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I understand why they need to do something different. It's no mistake that the rule was $0.35 plus a percentage. All the credit card companies that people use
by da_chicken 9y ago
I understand why they need to do something different. It's no mistake that the rule was $0.35 plus a percentage. All the credit card companies that people use to pay with Patreon charge the retailer per transaction regardless of the size, and it's usually $0.20 to $0.35 plus a percentage; debit cards can be as high as $0.50 plus a percentage. That has to be the motivation for this. So the first $1 you give is only like $0.65, and that's just the payment processing fee. It also costs money to transfer the funds to the creator's account , and then Patreon gets 5% of what's left (https://patreon.zendesk.com/hc/en-us/articles/204606125-How-do-you-calculate-fees- https://patreon.zendesk.com/hc/en-us/articles/204606125-How-...). Almost all the money has gone to fees.
Even if you run the charges once a month, this is a fee for each Patron and another fee for each creator. If you're a patron and you're giving just $1 to just one creator, you're probably giving them like $0.10 and Patreon a big fat penny.
This is why so many stores have a minimum transaction amount for credit cards. If they don't do that, they can lose money on fees because the profit margin on what they're selling doesn't even cover the service charge.
- draw_down 9y agoDid that state of affairs change recently somehow? I would imagine it has been that way since Patreon started.
- ufo 9y agoPatreon originally aggregated all payments into a monthly lump transaction to Patreon. The new fee structure is consistent with them desegregating the payments but it is not clear why they would do that. One theory going around is that having individual payments reduces their chargeback rate because the number in the credit card bill matches the individual contributions instead of the lump sum. Another theory going around is that separate payments would allow payments to be immediately sent to the creator instead of waiting until the end of the month. But Patreon hasn't been clear if one of these is the reason or if it was something else.
- da_chicken 9y ago> The new fee structure is consistent with them desegregating the payments but it is not clear why they would do that. From what I've read, the credit card companies are complaining about partial refunds, which apparently occur much more often with Patreon. If I've got 10 creators I'm supporting for $1 each, and I decide I need a refund for one of them, well, Patreon only ran one $10 transaction. Now it's kind of a pain in the ass for the credit card company because I'm telling my credit card company it should be 10 transactions @ $1 and I want to refund $1, but what they see is one $10 transaction.
- tonyhb 9y agoDebit cards are subject to the durbin amendment (https://en.wikipedia.org/wiki/Durbin_amendment https://en.wikipedia.org/wiki/Durbin_amendment) so the fee for these micropayments is $0.21, or $0.22 rounded up. Debit cards have percentage fees formed on the basis of points, or ten thousands of a percentage.
- da_chicken 9y agoAh, that's new since I was involved with it. I stopped working with transactions directly in 2008. Thanks for the info!