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Comment by netok | Hacker News Reader

Patreon only takes a 5% cut.

That's unsustainable. Patreon is trying to increase their cut. Currently their recommended plan is at 8%: https://www.patreon.com/product/pricing

They make it look like the extra 3% is to build features for their platform, but the VC funding is for that, and other than developing the feature, having tiers doesn't cost them anything. Charging 8% just makes it a bit closer to being sustainable.

How is that unsustainable? What are they spending that money on?

Isn't it only unsustainable for VCs who want 10e50% growth ever three days?

It's unsustainable for handling small payments. Things like fraud detection, customer support, legal and financial services, and credit card chargebacks add up to more than 5%, if it's truly crowdfunding (lots of small contributions). There's a lot of failed startups in the crowdfunding space.

5% is their cut after payment processing, which is another 3% or 5% extra (depending on the size of payment, with smaller payments being more expensive to process).

For a $1 payment, they actually take 20% (10c + 5% + 5%).

I'm aware of that, which is why I didn't mention it in my list. It's about what Stripe charges. The micropayment rate of 5% is effectively lower because its per-transaction fee is $0.10 rather than $0.30. A $3.00 donation would have a $0.25 fee and a $3.01 donation would have a $0.39 fee.

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