Comparison of transaction fees on Patreon and similar services
10 Dec 2017On December 7, Patreon made an announcement about the change in their transaction fee structure. The results as of December 10 speak for themselves:
December 2017 summary: -$29 in pledges, -6 patrons
All leaving patrons marked "I'm not happy with Patreon's features or services." as the reason for leaving, with quotes ranging from:
The billing changes are not great.
to:
Patreon's new fees are unacceptable
In this article, I will explore the currently available methods for supporting sustainable Free Software development and compare their transaction fees.
My experience
My experience taking donations is very short. I announced my fund raising campaign on Patreon in October 2017.
Here's what I collected so far, vs the actual money spent by the contributors:
- 2017-11-01:
$140.42 / $162.50 = 86.41% - 2017-12-01:
$163.05 / $187.50 = 86.96%
The numbers here are using the old Patreon rules that are going away this month.
Real numbers
| method | formula | charged | donated | fee |
|---|---|---|---|---|
| old Patreon | ??? | $1.00 | $0.86 | 14% |
| new Patreon | 7.9% + $0.35 | $1.38 | $0.95 | 31% |
| $2.41 | $1.90 | 21% | ||
| $5.50 | $4.75 | 14% | ||
| OpenCollective | 12.9% + $0.30 | $1.33 | $0.90 | 32% |
| $2.36 | $1.80 | 24% | ||
| $5.45 | $4.50 | 18% | ||
| Flattr | 16.5% | $1.00 | $0.84 | 17% |
| $2.00 | $1.67 | 17% | ||
| $5.00 | $4.18 | 17% | ||
| Liberapay | 0.585% | $1.00 | $0.99 | 1% |
On Patreon
Just like everyone else, I'm not happy with the incoming change to the Patreon fees. But even after the change, it's still a better deal than OpenCollective, which is used quite successfully e.g. by CIDER.
Just to restate the numbers in the table, if all backers give $1 (which is the majority currently, and I actually would generally prefer 5 new $1 backers over 1 new $5 backer), with the old system I get $0.86, while with the new system it's $0.69. That's more than 100% increase in transaction fees.
On OpenCollective
It's more expensive than the new Patreon fees in every category or scenario.
On Flattr
Flattr is in the same bucket as Patreon, except with slightly lower fees currently. Their default plan sounds absolutely ridiculous to me: you install a browser plug-in so that a for-profit corporation can track which websites you visit most often in order to distribute the payments you give them among those websites.
If it were a completely local tool which doesn't upload any data on the internet and instead gives you a monthly report to adjust your donations, it would have been a good enough tool. Maybe with some adjustments for mind-share bubbles, which result in prominent projects getting more rewards than they can handle, while small projects fade away into obscurity without getting a chance. But right now it's completely crazy. Still, if you don't install the plug-in, you can probably still use Flattr and it will work similarly to Patreon.
I made an account, just in case, but I wouldn't recommend going to Flattr unless you're already there, or the first impression it made on me is wrong.
On Paypal
Paypal is OK in a way, since a lot of the time the organizations like Patreon are just middle men on top of Paypal. On the other hand, there's no way to set up recurring donations. And it's harder for me to plan decisions regarding my livelihood if I don't know at least approximately the sum I'll be getting next month.
My account, in case you want to make a lump sum donation: paypal.me/aboabo.
On Bitcoin
Bitcoin is similar to Paypal, except it also:
- has a very bad impact on the environment,
- is a speculative bubble that supports either earning or losing money without actually providing value to the society.
I prefer to stay away from Bitcoin.
Summary
Liberapay sounds almost too good to be true. At the same time, their fees are very realistic, you could almost say optimal, since there are no fees for transfers between members. So you can spend either €20.64 (via card) or €20.12 (via bank wire) to charge €20 into your account and give me €1 per month at no further cost. If you change your mind after one month, you can withdraw your remaining €19 for free if you use a SEPA (Single Euro Payments Area) bank.
If I set out today to set up a service similar to Liberapay, even with my best intentions and the most optimistic expectations, I don't see how a better offer could be made. I recommend anyone who wants to support me to try it out. And, of course, I will report back with real numbers if anything comes out of it.
Thanks to all my patrons for their former and ongoing support. At one point we were at 30% of the monthly goal (25% atm.). This made me very excited and optimistic about the future. Although I'm doing Free Software for almost 5 years now, it's actually 3 years in academia and 2 years in industry. Right now, I'm feeling a burnout looming over the horizon, and I was really hoping to avoid it by spending less time working at for-profit corporations. Any help, either monetary or advice is appreciated. If you're a part of a Software Engineering or a Research collective that makes you feel inspired instead of exhausted in the evening and you have open positions in EU or on remote, have a look at my LinkedIn - maybe we could become colleagues in the future. I'll accept connections from anyone - if you're reading this blog, we probably have a lot in common; and it's always better together.