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Patreon cuts deep inside creators’ pockets

thoughts.jatan.space

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Re: Patreon cuts deep inside creators’ pockets

#131

Post by rglullis »

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…

> The crypto bros totally miss the point in understanding this too.

I don't know which "crypto bros" you've been talking to, but as someone who is building a self-hosted payment gateway for crypto [0], the benefits from using crypto are two-fold: it eliminates the chance of fraud and it moves the cost of customer support to the merchant.

Also, once again I will have to repeat that no one sane will try to completely replace the existing payment systems with crypto. Crypto is meant to be an alternative for the cases where the cost of existing processors make the transaction not viable.

[0]: https://hub20.io/

Re: Patreon cuts deep inside creators’ pockets

#132

Post by latchkey »

monkeybutton wrote: post #111
latchkey wrote: post #107

Earlier quoted context omitted.

Depends on the platform I think. I built the one for Kink (NSFW porn) and it did quite well. The stored 'money' was called, Kinks that we held database entries for. People would just buy blocks of $10+ of these tokens (this was long before blockchain) and refresh them as they spent them.

How well did that go with how anti-adult industry the banking industry is?

It was a pain in the ass. The porn industry developed 3rd party systems that would swap between merchant accounts on a whim. When people would put their credit card in, on the back end, it would try multiple accounts until it found one that would take the card and it was all integrated with a whole referral system [1] called NATS that was really sketchy software. It has been many years for me and seeing that they are still in business is kind of crazy really.

[1] https://toomuchmedia.com/

Re: Patreon cuts deep inside creators’ pockets

#133

Post by brendanyounger »

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.

Having run a B2C business with recurring monthly payments around $15, I assure you that fraud goes UP with lower payment amounts. You preferentially attract the worst possible customers who bank with the lowest common denominator banks and they charge back like crazy.

Some choice moments: "Please keep my service on, I only charged back because I needed to make rent this month", "I know that wasn't my card, but that b---- owes me money."

And it's hard to fire these customers because they come back with a different card and fake names. They don't care that they're committing fraud; no one will prosecute them for $10 here, $20 there.

The real promise of crypto is to provide a system with 0% low level fraud like this.

Re: Patreon cuts deep inside creators’ pockets

#134

Post by cowtools »

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…

If it's a micro-payment system then fraud doesn't really matter because the risk per transaction is low. In an ideal crypto payment system there's no double spending and no charge-backs. The only cost in cryptocurrency is per-transaction fees due to limited network bandwidth (which can somewhat be mitigated with multisig setups).

Re: Patreon cuts deep inside creators’ pockets

#136

Post by polski-g »

weberer wrote: post #92
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…

This is something crypto was supposed to fix. And maybe smaller coins did, but transaction costs for BTC and ETH are even higher.

Iota is a way better technology for this sort of thing.

Re: Patreon cuts deep inside creators’ pockets

#137

Post by fartcannon »

krnlpnc wrote: post #86

15% is not a deep cut. That’s a totally a reasonable cost for smoothly running the infrastructure necessary to support a creator with a monthly subscription model.

That's about 10x more that I'd consider reasonable for what is effectly hosting a static website and bulletin board. I think we've all just had our expectations blown out of the water by Steam (and the subsequent app stores).

Re: Patreon cuts deep inside creators’ pockets

#138

Post by cowtools »

brendanyounger wrote: post #133
onlyrealcuzzo wrote: post #124

Earlier quoted context omitted.

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.

Having run a B2C business with recurring monthly payments around $15, I assure you that fraud goes UP with lower payment amounts. You preferentially attract the worst possible customers who bank with the lowest common denominator banks and they charge back like crazy. Some choice moments: "Please keep my service on, I only charged back because I needed to make rent this month", "I know that wasn't my card, but that b…

Well, in crypto there's still non-zero amounts of fraud if the merchant doesn't deliver their goods or if the sender executes double spend attacks. But theoretical double-spend attacks aside, almost all transactions require some minimal level trust between the merchant and the customer regardless of payment system. In this sense, Cryptocurrency doesn't prevent fraud completely but it does severely limit the extent and direction of fraud.

Re: Patreon cuts deep inside creators’ pockets

#139

Post by [deleted] »

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…

[deleted]

Re: Patreon cuts deep inside creators’ pockets

#140

Post by cowtools »

krnlpnc wrote: post #86

15% is not a deep cut. That’s a totally a reasonable cost for smoothly running the infrastructure necessary to support a creator with a monthly subscription model.

No. It's unacceptable that payment systems charge anything more than a fraction of a percent for each transaction. In any well-designed payment system the marginal cost per transaction is minuscule.
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