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I think it's cute that he thinks someone could build and maintain well all the things he wants for less than 5% in commission and also not pass along processing

by jp57 3y ago

I think it's cute that he thinks someone could build and maintain well all the things he wants for less than 5% in commission and also not pass along processing fees, on what he admits is a micropayment processor. That said, I don't understand the motivation for Patreon's decision to stop bundling payments, unless they're being forced to by issuing banks or payment processors for some reason. EDIT: Thinking about it more, I suspect it has to do with fraud detection and prevention. A site like Patreon is at high risk to be a place to siphon money from stolen cards: Create some fake artists and have a bunch of fake patrons pledge to them using stolen cards. This kind of scam is likely much harder to detect and prevent with bundling, when multiple fake artists can be mixed in with some real ones in a single charge. I think many people don't realize that when an online payment is charged back for fraud, the merchant (Patreon, in this case) is liable for the charges, not the issuing bank. (Well, there are some instances where liability can be shifted to the issuer, but they're not that common.) High chargeback rates can also result in higher fees for the merchant. And of course the effort to detect, prevent, and remediate the fraud has to be paid for out of Patreon's commissions, in addition to everything else.

culi 3y ago
Liberapay is a popular FLOSS alternative that runs solely on people donating to them through their own platform. They make ~$790 a week currently https://liberapay.com/Liberapay/ https://liberapay.com/Liberapay/ Ko-Fi is a proprietary example with 0% donation fees. They make money through a "Gold" offering and through a 5% fee on non-donation income. And they're successful enough to be hiring right now: https://more.ko-fi.com/careers https://more.ko-fi.com/careers
notpachet 3y ago
> I don't understand the motivation for Patreon's decision to stop bundling payments The way I understand it, the motivation is that they're losing money on bundled microtransactions until customers cross some monthly threshold (let's say that's the $14.29 mentioned in the article). So let's say a customer has a $1 monthly subscription to Creator A, and another $1 subscription to Creator B, adding up to a bundled $2 monthly charge to their credit card. That's apparently below the price point where the provider is able to offset the processing fees. Whereas if they have two separate $1 charges, that reduces the loss somehow (I'm not a payment processing expert and I didn't read the fine print that the author posted, so I don't understand exactly why that's the case.) I wonder if the "solution" would be for Patreon to have a minimum subscription model, where each customer is guaranteed to pay, each month, an amount that's above the threshold required for Patreon to avoid a loss on processing fees. You sign up as a patron, and you're automatically dinged $15/mo as long as your account is active. You can choose to route those $15 to whatever creators you want, and you'll see a single line item on your bill. And then obviously you can exceed that threshold if you want to support more creators.
- si1entstill 3y ago
  > Whereas if they have two separate $1 charges, that reduces the loss somehow This is what is being questioned. I've spent several years working in merchant processing, and I've never heard of a billing structured offered by a processor in which it would be advantageous to split charges up. No one understands why Patreon would be losing money by bundling. It could be something with anti-fraud or anti-carding, but I'd have to chew on that a bit more.
- Trung0246 3y ago
  So it sounds like "in-game currency" at this point (from the minimum $15 charge)

by jp57 3y ago

culi 3y ago

Liberapay is a popular FLOSS alternative that runs solely on people donating to them through their own platform. They make ~$790 a week currently https://liberapay.com/Liberapay/ https://liberapay.com/Liberapay/ Ko-Fi is a proprietary example with 0% donation fees. They make money through a "Gold" offering and through a 5% fee on non-donation income. And they're successful enough to be hiring right now: https://more.ko-fi.com/careers https://more.ko-fi.com/careers

notpachet 3y ago

> I don't understand the motivation for Patreon's decision to stop bundling payments The way I understand it, the motivation is that they're losing money on bundled microtransactions until customers cross some monthly threshold (let's say that's the $14.29 mentioned in the article). So let's say a customer has a $1 monthly subscription to Creator A, and another $1 subscription to Creator B, adding up to a bundled $2 monthly charge to their credit card. That's apparently below the price point where the provider is able to offset the processing fees. Whereas if they have two separate $1 charges, that reduces the loss somehow (I'm not a payment processing expert and I didn't read the fine print that the author posted, so I don't understand exactly why that's the case.) I wonder if the "solution" would be for Patreon to have a minimum subscription model, where each customer is guaranteed to pay, each month, an amount that's above the threshold required for Patreon to avoid a loss on processing fees. You sign up as a patron, and you're automatically dinged $15/mo as long as your account is active. You can choose to route those $15 to whatever creators you want, and you'll see a single line item on your bill. And then obviously you can exceed that threshold if you want to support more creators.

si1entstill 3y ago
> Whereas if they have two separate $1 charges, that reduces the loss somehow This is what is being questioned. I've spent several years working in merchant processing, and I've never heard of a billing structured offered by a processor in which it would be advantageous to split charges up. No one understands why Patreon would be losing money by bundling. It could be something with anti-fraud or anti-carding, but I'd have to chew on that a bit more.
Trung0246 3y ago
So it sounds like "in-game currency" at this point (from the minimum $15 charge)