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Yeah, all of the other payment processors have settled on somewhere between 2-4% fees to handle fraud. See PayPal. So either Patreon has an order of magnitude

Yeah, all of the other payment processors have settled on somewhere between 2-4% fees to handle fraud. See PayPal. So either Patreon has an order of magnitude more fraud going on or is massively wasteful in its business operations. Probably both.

thathndude 4y ago
Yes, but that 2-4% works when 90% of the range of charges is 10-1000. But with Patreon the nature of its transactions are that 95% are $30 or less.
RHSeeger 4y ago
Or, to look at it another way... All the other payment processors have settled on needing to earn and average $0.50 / transaction in order to make a profit. Then they calculated their average transaction and came up with a 3% (or 2 or 4) being required to make that amount. Then Patreon came up with the same $0.50 / transaction number. However, since their average transaction amount is so much lower, they have to charge a higher number in order to make their target.
xyzzy123 4y ago
Would you say the same of app stores? I think there's a reasonable case to view Patreon as a platform, not a pure payment processor. Patreon is much more exposed to competition than the app stores, which are "protected" by the device duopoly.
wodenokoto 4y ago
Having never paid patronage, I don’t really know, but doesn’t patreon host a lot of content? Or where are all the paid-only content hosted?
- pindab0ter 4y ago
  In my limited experience the Patron only content that Patreon hosts is in the form of blog posts. The actual content is often an unlisted YouTube video or something.
  - Kye 4y ago
    You can upload any number of attachments in any format, and each one can be up to 200MB. There is no limit. I used this to great effect when I still used Patreon to host FLACs of all my music for supporters in zip archives split in 200MB volumes. I replaced it with a simple Ko-fi shop where you can just upload anything up to your 200GB quota (if you're a Gold member): https://ko-fi.com/s/7e9f22c63b https://ko-fi.com/s/7e9f22c63b
unity1001 4y ago
Patreon handles EU VAT and similar digital VAT for its users. Otherwise each and every one of those donations will need to be handled and filed by the creators. To illustrate how bad it can get - in EU VAT, if your yearly sales are over 30,000 Euros (it may even be 10k, I don't know the latest limit), you have to charge your customers/patrons the appropriate tax rate of the country that they are in. And if you don't, you may end up having to deal with the tax authority of that particular country. People take this lightly, but as many are finding out, its serious business. ... And - fraud is not handled by Paypal. Any chargeback, fraud, refund is your responsibility. You can even get your Paypal suspended for those reasons.
- busterarm 4y ago
  And every other payment processor modeled VAT without raising their fees. Your software developers only need to model it once and make updates. You don't have armies of humans dealing with this to necessitate 10-20% fees. And no payment processor or retailer deals with fraud. They all suspend your accounts for chargebacks. The fee is the built in fee to cover _losses due to fraud_, not for "handling" it.

thathndude 4y ago

Yes, but that 2-4% works when 90% of the range of charges is 10-1000. But with Patreon the nature of its transactions are that 95% are $30 or less.

RHSeeger 4y ago

Or, to look at it another way... All the other payment processors have settled on needing to earn and average $0.50 / transaction in order to make a profit. Then they calculated their average transaction and came up with a 3% (or 2 or 4) being required to make that amount. Then Patreon came up with the same $0.50 / transaction number. However, since their average transaction amount is so much lower, they have to charge a higher number in order to make their target.

xyzzy123 4y ago

Would you say the same of app stores? I think there's a reasonable case to view Patreon as a platform, not a pure payment processor. Patreon is much more exposed to competition than the app stores, which are "protected" by the device duopoly.

wodenokoto 4y ago

Having never paid patronage, I don’t really know, but doesn’t patreon host a lot of content? Or where are all the paid-only content hosted?

pindab0ter 4y ago
In my limited experience the Patron only content that Patreon hosts is in the form of blog posts. The actual content is often an unlisted YouTube video or something.
- Kye 4y ago
  You can upload any number of attachments in any format, and each one can be up to 200MB. There is no limit. I used this to great effect when I still used Patreon to host FLACs of all my music for supporters in zip archives split in 200MB volumes. I replaced it with a simple Ko-fi shop where you can just upload anything up to your 200GB quota (if you're a Gold member): https://ko-fi.com/s/7e9f22c63b https://ko-fi.com/s/7e9f22c63b

unity1001 4y ago

Patreon handles EU VAT and similar digital VAT for its users. Otherwise each and every one of those donations will need to be handled and filed by the creators. To illustrate how bad it can get - in EU VAT, if your yearly sales are over 30,000 Euros (it may even be 10k, I don't know the latest limit), you have to charge your customers/patrons the appropriate tax rate of the country that they are in. And if you don't, you may end up having to deal with the tax authority of that particular country. People take this lightly, but as many are finding out, its serious business. ... And - fraud is not handled by Paypal. Any chargeback, fraud, refund is your responsibility. You can even get your Paypal suspended for those reasons.

busterarm 4y ago
And every other payment processor modeled VAT without raising their fees. Your software developers only need to model it once and make updates. You don't have armies of humans dealing with this to necessitate 10-20% fees. And no payment processor or retailer deals with fraud. They all suspend your accounts for chargebacks. The fee is the built in fee to cover _losses due to fraud_, not for "handling" it.