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Comment by x0x0 | Hacker News Reader

I think the real answer may be that patreon is, actually, a bad business; and that nobody has cracked microtransactions.

Separately, while Patreon's charging changes seem boneheaded, I'd guess at least a 50% chance that they weren't driven by stupidity but rather by a CFO having a come to jesus conversation with the e-team. Driven by the fact that microtransactions run on a credit card are tough.

Their giant raises make more sense if they were eating a ton of fees in an attempt to hold out for scale where enough people (eg I spend $20-ish/mo on patreon) charge enough money that the 5% covers the processing fees.

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The real answer is that the original core proposition of Patreon was a fairly [b]boring[/b] business. It's a payment processor alongside a smaller hosting business. For most consumers of their platform it's not something they need or intend to interact with that often.

Unfortunately Patreon saw itself as primarily a tech-company able drive interactions via its own platform and capture more value from creators[]. The pandemic - and the ensuing explosion in the number of creators and consumers - fed this illusion further.

Both factors led to an influx of VC money, and now they are stuck trying to make returns against a mostly fictitious valuation.

[] This should have always been a warning sign, the average creator isn't rich, they aren't making bank on things like t-shirts.

Just a little HN editing tip: if you put a backslash before the star like this: '[\*]', it won't disappear and turn the following paragraphs to italics.[*]

[*] Footnote.

Cheers for that.

> nobody has cracked microtransactions

It's hard to agree on this one.

Personal anecdote: In 2010's I worked in a micropayments broker linked with all telecom companies.

The whole thing was: that NSFW creators used a shared SMS shared code (i.e. a SMS number that receives messages for several creators and the code (for instance HNCODE25) was used to move money to a balance account) and for each of the payments that people used to do with them the telecom company got 15% slice, and the rest the telecom moved the money to the broker.

Another point: In Brazil due to the PIX [1] almost all of those payment platforms (Paypal included) are becoming irrelevant because you can generate random tokens that can be hard to trace, and all the payments occur instantaneously giving enough time for withdrawn before any attempt of censorship and or any policy change. [2]

[1] - https://en.wikipedia.org/wiki/Pix_(payment_system) [2] - https://news.ycombinator.com/item?id=19867120 ...

About the article itself, it's surprising to me (and I assume some sort of intentional ignorance here) that even in the current state of technology we do not have a "dumb pipe" payment system as before and we're still relying upon those middle man actors or not-so ergonomic alternatives as P2P crypto.

People like the service that the middle man provides. They may not like the middle man, the fees, etc. but tell someone that "your transactions are not reversible, if you lost your money that sucks I guess, even if we messed up" and they will be happy to pay that transaction fee with another provider instead. Even with the small amounts, you either have to approve each transaction (which leads to another category of scams), or trust someone with access to your account.

If you care about spending just $2/mth and not more... that may not be a risk you wanna take.

> People like the service that the middle man provides. They may not like the middle man, the fees, etc. but tell someone that "your transactions are not reversible, if you lost your money that sucks I guess, even if we messed up" and they will be happy to pay that transaction fee with another provider instead.

This might not be entirely realistic, but the idea of passing that choice on to the end user seems interesting:

  Payment of 12.99 EUR (VAT of X% included) to $vendor for $service, choose one:
  [ ] - regular payment, 0.50 EUR fixed fee
  [ ] - safe™ payment*, 2.00 EUR fixed fee
  * safe™ payments can later be disputed and reversed, if necessary

Or something like that. I mean, regulation aside (this is a thought experiment), I can already choose whether I want to pay extra for tracking for international deliveries and when buying goods, sometimes extended warranty/insurance is offered as an option. Why wouldn't I get the choice whether I want my payments to carry less overhead OR have the protections you'd expect with the "middle man", as a choice within the same payment platform?

You can't give the choice of whether a payment can be disputed to the purchaser. The reason you can't do that is that you have no way to verify that the purchaser is who they claim to be. If you accept payment from a stolen card, it will be reversed, even if the thief checked a box saying "it is impossible to reverse this payment".

I guess some are making that choice for themselves, in the form of using crypto (which then comes with a long list of issues).

Then again, I guess it's also possible to go in the opposite direction and look into additional means of verifying who is making a purchase - over here, we have chips in government issued ID cards which can be used for signing documents, whereas most banks already use a 2FA system with codes (mobile app, not SMS; but also not TOTP, rather issued certs based on a contract with SmartID) for approving access to bank accounts and then another code for confirming orders. It wouldn't be entirely unrealistic to imagine that technology progressing and merging in the decades to come: you can already use the ID cards for signing into everything from government portals, to utility service providers.

PayPal does this with Friends and Family.

Go onto the various scam reddits and see how many people suddenly wish they hadnt listened to the seller and used friends and family instead.

There's no cure for stupid. No matter how many warning labels or hoops you put in front of the potentially dangerous option, someone will hurt themselves with it. That doesn't mean the option shouldn't exist, though.

Under what circumstances can people be banned from PIX?

We do not have the jurisprudence for that, so in principle if a single federal judge establish that you will be banned via your bank blocking your account. If this happens, for sure the Supreme Court will chime in and establish an common understanding and the lower/higher chambers will legislate around it.

Despite of what happen in Brazil politically this is a very serious process that if a judge misjudge that it could open a huge precedent for a lawsuit against the state.

In practice you can't. Nobody required banks to implement this, they certainly didn't go out of their way to build it.

You can still have your bank account blocked by a judge.

I loved Flattr ~10 years ago. You said "I have $40/month" and then these funds were allocated based on which things you flattr'd during the month (there were little buttons on the websites/blogs). Of course you could also say "include this content creator every month".

It was so simple and elegant. As a consumer I had cost control, too. Plus there were no micro-transactions, only one charge to me.

Did you miss Flattr 2.0 - a browser extension looking at your engagement ?

https://news.ycombinator.com/item?id=15557954

I used the original flattr and apparently missed the reboot too. Flattr 1 was dead for too long to carry me over anyway.

There's a 3rd-ish version that stopped promoting the extension and is closer to Patreon but with a set overall rate.

I do not want to support anything that optimizes for "engagement". It penalized all the really useful offerings that I use for a minute to solve my problem and then don't touch again in a long time and instead encourages addictiveness.

There is no addictiveness here, because the person whose behavior is measured and the one being rewarded for it are two different people.

EDIT : I think what you missed is how this is an issue mostly with advertising-funded websites, especially platforms. More views = more money for the website. (It even goes for Hacker News, somewhat !) But for Flattr 2.0, more/longer browsing doesn't (directly) equal more money (even for the creators, in aggregate) ! Even Patreon has an issue like this - GP is talking about the bundling issue, but Patreon still has an artificial moat that exacerbates this : not only it's annoying to reduce the funding for many other creators at once when you add a new one, you can't even reduce your funding for a specific artist to less than $1/month - regardless of how much you might be paying per month to Patreon in total !

Or are you against free markets ?? They tend to promote what people want and manufacturing wants too, you know ?

Flattr 2.0 of course still has some issues : why a very short music video should be rewarded much less than a long form blog post ? (OtoH the music video is much more likely to be much more popular across a wider variety of people, so I guess that issue is self-fixing ? EDIT: not so much for a poem ?)

The creators are encouraged to create engaging/addicting/long content if that is what causes higher payments. Therefore, I much preferred the original Flattr where I defined which creator was beneficial to me.

I don't think that Flattr2 is more true to a free markets vision than Flattr1. Neither do I believe that a free market is necessarily better than a regulated market. Markets are a highly useful tool, not a goal themselves.

Hmm, good point, but since the extension is open source you could always have decided to disable that part, or even more importantly - reprogram it yourself to whatever definition and weights of engagement that you would like ?

https://github.com/search?q=flattr&type=repositories

(It's also out of control of the creators trying to artificially increase engagement by doing tricks with the Flattr 1.0 buttons on their websites.)

Apologies for linking to GitHub, but that's where the official repository is, so...

I think any Patreon competitor really needs to have a way for people to get access to bonus content when they pay. Even if the content isn't really worth the money, people are more likely to overpay for something they like than make a donation.

Patreon took venture money despite being bootstrapped.

That is behind everyone of their dumb decisions.

They had a great model harvesting nickels and then they sold a vision of Taylor Swift being on Patreon to VCs.

The author starts the article with "take Patreon's lunch money". What lunch? The one VCs fed them? Is Patreon even profitable?

See, this is what immediately turned me off the article.

I don't WANT a payment system that is about beating up other payment systems in the schoolyard and making them cry.

I want a payment system that takes money on my behalf and then pays me with it.

I'll put up with a lot of inefficiency if it's boring and predictable. You're gonna have a heck of a time prying me away from Patreon in favor of your new lunch-money taking payment system with crypto and hookers. If you're leading with 'take their lunch money', I don't trust you.

I don't trust Jack Conte THAT much, but it's sure a lot more than you.

To your point, it's foolish to pick a fight with a grizzly bear (i.e., Patroen). It's smarter to ask: where is there a market not being fulfilled? Then if that goes well enough eventually *maybe* you look to square off with the grizz. But to run into the sprawling plenty of room forest intentionally looking for a gizzly? That's foolish.

Exactly.

The author also dumped on Patreon’s incredibly low processing fee. Who is going to compete with 5% plus payment processing? And they dumped how this processing fee is unsustainable and that the community was mad about changing it.

What business is going to disrupt margins like that? That’s like saying “I’m going to sell stuff cheaper than Costco.” Good luck with that!

FYI Patreon does not offer the 5% deal to new creators anymore. Now it's 8%.

Right, and that is still low.

Sure.

Exactly. Race to the bottom

Why wouldn't it be profitable? All they really do is take money from people, give them to other people, and take a cut of it.

I was under the impression that Patreon is struggling because their profits aren't enough to balance out the 9 digits of VC money they greedily took in, not because there's no profits.

A lot of tech companies are unprofitable due to headcount.

"cracking" microtransactions is trivially simple

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