Because Patreon operates based on credit card/ merchant processing. Where in a credit company (and often third party companies that rent machines and bind multiple credit processors together) makes its nut processing those payments. In the credit card system those processing fees are paid by the merchant. Some of these fees are quite high (Amex). For a debit card/check/bank transfer system there is typically low to no transaction fee for the merchant. And no direct transaction fee for the customer. Because the costs incurred there are covered by the various interests and fees paid to the bank by its customers. And that is the baseline internationally. Basically there are people and things working to move that money from person to person, place to place. That costs money. So some one’s gonna pay something. Swedish banks make that money off their customers, and thus can make the transactions “free” to anyone that can get a direct connection to them. As can my bank. But any entity standing in the middle of the transaction, doing work to make it happen. That isn’t funded by mortgages, and account fees (or the government). Has to charge for that. Or in the case of credit companies can charge for it to make a bit of extra cash.
$.35 per transaction seems a bit high though. Merchant fees typically run on a percentage rate. Or small whole sum amount + percentage. Apparently ~2% on average. Although it ranges by processor/credit company with some working out to up to 10% all said and done (base rate might be 3%, but there’s additional charges incurred by cancellations, bill-backs, third party processing companies who handle it all, rewards programs, points, miles etc). Anyway, works out to a higher proportion of small purchases being eaten up. Which is why you often see minimum purchase sizes from small businesses. $.35 is an absurdly high rate for anything under the $15-$20 mark. And a ridiculously low rate for anything too much above that. With most Patreon commitments being in the $1-$5 range (supposedly), a $.35 charge per dollar is ridiculous. Especially given they used to charge all your $1 commitments as one transaction. Imagine you send $1 to 20 different artists via patreon. Well you’re paying a 35% transaction fee over all. Where as if you pay $20 to one artist its like 1.7%. Assuming the average rate you’d be paying $.40 cents in the first scenario and $.40 in the second.
Unless they’ve got a uniquely bad agreement with a third party merchant processor. Or something is deeply fucked in their banking I do not see how this is a sensible way to handle payment processing costs, even if those costs are internal to Patreon (IE Patreon charging the customer for their costs incurred on handling the funds). That just doesn’t look like passing outside processing costs onto customers. And it doesn’t look like a sensible scheme for covering internal costs.
ETA: Edited repeatedly for clarity. This shit confuses the hell out of me. And I purportedly know how it works.
