"The extra cost isn't tiny if you pledge small amounts to many creators. Pledging $100 to 1 creator will now cost $103.25 which is reasonable. Pledging $1 each to 100 creators will now cost $138 which is not reasonable"
So typically I see two charges per month. They can't charge me $0.35 per charge because the # of charges varies without any ability for the customer to predict and cannot be defended reasonably to customers.
Instead of revamping their billing groupings to ensure that each patron is charged once per month, they are charging $0.35 per creator, which is the absolute worst case scenario here.
So to me, the ripoff is that they charge me for two credit card transactions, but instead of $0.35 per transaction, they charge $0.35 per creator within a single credit transaction - when that $0.35 is not charged to them by their merchant processor for those individual creators.
I would have been fine if they'd simply tell me "X creators = Y transactions @ $0.35 each + 2.9% of amount", where Y is virtually always some tiny fraction of X, but that they instead say "X creators = X transactions @ $0.35 each + 2.9% of amount" to avoid regrouping their billing is a misuse of the word 'transaction' as they implement it.
EDIT: If Patreon has been charging $0.35 per patreon to their creators, then this is not new profit for them, but is instead the same profit now collected from patreons instead of creators. It's still unacceptable to me, because they're charging the worst-case scenario (one transaction, per patreon, per creator) and then optimizing for less than that and not crediting the excess (Y-X) x $0.35 back somehow. If their 5% take isn't enough to cover transaction costs, hiding a profit in (Y-X) x $0.35 is not the correct way to solve that.
EDIT: It's possible that Patreon was censured by Stripe somehow and is going to stop batching charges period full stop come January, and so then Y=X for all cases, at which point this all starts to make a lot more sense.
A reasonable change is to make one charge per month for the total you've pledged. The CC charges for $100 would be $3.25.
No one would object to $3.25 per $100.
EDIT: "why they're" -> "why they appear to be"
EDIT: I filed a support ticket asking if my 2018-Jan charges will be batched or not. We'll see.
https://subfictional.com/my-theory-patreon-doesnt-want-to-be...
If Patreon is being treated as or claiming to be a payment service provider (i.e. it passes money through to authors without owning it in between, the only revenue on their balance sheet is the fee they take) then it'd be wrong to state that Patreon is the beneficiary of a particular payment, since it's not; and they'd be required to list all the actual beneficiaries on every payment, which can't really be done for reasons, so they need to charge many small separate payments.
On the other hand, if Patreon is being treated as or claiming to be selling a service (i.e. it takes all your money, and pays it out to authors as a business expense) then that has major tax implications, namely, all the amount (as opposed to just their fees) is their revenue and thus subject to various sales taxes and VAT worldwide. This seems to be the current option, since they're charging VAT on the full amount for EU patrons.
It might be plausible that they're currently switching from option 2 to option 1 for financial reasons, and this precludes them from batching in the future.
How so? If they can list the beneficiaries on the individual payments, why can't they lump them into my single-payment?
(just a guess)
If you haven't, I would suggest emailing support and noting your case. I think the more people that remind them about backers who back many creators.
I just cancelled most of my lower monthly pledges, but I suppose it doesn't hurt to speak in action _and_ words.
I was watching the train wreck on Twiiter last night and I've seen what Lazy Game Reviews, and others, have witnessed since Patreon announced this change. They back peddled in April, so I'm hoping they'll do so again this time.
Visa has a microtransaction(sub $10) framework where you can roll up 3 auths into one interchange but most processors don't support it.
$0.30 or so per credit card transaction (+ a percentage) is totally expected and what they did until now.
Yeah, from what I understand they are planning to stop that.
So that's the end of patreon as a micro payment platform.
Steam does some something similar with an account balance but I don't think it refills. I believe a lot of businesses have a similar concept. I think you can maintain an account balance at Amazon (and probably other retailers) too.