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A Minor Change to Patreon's Fees (boring) (Patreon)

Published:
2017-12-06 23:15:00
Edited:
2017-12-07 01:09:26
Imported:
2022-09

Content

Tl;DR Your pledges are going to increase in cost by an average of around $0.58 but it's going to directly benefit the creators you pledge to on Patreon.

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Patreon is announcing a policy change regarding payment processing fees. You should see an update from them via email tomorrow, but I've got advance notice, so I wanted to let you know what it means for you specifically.

The way it works right now is that I've been covering a variety of fees which range from 12%-20% of your pledge's total value. Patreon is shifting the responsibility of some of those fees from the creators to you. 

Keep reading if you want a more detailed breakdown



Math

The implications of this change depend on your pledge level.

For $1 pledges

As it stands, creators are losing a huge percentage of the $1 pledges made to them in the form of fees. Most of that is the cost comes from the simple act of transferring the money since there is a flat cost per transaction. This policy change will move the responsibility of that fee to you, raising the cost of a $1.00 pledge to $1.38. 

For $10 pledges

With larger pledge amounts, the cost increase starts to become less significant. Your costs will rise from $10.00 to $10.64. 

For $75 pledges

For very large pledges, the 2.9% part of the fee starts adding up a little. The cost will increase from $75.00 to $77.52. 

My own thoughts

Patreon has made a lot of changes over the years in an effort to best serve its community of creators. This is a weird one, but I think it's actually pretty meaningful. By surfacing hidden charges and moving them off of creators, Patreon is adding hundreds of dollars of reliable monthly income to this project. Since this wasn't a change I would have likely campaigned for, it feels to me like I'm being looked out for by the platform owners. In this day and age, that feels rare.

Feel free to share your own thoughts in the comments here on this thread.

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EDIT: It's like sales tax

One way to think about payment processing fees, is that it's like sales tax. Lots of businesses need to pay a percentage of their sales as a tax (it's 9.2% in Illinois). Instead of silently raising the sticker prices 9.2% to cover that cost, businesses assess the tax in addition to the sticker price. Patreon's new policy is identical to that.

Comments

Anonymous

If I were a creator I might be worried but speaking as a patron, I don’t mind covering the fee. For total transparency on my end, I currently pay 6.50 a month and I think that will rise to 8 bucks at most? That increase isn’t going to make much of a dent in my disposable income.

Anonymous

Thank you for explaining the cost breakdown structure, its always good to know what your paying for, i know its not a big amount of money but i want to know what i am paying for, So will this mean that our VAT (for me its 21%) will be charged over the fee we need to start paying for the money transaction? so example $10 dollar plegde +2,9% + $0.35 = $10.64 x 21% = $2.2344, makes a total of $12.87 were the old total amount was $12.1, like i mentoined is not a big amount of money but this just feels like "we just gonna shift the cost of paying our transactions to the people who are trying to help artists"

Peter Mohrbacher
>>8727686

While I really don't like the fact that multiple gatekeers are reaching into the middle of this system, I don't really see this shift as a punishment against you. The basic idea behind this change is that it's nicer to give charitably to a cause where you know how much the other person is receiving rather than giving it to a cause where some mysterious amount is just vanishing into a black hole.

Anonymous
>>8727686

i completely agree, i would gladly pay the fee to ensure the amount i choose to give to a creator more closely approximately the amount in the pledge, we have fees for almost all purchases and take it in stride but when the creator get a little more everyone loses their lid. I know they changes it but i was happy to cover the fees to help support art i like. Too bad they reversed it, i think the creators would be better if this understanding was implicit and and it stayed.