Thread by @Snubs

Hmm. @Patreon is changing their fee guidelines. *Clears throat*
Yo, I used to work in the credit card industry, so let's talk credit card fees and transaction rates!
patreon.zendesk.com/hc/en-us/artic…

I've kept a close eye on my patreon stats since I started (3) accounts. One of 'em, owned by me, has had a steady 5% fee from patreon, and steady 5.75-6% fee for processing payments.

Patreon is shifting that 5.75-6% processing fee away from me and onto you, and setting it at 2.9%+.35 per transaction, which I think is unfair. Here's why:

In the credit card industry, merchants are always charged the transaction fee from the credit card merchant services (the folks that set them up to run visa/MC/discover/amex cards) company. Merchant services reaps the benefits, and the merchant eats that cost.

Merchants sometimes work the cc fees into their product, but you RARELY see a merchant stick the customer with that fee. If we take these classic rules and apply them to patreon, Patreon is the merchant, I am the reseller/merchant(selling goods) and patrons are the customer.

In this case, it is up to me to determine the cost of goods sold, the average percentage of fees, and the profit margin I need to make to survive. I've agreed to patreons business model and signed up with their plan, (cont)

But they've decided that my customers (in this case, patrons) should pay the service fee, even though I'm the merchant/seller of thy goods of ye ol' youtubes.

I should clarify, the patreon business model makes me consider my patrons as producers and executives of my show. Since they are contributing to my role on the nets, I take their opinions seriously and have respect for the kindness they've shown me.

This is why I'm being upfront about the costs associated, based on my history of expertise on the subject of transaction fees and money handling. Hooray, banking jobs!

So, from a patron standpoint, you'll be charged more for the same pledge. Those fees I used to pay as the merchant are now being taken directly out of your pledge. So if you pledge $5, you'll actually see $5.50 charged.

If someone pledged $5 to me, patreon takes 5%, and credit card industry takes ~5-6%. Before the change, my take home pay would be $4.50 or so. That's roughly 10%. Enough for a Starbucks!

I don't see that extra $.50 you're charged after the change. The credit card industry does. What I do see is a shift of $.25, or a change from 10% to 5% in the monthly fees. So I'd take home $4.75 now. You're being charged .50 so I can take home an extra .25.

Now, if you pledge less than $5, it gets complicated.

Remember that .35 transaction fee?
That's for EVERY single pledge you make. So if you make 10 separate $1.00 pledges in a month, that's $3.50. Plus $2.90 if we're including the 2.9%. that's 2.9%+0.35 per transaction. So ~$6.40 you'll be charged on top of $10 in pledges.

So you're charged $16.50, for $10 in pledges (each one at $1), and your creator takes home $0.95 (if it's a $1 pledge).

So, if you're a patreon creator with patrons pledging at their max budget, you'll probably see decreased pledge amounts because this is going to hurt your customers. If patrons can afford it, you won't see their pledge change, but more of their pledge will go to you.

I don't know how this'll affect my (3) different accounts on patreon. I am both a patron and a creator, so I try to go at it from both perspectives. I'm still trying to figure out what to post on my pages. Heck, maybe I'll just link this thread.

Either way, if you're a baller pledger, you will probably want to seriously consider how much in fees you'll be paying per month. I wish patreon gave creators more time to change pledge levels to account for new fees put on their patrons.

AFAIK, for each card charged via patreon, patreon would pay that fee to processor, and that fee was charged to me as a creator (plus probably an additional amount as profit). So now they're shifting that fee from me to patrons.

I cannot TELL YOU how many times I'd get a call from a merchant asking us to lower tranx fees and we'd remove the per transaction $0.35 and lower them to 2.15%.

Merchants (creators) should be considering the fees associated with selling anything (services/art/product) online and work those costs into cost of goods sold. I dunno who complained to patreon about their fees, but someone don't know how the cc industry work.

Also, shameless plug:
snubsie.com/support
I do stuff on the youtubes.

A couple of good points made by folks who reply:
As a patron, if I pledge $1-5 to many different creators, i usually just see 1 lump sum come out of my cc bill.
In merchant industry, that 1 lump sum is charged the transaction fee once.

But in this case, each of those pledges is billed as if it's a separate tranx, even tho my credit card is only charged once. So as a patron I should only pay .35 once, not 10x for one cc tranx.