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Patreon cuts deep inside creators’ pockets

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Re: Patreon cuts deep inside creators’ pockets

#201

Post by cowtools »

ketzo wrote: post #186
cowtools wrote: post #126

Earlier quoted context omitted.

>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"…

This argument totally belies the massive uptick in P2P payment usage on Venmo, CashApp, Zelle, etc

Those systems are proprietary. Once they scoop up a sufficient chunk of market share, they will abuse their networking effects to raise their fees and become less consumer-friendly. You will forever be stuck in the same situation trying to get people to switch to a cheaper, more competitive "underdog" system again and again.

Re: Patreon cuts deep inside creators’ pockets

#202

Post by cowtools »

andreyk wrote: post #197
cowtools wrote: post #126

Earlier quoted context omitted.

>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"…

IMO Patreon exists for creators to create public profile pages on which people can subscribe to support the creator on a recurring basis in return for some perks. It's (IMO) largely succesful on the basis of network effects (once you support one creator on Patreon, the friction to support another is significantly lower). Plenty of creators also have paypal 'tip jars', but I think these are significantly less effectiv…

I think if we had a competitive, cheap and secure-enough micropayments system we could do away with advertisement-based monetization altogether. Creators could host their own videos, blogs, etc. on their own website and just charge a fraction of a cent per pageview or download.

Re: Patreon cuts deep inside creators’ pockets

#203

Post by rglullis »

karpierz wrote: post #190
rglullis wrote: post #170

Earlier quoted context omitted.

How can a customer use a stolen credit card to make payments with crypto? And how does a customer initiate a bogus chargeback on the blockchain?

If credentials are stolen, crypto or otherwise, a scammer can then use those stolen credentials to make a payment. All non-reversible transactions do is put the risk of fraud on the consumer. IE, if you buy anything with crypto and it turns out to be defective, or just not arrive, you have no recourse. You're just out the money.

> if you buy anything with crypto and it turns out to be defective, or just not arrive, you have no recourse.

If you buy something with cash and it turns out to be defective or it is never delivered, are you left with no recourse?

"But online shopping could mean someone from some other part of the world!" yeah, then don't buy with crypto.

> All non-reversible transactions do is put the risk of fraud on the consumer.

"And for everything else, there is Mastercard..."

Yes, the risk goes to the customer. But the point here is that crypto can enable a whole lot of other businesses that don't exist today because of merchant risk.

Patreon "exists", but as TFA shows is stupidly expensive. I have a SaaS that I'd like to charge $0,50/per month. I can not do that because Stripe would eat 80% of it in fees. The minimum payment amount is $5, but from that Stripe still gets 9%!

If crypto payments were normalized (and if scaling solutions get more adopted to reduce tx fees), customers would think "well, if fifty-cent service is a scammer, it will be on reddit already. If it is not, then it is only fifty cents and I can get a lot of karma for it"

Re: Patreon cuts deep inside creators’ pockets

#204

Post by rossdavidh »

Typical credit card fees might be 25 cents/transaction plus 3%. What transaction size would give you the 17% cut that the writer complains about Patreon taking?

.25 + .03x = .17x .25 = .14x x = .25/.14 = 1.79

So, for these numbers (exact rates vary but are in this ballpark), a transaction size of $1.79 will result in a cut of 17%.

There is a non-zero cost per transaction, with any credit card company, with paper checks (built into the cost of the check), with any payment scheme other than "give me the cash in person". The smaller the transaction size, the larger the cost will be as a percentage. The numbers described here seem pretty typical.

Re: Patreon cuts deep inside creators’ pockets

#205

Post by RHSeeger »

busterarm wrote: post #152
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…

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.

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.

Re: Patreon cuts deep inside creators’ pockets

#206

Post by e-clinton »

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 reason to have fees as a percentage vs a flat fee isn’t because costs scale with payment amounts, it’s because it’s a more fair way to levy fees. I can either charge everyone $3/transaction, even if the transaction itself is less than or equal to $3, or I can structure it as a percentage to encourage smaller transactions. If people think Patreon is making a killing with their fee structure, they should build a competitor.

Re: Patreon cuts deep inside creators’ pockets

#208

Post by deadbunny »

fartcannon wrote: post #137
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).

A static website that shows/hides content depending on your subscription level dynamically?

Re: Patreon cuts deep inside creators’ pockets

#209

Post by rglullis »

ribosometronome wrote: post #200
rglullis wrote: post #156

Earlier quoted context omitted.

You are thinking only from the side of a customer, who already has it easy with the existing payment networks. If you are a customer that wants to make a transaction that can be reversed, you go for the credit card. If the value of the transaction is not high enough for you to care (micropayments) or if you rather lose some money but not give away your data, you go for crypto. The problem that crypto can solve is for…

>You are thinking only from the side of a customer, who already has it easy with the existing payment networks. And you're pretending the customer doesn't exist by saying that crypto eliminates the chance for fraud. That's clearly a lie.

Do us a favor: instead of nitpicking to attack something that I never said, please consider the best possible interpretation of an argument.

When I say about eliminating fraud, I mean fraudulent payments. What happens after the transaction is a separate problem, and not one that is meant (or possible) to be solved by crypto.

If you as a customer want more safeguards, then of course it is not recommended and you should use other alternatives.

Re: Patreon cuts deep inside creators’ pockets

#210

Post by owlbynight »

ericvanular wrote: post #79

A solution to this is for creators to make the same move as ecommerce businesses going from Etsy to Shopify. Getting closer to the money and having patrons pay them through their own domain. I believe in this idea so much that I built a solution for creators who want to do exactly that -> https://jetpeak.co

Verification process is insanely intrusive and a non-starter. Good luck, though. Your UI/UX is good.
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