFrog wrote:
| You can "pool" individuals over time.
|
| That is, instead of $3/month you do, say, $9/quarter.
| Nowado wrote:
| Which is going to lower conversion. Significantly.
|
| Whole reason why any service is paid monthly is because
| it's just makes more money over customer lifetime.
| smachiz wrote:
| it's not really going to change the lifetime value of a
| customer, I bet, once they're onboarded. But it will
| absolutely lower conversion.
|
| People do month to month because they don't know if
| they'll find value in it, it's totally no commitment.
|
| Asking to think if I'll still like this creator in 3
| months requires actual thought... and $9 feels like money
| whereas $3 just doesn't.
| generalizations wrote:
| I looked into this a while back with PayPal, when I was
| researching a business that would depend on massive quantities
| of $1 transactions. At the time (dunno if they still do),
| PayPal had a separate type of account you could sign up for
| with a different fee structure for transactions of that
| magnitude. It was pretty good.
| PaulDavisThe1st wrote:
| ardour.org makes the majority of its income (approx
| US$200k/yr) via a PayPal micropayment account. Most of our
| transactions are < US$12, the crossover point where the
| standard and micropayment fees are the same (higher amounts
| are better with standard fees). On a US$1 transaction (we do
| thousands of these every month) we save 23c per transaction.
|
| The one downside is that if PayPal ever stops offering this,
| the revenue model for ardour.org will have to change, since
| there are really no viable alternatives.
| sorenjan wrote:
| I think this is one of the problems flattr tries to solve.
| instead of multiple micro transactions you make one larger
| transaction each month to flattr, who then divides it up to all
| the creators you want to support. I don't know how Patreon does
| it, if they make one charge for each creator you support I
| guess the transactions fees can become a large part of the
| total amount.
|
| https://flattr.com/
| DoctorOW wrote:
| All patreon customers are also only charged once per month no
| matter how many creators they support. The main difference
| being that since Patreon has people pledge specific dollar
| amounts instead of trying to figure it out month-to-month
| like Flattr the average Patreon customer has much fewer
| creators.
| arinlen wrote:
| > _What I think is something people easily overlook with
| Patreon and similar platforms is that it 's quite hard to make
| a decent profit on $1 or $5 transactions that most of Patreon's
| income seems to come from._
|
| Nothing forces Patreon to take a cut for each and every
| donation, let alone such a hefty fee. Plenty of micropayment
| services charge instead a fee for transactions into and out of
| their system, and internal transactions don't incur any cost or
| transaction fee.
|
| If Patreon insists in taking a hefty cut from each and every
| donation, that's a problem caused by their business model.
| Sebb767 wrote:
| > Nothing forces Patreon to take a cut for each and every
| donation, let alone such a hefty fee.
|
| Payment processors do. Donorbox [0], which the author
| switched to, states their pricing. For 1$, you'll pay ~32p
| (Stripe)/ ~51p (PayPal) for the payment processor, so
| 32%-51%. For 5$, you'll pay ~40p (Stripe) or 59p (PayPal), so
| still 8%-12%.
|
| This is without Patreon/Donorbox having made a single dollar
| yet, but they do need to pay people to set up payment, their
| platform and support. Also, they want to make profit, since
| they're not a charity, after all.
|
| [0] https://donorbox.org/pricing
| Dylan16807 wrote:
| Paypal lets you do micropayment charges for 5 cents plus
| 5%, and I've seen other services claim to have similar
| numbers.
| Pakdef wrote:
| sumy23 wrote:
| I ran a micro-payments platform and our solution was to have
| users store money in their "wallets" that they could spend on
| any content with minimum amounts for wallet additions.
| Unsurprisingly, people don't like spending more money :)
| latchkey wrote:
| Depends on the platform I think. I built the one for Kink
| (NSFW porn) and it did quite well. The stored 'money' was
| called, Kinks that we held database entries for. People would
| just buy blocks of $10+ of these tokens (this was long before
| blockchain) and refresh them as they spent them.
| monkeybutton wrote:
| How well did that go with how anti-adult industry the
| banking industry is?
| latchkey wrote:
| It was a pain in the ass. The porn industry developed 3rd
| party systems that would swap between merchant accounts
| on a whim. When people would put their credit card in, on
| the back end, it would try multiple accounts until it
| found one that would take the card and it was all
| integrated with a whole referral system [1] called NATS
| that was really sketchy software. It has been many years
| for me and seeing that they are still in business is kind
| of crazy really.
|
| [1] https://toomuchmedia.com/
| Nextgrid wrote:
| On the other hand, Patreon bills supporters as one lump sum and
| then pays out as a lump sum as well - that should at least
| offset the flat per-transaction fee, if there is any.
| harles wrote:
| On the billing side, I'd guess it's unlikely to help. I've
| never paid more than $6/mo total on Patreon and I'd expect
| this is typical.
| Cerium wrote:
| Mine is about $20 a month, a couple $5, a couple $1 per
| episode, one $3.5.
| [deleted]
| egypturnash wrote:
| They keep on proposing stuff that will break this. Usually it
| is claimed to be an attempt to solve the problem of someone
| supporting a creator who uses Patreon to create a paywall,
| snagging everything they can, and cancelling before the
| monthly charge ever hits.
|
| Which _is_ a problem but their proposed solutions always seem
| to involve things like "now _everyone_ pays on the
| anniversary of when they started supporting a creator " which
| just completely fucks up the original value proposition of
| "we merge lots of little transactions into one decent-sized
| one", as well as fucking things up for people like me who are
| just using Patreon as a tip jar for stuff they release
| publicly. Letting individual creators decide this will work
| for them and opt into it is never mentioned as an option, so
| Patreon gets to hear a loud, sustained scream from creators
| who are normally quiet, and walk it back a week later.
| echelon wrote:
| They should have a system to charge in bulk up front that you
| can then use to support creators. Similar to how Reddit
| allows purchase of hundreds of thousands of coins at once.
|
| Sell "Patreon Tokens". 100 for $100 at a one to one exchange
| rate. You can then spend in stores (one time redemptions) or
| subscribe to creators.
| tolmasky wrote:
| The thing about Patreon is that it sucks for users too (as in,
| the consumers). Both the website and the app really suck. They
| look horrible, have few features, and often work poorly. It
| essentially serves as a notification platform that I then try to
| bounce out of into YouTube or wherever as soon as possible. It's
| kind of mind boggling that they seem to leave so much engagement
| on the table when even a mediocre website would probably keep me
| on there longer and thus potentially get me introduced to other
| creators, vs. that being solely through YouTube or something
| else. Then again, maybe it's a better investment to figure out
| way to take 17% from creators than to figure out ways to get
| people to find more creators.
| shasheene wrote:
| Yes, Patreon's WYSIWYG editor is incredibly buggy.
|
| But far worse is Patreon's messaging platform. Write a long
| message, then accidentally have a window resize event occur and
| lose your entire message.
|
| Patreon's problem with losing text has burned me more times
| than other products with similar issues (like creating a Jira
| issue).
|
| Some platforms like Slack do a much better job of saving a
| draft.
| instagary wrote:
| Agreed! As a creator I struggle navigating their web app to
| find/change basic things about my page.
|
| The other side of it isn't great either. The content posted by
| the creators I follow is often slow to load, gifs & images
| being huge & slow search.
| zippergz wrote:
| What features should Patreon have? I'm not paying for website
| features. I am paying to support creators I like. I'd actually
| be happier if the platform did even less. Just get the money to
| the people I want to support in a low-friction manner, and get
| out of the way.
| jpeter wrote:
| Dark Mode, faster content delivery and a batch download
| function. Some DRM system for creators would also be
| interesting.
| michaelt wrote:
| Your experience with Patreon will depend on what kind of
| thing you're supporting.
|
| For example, if you support a Youtube channel you might
| continue watching on Youtube and rarely need to visit
| Patreon's website at all.
|
| But if you support an author who is releasing a book, three
| pages per day? And you're paying for early access? You'll
| notice there's no bookmarking / next page features.
|
| And if that author has three price tiers, depending on how
| many pages of early access you get? Only the most expensive
| tier can get new-pages-uploaded e-mails - new pages being
| unlocked for lower tiers isn't an event that triggers
| notification e-mails.
| web007 wrote:
| The author is charging more for access to the feature you
| want. You need to pay more to get that benefit, just like
| you need to pay more for early access or whatever other
| perks are offered.
| kareemsabri wrote:
| How can they "get out of the way" when you need to use the
| app to play the content?
|
| The player sucks, episode search sucks.
| Macha wrote:
| I guess most creators I watch tend to link to unlisted
| youtube videos to share with their patrons rather than use
| Patreon's built in uploads.
| sharatvir wrote:
| This and private feeds for podcasts
| sofixa wrote:
| Same here, the only ones that don't do that upload to
| Vimeo and link that in the Patreon update.
| kareemsabri wrote:
| Oh. I wish more did that.
| rchaud wrote:
| Creators can use ehatver they want. In one case, I was just
| given access to a private Google Drive folder.
| zippergz wrote:
| Yeah, I think the sibling comment has a point that I hadn't
| thought of. It does seem to depend on what you support. I
| currently have about 10 Patreon subscriptions, and zero
| where I consume any content at all via the Patreon website
| or app. I get that if people need to do that, it would be
| frustrating. (In fact, for the vast majority of the stuff I
| support on Patreon, I don't really consume any exclusive
| content or use any benefits. I support them because I like
| the main thing they do and I want to toss a few bucks their
| way, not because I want any rewards or exclusives.)
| krnlpnc wrote:
| 15% is not a deep cut.
|
| That's a totally a reasonable cost for smoothly running the
| infrastructure necessary to support a creator with a monthly
| subscription model.
| cowtools wrote:
| No. It's unacceptable that payment systems charge anything more
| than a fraction of a percent for each transaction. In any well-
| designed payment system the marginal cost per transaction is
| minuscule.
| fartcannon wrote:
| That's about 10x more that I'd consider reasonable for what is
| effectly hosting a static website and bulletin board. I think
| we've all just had our expectations blown out of the water by
| Steam (and the subsequent app stores).
| conradfr wrote:
| There's nothing static about processing payments and
| providing support.
| Dylan16807 wrote:
| That's not "the infrastructure", then, that's one piece of
| it.
| deadbunny wrote:
| A static website that shows/hides content depending on your
| subscription level dynamically?
| fartcannon wrote:
| I don't know how to respond to that. That's not a
| complicated thing to do.
|
| Patreon gets to take the money they take because they've
| found a good niche, not because their website can do
| something that all websites have been able to do since the
| 1990s.
|
| I personally think they take too much for what they
| provide. That's all. I am very happy they exist, though,
| because otherwise everyone would just be chasing the
| algorithm.
| yazaddaruvala wrote:
| Pateron should work the same as they enable for any other
| content creator: They should get paid in donations by their
| customers.
| jelling wrote:
| TFW when white collar professionals complain about the prices
| businesses charge in order to pay the white collar salaries
| necessary to make the products they use. And so many of these
| companies aren't even profitable, either.
|
| It's like carnivores being judgmental of hunters.
| wahnfrieden wrote:
| careful talking about profitability in your point, as most of
| these companies are reinvesting to chase unicorn/monopoly level
| growth. some struggle with profit not because it's a tough biz
| creators should be thankful to them for, but because they're
| structured/managed for growth over current customer needs.
|
| for-profit platforms will always seek to maximize the function,
| the marginal value of the rent they take. any charity to
| creators is incidental dynamics along the way
| markstos wrote:
| Ghost provides similar features for bloggers but does not mark
| up subscription payments from subscribers. The cut of payments
| is about 3%.
| Nextgrid wrote:
| Patreon is a CRUD app and something you could build in a few
| months and consider it done if you wanted to. The core value
| proposition of Patreon hasn't changed since they launched, and
| the business problem is still "take $$$ from people, figure out
| how much to pay each creator, pay out $$$ to creators".
|
| > And so many of these companies aren't even profitable,
| either.
|
| It's not profitable because it's an engineering playground -
| the objective is _not_ to solve the business problem described
| above, it 's to build complexity for the sake of complexity to
| justify future funding rounds.
|
| If they wanted to, they could literally consider the project
| done and run it with a skeleton crew handling support &
| maintenance, but why intentionally put yourself out of a job?
| Cu3PO42 wrote:
| I don't disagree that the core concept of Patreon is
| relatively simple and may even be able to be recreated in a
| few months, but what you definitely can't do in that amount
| of time is to comply with the breadth of regulations all over
| the world.
| [deleted]
| stevenjgarner wrote:
| So the article criticizes Patreon for having "additional charges
| for non-US PayPal payments as well as separate currency
| conversion fees that are mysteriously high at 2.5%", offering
| donorbox.org as a respite, yet no-where can I seem to find what
| donorbox charges for non-US PayPal payments and currency
| conversion?
| rossdavidh wrote:
| Typical credit card fees might be 25 cents/transaction plus 3%.
| What transaction size would give you the 17% cut that the writer
| complains about Patreon taking?
|
| .25 + .03x = .17x .25 = .14x x = .25/.14 = 1.79
|
| So, for these numbers (exact rates vary but are in this
| ballpark), a transaction size of $1.79 will result in a cut of
| 17%.
|
| There is a non-zero cost per transaction, with any credit card
| company, with paper checks (built into the cost of the check),
| with any payment scheme other than "give me the cash in person".
| The smaller the transaction size, the larger the cost will be as
| a percentage. The numbers described here seem pretty typical.
| reiichiroh wrote:
| It still amusing to be that the founder of Patreon is the novelty
| band Pomplamoose.
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