Patreon slammed after pitching fee hike as boon for creators

Update: Patreon changed its mind.

Patreon is to lower its percentage but apply a 35c fee to every transaction, according to a confusing announcement that's thrown the funding site's userbase into chaos. It sounds good for the platform's stars, but ruinous for creators dependent on dollar pledges.

The crowdfunding platform for artists currently takes a fee of 5% (creators also pay fees charged by payment processors like Stripe or PayPal) from each pledge. That changes on December 18, when patrons will start paying 2.9% plus 35 cents for each individual pledge, according to Patreon's product update page.

Patreon says the reasoning behind its new policy is to let creators keep a larger cut of each pledge. "With this update, creators will now take home exactly 95% of each pledge with no additional fees," the company explained on its update page.

The 95% applies after the transaction fee, and a lot of the confusion was over whether that thirty-five cents gets eaten by the recipient (who then would get only 60 cents or so) or stacked onto the donor's dollar (thereby making them pay $1.35 or so). The latter is reportedly the case, but either way, the only people benefiting are whoever gets those enormous transaction fees.

From one user: "Patreon has decided to blithely insult the collective intelligence of their clientele with happy talk."

If Patreon finally has to pass on the per-transaction fees that banks impose to its users, that would be understandable. But one breakdown identifies it as a shift mostly to Patreon's own benefit. And whoever there thought they could sell this as rainbows and unicorns made a mistake so obvious maybe it's not a mistake at all. Perhaps it's aimed more at investors or buyers interested in Patreon itself? This would stand to reason, especially given its recent crackdown on adult content.