Outages on Patreon Impact Creator Payouts

Patreon refers to the problem as “slightly elevated decline rates” but creators say the impact is much bigger.

Creator platform Patreon suffered outages last week that impacted creator payouts. The problem started August 2 and continued for several days, reports Recorded Future News. According to Patreon’s status page, the issue impacted Payoneer payouts, but the platform also disabled Stripe and Hyperwallet payouts for a time.

“We have temporarily paused payouts from (Payoneer) while we resolve the issue. At the same time, an unrelated issue is causing a slightly higher-than-normal number of patron payments to be flagged as fraudulent by their banks,” said Ellen Satterwhite, head of communications at Patreon.

On August 3, a new problem came to light – elevated declines. Patreon said an unrelated issue caused a higher-than-normal number of payments from patrons to be incorrectly flagged as fraudulent by their banks. Patreon said they were working with their partners to resolve the issue.

“We’ve traced the slightly elevated decline rates back to payments infrastructure upgrades required by one of our payment processing partners. Patrons might see some payments declined while changes take effect through the payments ecosystem. If you do: Contact your card issuer to confirm the charge is valid and retry that card, or, if that does not work, try a different payment method. We’re deeply sorry for the inconvenience this causes creators and their patrons,” Patreon reported on their status page.

Cyber News says these are not the only outages of this type. Apparently, there were issues with Patreon’s creator dashboards and receipt of notifications in late July. On July 5, the company reported difficulties processing payments.

Copyright © 2023 Authority Media Network, LLC. All rights reserved. Reproduction without permission is prohibited.

Why this is a big deal

Over 250,000 creators use Patreon as a platform for sharing podcasts, video, audio, music, writing, tutorials, education and more. Creators can offer their patrons memberships which helps fund their work. Patreon’s website says they have more than 8 million monthly active patrons. Patreon takes a cut of the revenue to support the platform and creators. Since Patreon launched in 2013, they have paid $3.5 billion to creators. The revenue share depends on the plan creators choose.

  • Founders plan (for creators who joined before May 2019): 5% of revenue plus payment processing, currency conversion, payout fees and taxes
  • Pro plan: 8% of revenue plus payment processing, currency conversion, payout fees and taxes
  • Premium plan: 12% of revenue plus payment processing, currency conversion, payout fees and taxes

Processing fees are based on the member’s payment method (credit card, Apple Pay, PayPal, Venmo) and amount of the payment. Rates in the table below represent creator processing fees for US creators.

Member’s payment methodMicropayment rateStandard payment rate
Credit Card or Apple Pay5% + $0.10 per transaction for successful payments of $3 or less2.9% + $0.30 per transaction for successful payments over $3
PayPal or Venmo (US)5% + $0.10 per transaction for successful payments of $3 or less2.9% + $0.30 per transaction for successful payments over $3
PayPal or Venmo (non-US)6% + $0.10 per transaction for successful payments of $3 or less3.9% + $0.30 per transaction for successful payments over $3

Patreon creators and their patrons reported their frustration on X (formerly Twitter) and on Reddit. Creators took issue with the word “slight” to describe the problem which caused significantly higher decline rates.

Insider Take

When things are running smoothly at a platform, we don’t often hear about it. But when creator payouts and patron memberships drop, we’re talking about creators’ livelihoods. They need consistent income and smooth payment processing. It sounds like last week created a major problem for some creators and both creators and patrons lost time, money and patience with Patreon last week. This not only impacts creator income, but it will ultimately impact Patreon’s as well. They will lose customers over this. As always, we encourage transparency as a matter of ethics but also to provide the best customer experience possible, whether that customer is a creator or a patron. Patreon could have communicated better with their customers. Not doing so will cost them.

Copyright © 2023 Authority Media Network, LLC. All rights reserved. Reproduction without permission is prohibited.

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