If you are an creator who relies on Patreon, or a fan that supports your favorite authors or artists through this service, then I have some bad news for you.
Patreon announced on Wednesday that they are changing how they collect their processing fees. They currently charge the fees after collecting the donations, but starting on 18 December they will tack the fees on to the payment from each sponsor.
To make matters worse, Patreon is justifying the increase in cost with the misleading claim that creators will take home 95% of a donation.
In order to continue our mission of funding the creative class, we’re always looking for ways to do what’s best for you - creators.
With that, we’re writing to tell you of a change we’re making so that all Patreon creators take home exactly 95% of every pledge, with no additional fees.
Aside from Patreon’s existing 5% fee, you may notice that your income on Patreon varies because of processing fees every month. Your patrons may not even be aware that you actually take home a lower percentage of their intended pledges because of it. Our goal is to make your paycheck as predictable as possible, so we’re restructuring how these fees are paid.
A new service fee of 2.9% + $0.35 will be paid by patrons for each individual pledge starting on December 18th. This streamlines fees for both creators and patrons to ensure that you pay no more than 5%.
Yeah, that's a load of hogwash, and all it takes is a little math to see through the deception.
I support a number of creators on Patreon. My most common donation is a dollar a month. Under the new setup, creators will get 95 cents while I will be billed $1.38.
Grab a calculator and you'll see that creators are only getting 69% of my money, not the 95% promised by Patreon.
At $2 a month, I will be billed $2.41 while creators get $1.90. Creators are only getting 79% of my money, not the 95% promised by Patreon.
The ratio of fee to donation gets better as the pledge increases, but I don't have a lot of $5 and $10 pledges - I just can't afford them.
Patreon is shifting the cost of pledges from recipients to donors all while claiming that creators are getting 95% of the money. That is simply not true, and to add insult to injury the increase in fees are going straight to Patreon's coffers and not to actually process each payment.
Patreon charges me 38 cents to donate a dollar, when it doesn't actually cost them that much to collect the donation.
The thing is, Patreon collects all of my donations in a single monthly fee. I pay through Paypal, and I was donating enough that Paypal charged between 2% and 5%. (The finance charges are even lower for payments made through a credit card.)
Patreon changed its rules and is going to charge me like each donation is being collected and paid separately when in reality Patreon only collects the money once a month. (It also only pays once a month)
I am being charged transaction fees for transactions that don't exist. This looks and feels like a ripoff, which is why I am not using Patreon any more.
And I'm not the only who is unhappy today.
The general consensus on Twitter is that shifting the fees on to the sponsors is going to effectively kill the lower support tiers as people evaluate whether they can afford the extra fees. As Seanan McGuire pointed out, "It suddenly costs almost as much to support two creators at $1 as it previously cost to support three."
Creators aren't happy, either:
Patreon's FAQ on this change reads very "Isn't it great? No down side here!" but this change is almost certainly going to lead to me shutting down my Patreon account. I'm not interested in gouging my audience in something I don't believe benefits me or them at all.
— Gibson Twist (@GibsonTwist) December 6, 2017
@Patreon you're going to ruin us all by targeting the people who help out creators. It's morally wrong, out of order and disgustingly money hungry.
Selfishly lining your pockets is going to destroy your business.
Get it changed back!
— Cutzy ? (@CutzyGaming) December 7, 2017
@Patreon has made the worst decision ever to penalize patrons for pledging by adding fees to every pledge. Not fair! As a creator I was fine absorbing those fees. I may lose Patrons because of this change.
— lunaKM (@lunaKM) December 7, 2017