Patreon cuts deep inside creators’ pockets • Hacker News Board

Re: Patreon cuts deep inside creators’ pockets

#121

Post by generalizations » Sat, Jun 18, 2022, 5:41 PM UTC

jeroenhd wrote: post #36

What I think is something people easily overlook with Patreon and similar platforms is that it's quite hard to make a decent profit on $1 or $5 transactions that most of Patreon's income seems to come from. They're definitely overcharging for more profit, but your margins won't be much lower if you handle payment yourself. Your 3% bank cut to receive money doesn't always work because often there's a minimum fee per t…

I looked into this a while back with PayPal, when I was researching a business that would depend on massive quantities of $1 transactions. At the time (dunno if they still do), PayPal had a separate type of account you could sign up for with a different fee structure for transactions of that magnitude. It was pretty good.

Re: Patreon cuts deep inside creators’ pockets

#122

Post by nvahalik » Sat, Jun 18, 2022, 5:42 PM UTC

pessimizer wrote: post #112

Patreon shouldn't even exist. They're here because government(s) have failed so badly that they haven't put any effort into the infrastructure to trivialize the transfer of its paper between the people holding it. It's as useful a function as highways and the internet, but government failures (that lobbyists pay individuals in government to continue failing at) create room for deeply entrenched trusts paypal to be es…

To be fair there is a lot of non-infrastructure stuff on Patreon. They have been successful.

Re: Patreon cuts deep inside creators’ pockets

#123

Post by mertd » Sat, Jun 18, 2022, 5:46 PM UTC

pessimizer wrote: post #112

Patreon shouldn't even exist. They're here because government(s) have failed so badly that they haven't put any effort into the infrastructure to trivialize the transfer of its paper between the people holding it. It's as useful a function as highways and the internet, but government failures (that lobbyists pay individuals in government to continue failing at) create room for deeply entrenched trusts paypal to be es…

I don't think Patreon's reason to exist is because "sending money p2p is hard".

There is a lot of room for competition though. As a supporter, my loyalty is to the creator not to the platform.

Re: Patreon cuts deep inside creators’ pockets

#124

Post by onlyrealcuzzo » Sat, Jun 18, 2022, 5:48 PM UTC

tpurves wrote: post #105

What many people don't realize is that the operational and customer service costs of payments don't scale with payment amount. Customers will cost almost just as frequently dispute, have questions, have problems, ask for help, attempt to defraud etc with a $1 transaction as they will a $100 or $1000 transaction. This is the real killer with micro payment schemes. Customer service costs scale more with number of payme…

Charge backs should also be less of an issue if the purchase is $1. Same with fraud.

The stakes are lower the lower the amount. Who cares?

It's not worth disputing. Fire the customer if it crosses a threshold.

Re: Patreon cuts deep inside creators’ pockets

#125

Post by stevenjgarner » Sat, Jun 18, 2022, 5:51 PM UTC

So the article criticizes Patreon for having "additional charges for non-US PayPal payments as well as separate currency conversion fees that are mysteriously high at 2.5%", offering donorbox.org as a respite, yet no-where can I seem to find what donorbox charges for non-US PayPal payments and currency conversion?

Re: Patreon cuts deep inside creators’ pockets

#126

Post by cowtools » Sat, Jun 18, 2022, 5:54 PM UTC

mertd wrote: post #123

pessimizer wrote: post #112

Patreon shouldn't even exist. They're here because government(s) have failed so badly that they haven't put any effort into the infrastructure to trivialize the transfer of its paper between the people holding it. It's as useful a function as highways and the internet, but government failures (that lobbyists pay individuals in government to continue failing at) create room for deeply entrenched trusts paypal to be es…

I don't think Patreon's reason to exist is because "sending money p2p is hard". There is a lot of room for competition though. As a supporter, my loyalty is to the creator not to the platform.

>I don't think Patreon's reason to exist is because "sending money p2p is hard".

Why do you think that? Sending money p2p is hard in a world where cryptocurrency is treated like an investment vehicle and not a payment system.

>There is a lot of room for competition though. As a supporter, my loyalty is to the creator not to the platform.

You don't clearly speak on behalf of most users here. "Using multiple platforms" in the fiat/traditional system effectively means giving your credit card information to multiple businesses and increasing your risk for fraud, overcharging and identity theft. It's the reason why these intermediaries like PayPal and Patreon operate in the first place.

Re: Patreon cuts deep inside creators’ pockets

#127

Post by [deleted] » Sat, Jun 18, 2022, 5:55 PM UTC

[deleted]

Re: Patreon cuts deep inside creators’ pockets

#128

Post by armchairhacker » Sat, Jun 18, 2022, 6:00 PM UTC

vzqx wrote: post #84

thayne wrote: post #69

Earlier quoted context omitted.

The solution for this is to have the donation system pool transactions together. Instead of a single transaction for each creator you donate to, you make a payment into a pool that you can then allocate funds from to various recipients. And instead of individual payments to recipients, you send a single lump sum once a month (or if perhaps less frequently if donations are sparse).

This is how Patreon already works - they pool both incoming and outgoing donations for the month into a single transaction to reduce fees. But there are a bunch of donors who only donate $1-$3 a month to a single creator, and these incoming transactions don't benefit from pooling.

You pool the transactions over a longer period. The donor initially gets charged $10, but if they cancel early they will get refunded. Then after a few months they get charged another $10 and so on.

It has drawbacks, like if the person doesn’t have $10 or they complain that they’re being charged. But a) is unlikely since most people who are that poor aren’t donating money, and b) is hopefully unlikely if you make it very clear how the payment system works and that they can get refunded if they cancel early.

Re: Patreon cuts deep inside creators’ pockets

#129

Post by oefrha » Sat, Jun 18, 2022, 6:01 PM UTC

jeroenhd wrote: post #36

What I think is something people easily overlook with Patreon and similar platforms is that it's quite hard to make a decent profit on $1 or $5 transactions that most of Patreon's income seems to come from. They're definitely overcharging for more profit, but your margins won't be much lower if you handle payment yourself. Your 3% bank cut to receive money doesn't always work because often there's a minimum fee per t…

Patreon charges a 5%-12% platform fee on top of any payment processing fee. They’re not footing the bill of 25c or whatever flat fee per transaction, as you seem to imply. They’re not spreading costs.

Whether you’re donating $1000 or $1, Patreon is getting their 8% (or 5%, or 12%).

Re: Patreon cuts deep inside creators’ pockets

#130

Post by JumpCrisscross » Sat, Jun 18, 2022, 6:03 PM UTC

onlyrealcuzzo wrote: post #124

tpurves wrote: post #105

What many people don't realize is that the operational and customer service costs of payments don't scale with payment amount. Customers will cost almost just as frequently dispute, have questions, have problems, ask for help, attempt to defraud etc with a $1 transaction as they will a $100 or $1000 transaction. This is the real killer with micro payment schemes. Customer service costs scale more with number of payme…

Charge backs should also be less of an issue if the purchase is $1. Same with fraud. The stakes are lower the lower the amount. Who cares? It's not worth disputing. Fire the customer if it crosses a threshold.

> stakes are lower the lower the amount. Who cares?

OP mentioned customer service. Pretty much any American can create 50+ hours of customer support and legal work for no reason at all in payments. Even an irate, clueless customer will waste an hour of your support staffs’ time.