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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:
2026-06

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.

----EDIT: It's like sales taxOne 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.

Files

Comments

Esper

I feel like this is a great thing for creators. Though I worry that a lot of people might drop their pledges just because they see that it's increasing.

Michelle Shepardson

I'm a fan of transparency of fees (I knew some of what I pledged went to Patreon and fees, but not exactly what), but I understand why a lot of people are upset about this change.I wouldn't mind bumping up my pledges to creators if the fees are presented to me, but it seems like a change that they should've made opt-in or per-creator, not across the board. (And a separate charge per pledge, as some have noted, seems extremely odd given Patreon's stated way of charging patrons in a lump sum?)

Peter Mohrbacher

This definitely feels like the tail end of a long and complex conversation between Patreon and it's payment processing partners. There is a case to be made for a more nuanced implementation for this change, but I have no idea what options they even had to do so.

Michelle Shepardson

True. I am betting they have options in this area, and might have missed the impact to $1/creator patrons in particular? But hopeful they'll have a reasonable response to this within the next few days.

Icra

I feel like it is extremely disengenuous to say "I've been covering these fees," when it is simply "patreon's cut." Unless this is actually money you pay to patreon, from your accounts, and not taken out of the pledges, this is literally just charging the consumer more and calling it a simple reshuffling of how things are processed.

Kim Myatt

Thank you for breaking it down. I was stoked at first to see the changes, because I thought they were positive, but now I'm kind of worried about my fledgeling Patreon. We'll have to see, I suppose.

Peter Mohrbacher

It is totally accurate to say that the creators have been paying the payment processing fees up until now because they are collected in addition to Patreon's 5% cut and they are given to a 3rd party. Paypal maybe? There is a real question of who will pay the $0.35 + 2.9% processing fee for each transaction. Should Patreon cover it out of their cut? Should the Creators continue to pay it each month? Patreon has chosen to treat it the way retailers chose to cover the liability created by sales tax, which is to pass it on to the customer in addition to the listed price. To move that money from one account to another will cost someone a fee. The question of who is best suited to cover that cost is a debatable one, but it is a real one.

Peter Mohrbacher

I think the greatest negative impact will be on people who are subscribed to a large number of campaigns at small dollar amounts the way I am. My own cost to support creators is about the jump by around 40%. I could see someone who doesn't also have a successful campaign of their own start to prune down their total pledges in response to this change, but I'm hoping it won't effect too many people's decisions.

Kim Myatt

Yeah I thought that too. Hm. I think it's just a case of wait and see, but hopefully it'll right itself.

Peter Mohrbacher

Anyone who only wanted to be charged $1 could make a pledge for $0.63. That would bring things back to how they are now, but I would personally feel bad doing that to a creator I was supporting...

Peter Mohrbacher

There's a chance it will cause a dip in pledges for a lot of campaigns, but hopefully it will yield a long term benefit. Especially to campaigns with lots of small pledges.

Michelle Shepardson

Not everyone can afford to support the number of creators they want to with the additional fees. ^^ Not to mention this still doesn't effectively address why it's a fee on top of every charge when Patreon should be collecting monthly pledges together in one transaction.

Heather R. Hitchman

Thanks for the breakdown Pete, the way you put it makes me more comfortable with the changes. I hope I can find a way to communicate this to my Patrons as well as you have.

Peter Mohrbacher

If a campaign has 100 subscribers, Patreon will have to process 100 unique credit card transactions in order to collect those pledges in order to pay the creator. Just because they happen at the same time does not mean they are a single transaction. Though, a campaign that charges you for multiple creations per month will likely bundle those charges into a single transaction with a lower percentage fee.

Michelle Shepardson

But I, pledging to 50-ish creators, shouldn't have to (and I believe don't, at the moment) pay a charge on each pledge I make, because my total pledge amount for the month is taken out of my account. If Patreon's actually doing a charge once per pledging account no matter how many campaigns I'm pledging to, that's fine and I retract my worries, but that wasn't my understanding of the change. If they have to make a separate transaction for each pledge for each campaign, that seems odd and I'd like more explanation, but probably fine?

Peter Mohrbacher

That's a good point, I hadn't considered that the payments to all the different creators might be assessed together. That might be a technology issue. If I get a chance to talk to some of the developers, I'm definitely going to ask them about that. I'm pledging to around 40 campaigns right now myself, so I feel you.

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.

Danny Mol

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"

Kim Myatt

It is a bit concerning, after a few hours of processing it all, to see people's reactions to it. I'm seeing a lot of folks raising the flag for Drip. There'll be costs everywhere, though, with every platform. I'm hoping it'll blow over.

Peter Mohrbacher

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.

James Pinkett

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.