edit: Also, why is it always a percentage? A transaction is a transaction, independent of the amount. A fixed cost. I'm probably ignorant, but sounds like greed.
Patreon allows you to support 20 creators at $1 each, and only make a single transaction of $20. Not to mention ease of use - it's a lot easier to click "pledge $1" for someone whose content you're enjoying than it is to go sign up for some new service or enter your credit card info. Paypal could offer something similar but they don't. Effectively, the value add is network effects.
As for the flat fee vs % cut, you're probably right - in terms of costs to the business, transaction costs are a flat fee. That said, a crucial part of their model is making it easy to sign up and get a couple of people backing you for a few dollars each. And it therefore makes sense to effectively subsidise your small users by charging more to your large users who can most afford it (and who are getting the most value out of your service).
> Is Patreon still using shared patronage between creators to combine transactions and give creators a break on transaction fees?
> Founding creators will still experience the same reduction in payment processing fees from shared patronage. For future creators we will no longer offer savings for shared patronage because it lacks transparency and it’s not equitable. Some creators save money and some don't, depending on a number of factors including how many patrons you share with others. As a new way to create savings for creators that is more fair and transparent, we are introducing the new low micro-transaction rate for pledges under $3.
I don't understand why they're so bullish on this. They've tried to get rid of the single-transaction model before. I just don't get it. All they're going to do is give more money to paypal, at the expense of the creators and themselves.
How many support requests about this, and arguments that have to get into very specific details on accounts which bring in $40 a month in donations does it take before any gains are lost? Or if not lost, highly variable and cause support personnel staff needs to fluctuate (which I imagine is harder to plan for and scale quickly than hardware/servers)?
The ability to make a single large charge, and then dole out that charge with only your own recordkeeping to track how it got spent seems like it would be ripe for money laundering.
You can strengthen your argument more: When Patreon didn't exist, most creators didn't get any donations, or very minimal ones.
However, the name of the service doesn't particularly have to be "Patreon", and speaking for myself, I'm not finding it a particular problem to be on 3 of them at once, so I don't see Patreon as having much of a moat here. Over the course of the last couple of years it seems like my creators have been somewhat unstable as Patreon has provided multiple reasons for people to seek competitors out. It's far from disastrous but it also hasn't been as smooth as it should be.
As a customer, I have a certain idea of what a well run web app looks like. Patreon never fit that, but I tolerated them because they were the only viable option. As a company, they give me the impression of being half-competent at most. As a customer, I'm champing at the bit for better competitors to come about!
I have foregone donating to a project because they didn't go to Patreon, because the extra hassle was enough that I didn't want to. They noted specifically why they weren't using Patreon even though they got constant requests, and their reasons have merit. But that decision also caused enough friction that I never donated, and I would have been happy to send them money monthly if I didn't feel like it was yet another random monthly transaction that I might forget about that I see years later and wonder why I've been paying.
There will be alternative solutions that exist after Patreon sunsets, simple solutions.
There are alternate solutions that exist now.
The only truly hard part of creating a Patreon clone is getting the approval to accept credit cards, charge them on a recurring basis, and dealing with the red tape around that. Probably the entire rest of the site is comparable to that in complexity. It's not the legendary "replicate in the weekend" project beloved by HN readers, because that whole credit card thing is nontrivial, but it's no "create a new distributed database backend from scratch and pass the Jepsen suite" either.
One-click install of your own wordpress-based paypal-coupled panhandling site.
I don't understand why paypal doesn't just jump on this directly and kill off Patreon though.
> Liberapay currently receives €154.65 per week, they need your help to reach their funding goal (€700.00 per week).
That's only about $9000 USD / year, without accounting for any of the payment processing fees.
Costs are not always marginal. Imagine growing a company to the point of needing to onboard an HR representative or an accountant: the actual cost of the service would increase. But a percentage gives margin to operate.
Also, generally bigger customers generally demand a lot more resources. A percentage seems pretty fair. It also lets small accounts which may not have anything to their name scale up without having to have capital.
I guess they could charge per-transaction, but then again, that would penalize creators who have a lot of low cost patrons. They would also have to nickel and dime on any extra features they offer.
It is not just about Patreon btw.
https://techcrunch.com/wp-content/uploads/2019/03/Patreon-Co...
"Simple" is worth a lot of money to a lot of people. Patreon is simple.
We live in a middleman economy. This forum is a middleman, since HN doesn't actually put out their own content. Uber, Facebook, Google, ... all middlemen.
> Also, why is it always a percentage?
More payouts more risk. Looking at it another way, because people are fine with paying a fee based on percentage.