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$138 is unreasonable to me for one simple reason: When I pledge to 20 creators, Patreon batches my pledges based on arbitrary server-side criteria, such that th

$138 is unreasonable to me for one simple reason: When I pledge to 20 creators, Patreon batches my pledges based on arbitrary server-side criteria, such that they cannot guarantee how many charges will be made to cover my pledges. So typically I see two charges per month. They can't charge me $0.35 per charge because the # of charges varies without any ability for the customer to predict and cannot be defended reasonably to customers. Instead of revamping their billing groupings to ensure that each patron is charged once per month, they are charging $0.35 per creator, which is the absolute worst case scenario here. So to me, the ripoff is that they charge me for two credit card transactions, but instead of $0.35 per transaction, they charge $0.35 per creator within a single credit transaction - when that $0.35 is not charged to them by their merchant processor for those individual creators. I would have been fine if they'd simply tell me "X creators = Y transactions @ $0.35 each + 2.9% of amount", where Y is virtually always some tiny fraction of X, but that they instead say "X creators = X transactions @ $0.35 each + 2.9% of amount" to avoid regrouping their billing is a misuse of the word 'transaction' as they implement it. EDIT: If Patreon has been charging $0.35 per patreon to their creators, then this is not new profit for them, but is instead the same profit now collected from patreons instead of creators. It's still unacceptable to me, because they're charging the worst-case scenario (one transaction, per patreon, per creator) and then optimizing for less than that and not crediting the excess (Y-X) x $0.35 back somehow. If their 5% take isn't enough to cover transaction costs, hiding a profit in (Y-X) x $0.35 is not the correct way to solve that. EDIT: It's possible that Patreon was censured by Stripe somehow and is going to stop batching charges period full stop come January, and so then Y=X for all cases, at which point this all starts to make a lot more sense.

cdancette 9y ago
Do you know why they batch the pledges into several payments and not just one big payment?
- floatingatoll 9y ago
  Like Apple, they break up charges into arbitrary batches on their side, but I did not ask them to provide guidance on what their batch limits are. Apple sometimes waits days to charge me, and often distributes charges randomly across multiple transactions, so clearly there's some kind of optimization limit that's reached at scale.
- huac 9y ago
  Money laundering rules
  - pavel_lishin 9y ago
    Can you go into some more depth?
    - huac 9y ago
      https://news.ycombinator.com/item?id=15872128 https://news.ycombinator.com/item?id=15872128 (just a guess)
    - PeterisP 9y ago
      Hadn't thought of this reason, but that might make sense - in essence, the standard AML rules have always required specifying the final beneficiary of a payment if you pay money to someone who'll hand it over to them. If Patreon is being treated as or claiming to be a payment service provider (i.e. it passes money through to authors without owning it in between, the only revenue on their balance sheet is the fee they take) then it'd be wrong to state that Patreon is the beneficiary of a particular payment, since it's not; and they'd be required to list all the actual beneficiaries on every payment, which can't really be done for reasons, so they need to charge many small separate payments. On the other hand, if Patreon is being treated as or claiming to be selling a service (i.e. it takes all your money, and pays it out to authors as a business expense) then that has major tax implications, namely, all the amount (as opposed to just their fees) is their revenue and thus subject to various sales taxes and VAT worldwide. This seems to be the current option, since they're charging VAT on the full amount for EU patrons. It might be plausible that they're currently switching from option 2 to option 1 for financial reasons, and this precludes them from batching in the future.
      - pavel_lishin 9y ago
        > they'd be required to list all the actual beneficiaries on every payment, which can't really be done for reasons How so? If they can list the beneficiaries on the individual payments, why can't they lump them into my single-payment?
rgbrenner 9y ago
This is a pretty terrible excuse. It amounts to: we're overcharging you because we're too lazy to change our billing system. A reasonable change is to make one charge per month for the total you've pledged. The CC charges for $100 would be $3.25. No one would object to $3.25 per $100.
- floatingatoll 9y ago
  I would not call it "lazy" because that's a direct insult to the human beings, but I have not yet seen a reasonable defense of why they appear to be charging more than Stripe charges them, and encourage folks to seek that when asking Patreon questions about this issue. EDIT: "why they're" -> "why they appear to be"
  - rgbrenner 9y ago
    Ok, yes that's fair. I shouldn't say lazy.. they could have an actual reason. but in 15 years of handling cc charges for my business, I can't think of a single one.
    - floatingatoll 9y ago
      There's a rumor floating around that Stripe has taken issue with their batching model and that they're being forced to stop batching, which would absolutely justify this change since then Y=X, but I've not been able to find any solid evidence one way or the other about that. EDIT: I filed a support ticket asking if my 2018-Jan charges will be batched or not. We'll see.
      - trowawee 9y ago
        I mean, why wouldn't they say that in the messages they've distributed to creators and patrons, then? If that's the case, they have needlessly caused themselves a tremendous amount of public headache by being disingenuous about the reason behind the change.
      - cjg_ 9y ago
floatingatoll 9y ago
Patreon confirmed that this change is to permit them to stop batching charges period full stop on Twitter, and updated their blog post. https://twitter.com/jackconte/status/938926147085242368 https://twitter.com/jackconte/status/938926147085242368
- quadrangle 9y ago
  They are being honest. They just aren't admitting why they would stop batching charges. And a large part of the answer is that they are a paywall service more than a donation platform, and everything follows from that.

cdancette 9y ago

Do you know why they batch the pledges into several payments and not just one big payment?

floatingatoll 9y ago
Like Apple, they break up charges into arbitrary batches on their side, but I did not ask them to provide guidance on what their batch limits are. Apple sometimes waits days to charge me, and often distributes charges randomly across multiple transactions, so clearly there's some kind of optimization limit that's reached at scale.
huac 9y ago
Money laundering rules
- pavel_lishin 9y ago
  Can you go into some more depth?
  - huac 9y ago
    https://news.ycombinator.com/item?id=15872128 https://news.ycombinator.com/item?id=15872128 (just a guess)
  - PeterisP 9y ago
    Hadn't thought of this reason, but that might make sense - in essence, the standard AML rules have always required specifying the final beneficiary of a payment if you pay money to someone who'll hand it over to them. If Patreon is being treated as or claiming to be a payment service provider (i.e. it passes money through to authors without owning it in between, the only revenue on their balance sheet is the fee they take) then it'd be wrong to state that Patreon is the beneficiary of a particular payment, since it's not; and they'd be required to list all the actual beneficiaries on every payment, which can't really be done for reasons, so they need to charge many small separate payments. On the other hand, if Patreon is being treated as or claiming to be selling a service (i.e. it takes all your money, and pays it out to authors as a business expense) then that has major tax implications, namely, all the amount (as opposed to just their fees) is their revenue and thus subject to various sales taxes and VAT worldwide. This seems to be the current option, since they're charging VAT on the full amount for EU patrons. It might be plausible that they're currently switching from option 2 to option 1 for financial reasons, and this precludes them from batching in the future.
    - pavel_lishin 9y ago
      > they'd be required to list all the actual beneficiaries on every payment, which can't really be done for reasons How so? If they can list the beneficiaries on the individual payments, why can't they lump them into my single-payment?

rgbrenner 9y ago

This is a pretty terrible excuse. It amounts to: we're overcharging you because we're too lazy to change our billing system. A reasonable change is to make one charge per month for the total you've pledged. The CC charges for $100 would be $3.25. No one would object to $3.25 per $100.

floatingatoll 9y ago
I would not call it "lazy" because that's a direct insult to the human beings, but I have not yet seen a reasonable defense of why they appear to be charging more than Stripe charges them, and encourage folks to seek that when asking Patreon questions about this issue. EDIT: "why they're" -> "why they appear to be"
- rgbrenner 9y ago
  Ok, yes that's fair. I shouldn't say lazy.. they could have an actual reason. but in 15 years of handling cc charges for my business, I can't think of a single one.
  - floatingatoll 9y ago
    There's a rumor floating around that Stripe has taken issue with their batching model and that they're being forced to stop batching, which would absolutely justify this change since then Y=X, but I've not been able to find any solid evidence one way or the other about that. EDIT: I filed a support ticket asking if my 2018-Jan charges will be batched or not. We'll see.
    - trowawee 9y ago
      I mean, why wouldn't they say that in the messages they've distributed to creators and patrons, then? If that's the case, they have needlessly caused themselves a tremendous amount of public headache by being disingenuous about the reason behind the change.
    - cjg_ 9y ago

floatingatoll 9y ago

Patreon confirmed that this change is to permit them to stop batching charges period full stop on Twitter, and updated their blog post. https://twitter.com/jackconte/status/938926147085242368 https://twitter.com/jackconte/status/938926147085242368

quadrangle 9y ago
They are being honest. They just aren't admitting why they would stop batching charges. And a large part of the answer is that they are a paywall service more than a donation platform, and everything follows from that.