Patreon’s new payment structure is likely to hurt small creators
Patreon (December 10, 2017) announced a new fee structure, and people aren’t happy. Before the change, pledges were subject to a 5% fee plus payment processing fees, which were anywhere from 2%-10%. Now, instead of the processing fees, the platform makes patrons pay an additional 35 cents plus 2.9% for each pledge made. This adds to the amount of money that patrons are asked to shell out, rather than having the fees come out of the creators’ income.
For Patreon users, this change could impact their funds. The problem is that many creators rely on monthly donations of very small amounts. Some creators fear that patrons who pledge, say, $1 per month, might reconsider if they are asked to pay more. In short, many people who rely on small monthly Patreon pledges believe this change will hurt their businesses. Many have already taken to Twitter to complain about the change.
It’s an especially odd change for Patreon, which attracted users by offering a service that made small, regularly occurring pledges more feasible.
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.
— James a.k.a TPRJones (@TPRJones) December 7, 2017
According to a blog post from Patreon, this new system will, over time, help its users. “While some patrons may leave in the short term, we know this will help creators earn more money in the long term,” the company wrote. (Patreon adds that it did research and tested this new system, and concluded that “many patrons were happy knowing that this change will send more money to creators.”)
Still, the change will likely impact creatives who rely on the platform. The question is: Will they now seek out alternatives?