Patreon fee structure
Dec. 7th, 2017 10:36 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
boxofdelightsYou may have heard that Patreon is changing their fee structure to charge the service fees to patrons instead of creators.
If I understand correctly, Patreon is actually using that change as a smokescreen for the change of charging each patron one service fee per donation, instead of one service fee per month. So a patron who gives 20 creators $1 each will now be paying 20 $0.35 minimum service fees, plus the 2.9% service charge on the whole $20. Patreon gets to keep the difference between (the service fees patrons pay to Patreon) and (the service fees Patreon pays to its bank), and that difference just got a lot bigger.
This is on top of the 5% of the total that Patreon takes from creators, which is not changing.
I'll sponsor my creators in other ways, or go back to Patreon if Patreon reverses this change, but for now I am on strike.
There is also a petition asking Patreon to change back here: https://www.change.org/p/patreon-patreon-drop-the-external-service-charge
If I understand correctly, Patreon is actually using that change as a smokescreen for the change of charging each patron one service fee per donation, instead of one service fee per month. So a patron who gives 20 creators $1 each will now be paying 20 $0.35 minimum service fees, plus the 2.9% service charge on the whole $20. Patreon gets to keep the difference between (the service fees patrons pay to Patreon) and (the service fees Patreon pays to its bank), and that difference just got a lot bigger.
This is on top of the 5% of the total that Patreon takes from creators, which is not changing.
I'll sponsor my creators in other ways, or go back to Patreon if Patreon reverses this change, but for now I am on strike.
There is also a petition asking Patreon to change back here: https://www.change.org/p/patreon-patreon-drop-the-external-service-charge
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Date: 2017-12-08 06:53 am (UTC)Also sounds like a double-taxation sort of problem, if that makes any sense. Are they trying to discourage microfinancing? Hmm, I should probably go read about it instead of just asking you all these questions! Thanks for pointing it out, though.
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Date: 2017-12-08 07:20 am (UTC)If I understand their statement, they are making two changes. I think the first one is just fine. That is adding the processing fee to my pledge, so, if I pledge $1, Patreon takes ($1 + processing fee) from me and gives ($1 - Patreon's 5%) to the creator.
[The old way, if I pledged $1, Patreon took $1 from me and gave ($1 - processing fee - Patreon's 5%) to the creator.]
The other change, which I think they are trying to cover up by making the first change at the same time, is that they are adding their processing fee to every pledge. They only take money from me once a month, so they only pay one processing fee for that one transaction. But they will charge me one processing fee for each pledge, so if I give one creator $20 at one time, I pay Patreon $0.93 (2.9% times $20 plus $0.35), but if I give twenty creators $1 each, I pay Patreon $7.58 (2.9% times $20 plus 20 times $0.35).
Either way, the creator(s) also pay Patreon 5% of the money they receive.