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1. Siderea, Sibylla Bostoniensis (siderea@universeodon.com)'s status on Tuesday, 26-Sep-2023 12:04:54 UTC Siderea, Sibylla Bostoniensis

   in reply to

   If a patron pledges one creator $1 a month, a huge amount of that would be lost to processing charges – either Patreon cuts deep into the creator's share, or they lose money. But – with charge bundling – if a patron pledges 15 creators each $1 a month, the fee stops being so bad, because the $0.30 is only charged once. The fee works out to 2.9% (3¢) plus 2¢ per creator, so each creator's fee on their $1 is only $0.05.

   Fundamentally, charge bundling is what made Patreon able – in so far as it was able, and it's not actually clear they were able – to offer what really was the first functional micropayment system on the internet.

   • Siderea, Sibylla Bostoniensis (siderea@universeodon.com)'s status on Tuesday, 26-Sep-2023 12:04:54 UTC Siderea, Sibylla Bostoniensis

     in reply to

     But even then, you only get to a sweet spot if a given patron pledges enough across different creators. That $14.29 is even WITH bundling.

     From my back of the envelope calculations it looked like Patreon was either losing money on every patron who pledged a total of less than $14.29 a month, or was otherwise struggling financially with low value patrons at some other threshold.

     This is actually a horrendous problem, in light of that datum that the average pledge was less than $2.

   • Siderea, Sibylla Bostoniensis (siderea@universeodon.com)'s status on Tuesday, 26-Sep-2023 12:04:55 UTC Siderea, Sibylla Bostoniensis

     Now they *weren't* trying to keep to 5% – they did in fact charge larger amounts for smaller pledges.

     But the amounts they charged didn't seem remotely as large as they would have had to be to cover those payment processor fees if they were 2.9% plus $0.30.

     But notice how bundling made this more plausible.