This post describes a way to avoid some of the additional fees that Patreon is charging as part of their late-2017 fee change. The process described here is annoying, and is not recommended if there are other platforms that you can support those creators on, like Liberapay. This is just a way to reduce fees when supporting creators on Patreon. If you want, you can jump straight to how it works.

Motivation

I get unreasonably annoyed at credit card fees. We, as an economy, have somehow decided that giving 2.9% + $0.35 to a payment processor every time we pay a merchant is somehow OK. I go out of my way to support cash-only businesses, and businesses that make payment processing fees explicit. A cost that customers never notice paying is a cost that’s hard to reduce.

If there existed a credit card that had 0 rewards, but charged a lower fee to merchants, I would get that card. Since it would be a decision that is strictly against my best financial interests, I would probably be the only one with such a card.

When I heard that Patreon was changing their fee structure, I misunderstood what they were doing, and my misunderstanding was great. I thought that Patreon would make the current fees they were paying explicit. Ideally, this would also lead to Patreon including lower-fee payment options, which would be better for creators, marginally better for Patreon, and patrons would fund the actual cost of what they fund. I was ready to have angry arguments on Twitter defending Patreon’s decision to people who would rather have payment processing fees ever-present in the background.

Then my misunderstanding of what they were doing was corrected. They are charging payment processing fees as if they didn’t batch transactions, while they are batching transactions. That’s the worst of both worlds! It pisses off people who would rather not think of processing fees, and it really pisses me off, since I’m now paying extra fees, that Patreon is just pocketing in addition to their 5%. (By the way, I think the work that Patreon is doing is well worth their 5% fee. I would be less mad than I currently am if they just bumped their fee up to 10%, since that would at be transparent.)

The 2.9% is fixed, but now the $0.35 is being added per charge. Since I pledge 7 creators once monthly per-creator, this makes an additional 6 * $0.35 = $2.10 that I have to pay. I pay $31 a month across those 7 creators, so my new total will be $34.35 = $31 * 1.029 + 7 * $0.35. This means that an additional 6.1% of my new total is going toward payment fees. Patreon is more than doubling their fee in my case! And that money isn’t even going toward Patreon. It’s going to unnecessary processing fees. I’m glad I didn’t have those Twitter arguments, because now that I understand the change, I am emphatically against it.

Patreon is now abandoning the monthly-batch charge that made me like them so much. I am fine paying the processing fees once monthly. I am not okay with Patreon intentionally moving to a system that charges additional processing fees, and making me pay those fees. I can see some benefit in Charge Up Front, but the implementation is silly. How about a pro-rated first charge with additional fees, and a batch charge thereafter? How about an option to wait to get rewards until my batch charge rolls around?

Before this change, Patreon had a strong network effect for me. I knew that Patreon had to pay a flat fee for each credit card transaction. Creators were paid out of post-transaction-fee money. If I had the option of paying a creator on Patreon vs. some other service like Drip, I chose Patreon. Since my charges were batched monthly, more of my payment went to the creator if I stayed on Patreon, as opposed to a new charge to a new service. This made it easier for me to “tip” low amounts of money, knowing that my flat costs were covered, and it was just 2.9% + Patreon’s 5% that were being deducted.

Now there’s no network effect. I will be shopping around and encouraging creators I support to switch services.

The Algorithm

In order to get around these annoying fees, only make 1 charge on Patreon per month. Rotate which creator you support, and support that creator enough to last until the next rotation.

As an example, I currently support 7 creators, at levels of [$2, $8, $3, $5, $3, $5, $5]. In the first month, I pledge only to creator 0, at a level of $2 * 7 = $14. Next month, creator 1 at $8 * 7 = $56. And so on, at $21, $35, $21, $35, and $35, starting the cycle again. Note that the list above is ordered so that I don’t have a bunch of high-pledging months in a row, and stay close to my long-term average in the short-term.

This doesn’t work for per-creation pledges, which I tend to avoid. I pledge a monthly amount at a maximum of 1 creation per month on creators which as a per-creation rate. (Yes, I realize doing this is kind of a dick move.) Per-creation pledges can be taken into account by counting the total number of creations since the last month that you supported that creator.

This solves the problem of Patreon taking that $0.35 fee more often than they have any right to. If I really cared, I could batch my transactions even more, and only pledge every other month, creating a 14 month cycle.

This “solution” sucks, though. It requires manual intervention by me every month. It only gives me the rewards I’ve paid for occasionally, and gives me way more rewards than I deserve the rest of the time.

Most importantly, it causes instability in the creator’s income. If everyone did this, then creators would have no way of seeing small trends, as their income could flucuate wildly month-to-month, without any change in nominal support. Patron counts would be significantly lower, as I would only count as a patron one month out of 7.

Despite those real drawbacks, I will implement this strategy in my upcoming pledges in 2018. December 2017 is the last month I have before these changes come into effect. To the creators I support, I apologize. I am unwilling to pay additional, unnecessary payment processing fees as part of my support.