Payment Problems Create Headaches for Patreon Creators

A pair of seemingly unrelated payment issues are bedeviling Patreon creators and their fans.

As The Verge reported Thursday (Aug. 3), some creators cannot access their earnings due to an issue with a payout provider that began earlier this week.

As this is happening, some subscribers are getting notified that their banks are flagging their payments as fraudulent, leading them to see canceled subscriptions.

Patreon spokesperson Ellen Satterwhite told the Verge the two issues are unrelated, with the creator payout issues stemming from one payment partner and that others are unaffected.

On Twitter, the company said it had temporarily disabled Payoneer payments, one of the methods creators can use to collect their earnings.

Pateron has seen “a slightly higher-than-normal number” of payments being flagged, the Verge report said, though Satterwhite didn’t share how many or comment on what was causing the issues.

“We’re sorry for the inconvenience this may cause creators and their patrons,” Satterwhite said in an email.

As PYMNTS research has found, failed subscription payments can be bad for business. According to the study, “Tracking Failed Payments”, failed payments have a massive impact on the subscription industry and merchants’ relationships with customers.

“In fact, the study notes that a whopping 70% of companies say failed payments negatively impacted their customer churn rates in the last 12 months, such that this issue is far and away the norm rather than the exception in subscription commerce,” PYMNTS wrote.

In addition, many providers see an even more straightforward connection between failed payments and lost subscribers. Fifty percent of the companies surveyed said that they see this problem as a direct cause of customer churn.

And only are failed payments an issue — many providers argue that they are the single greatest challenge when keeping customers. More than 25% of respondents reported seeing failed payments as the largest contributor to customer churn.

Meanwhile, PYMNTS spoke recently with Marie-Elise Droga, head of Fintech at Visa, about why financial institutions need to think of creators as the digital equivalent of tomorrow’s small and medium-sized business (SMB) segment.

“Creators are generally underserved today in their financial lives,” Droga told PYMNTS CEO Karen Webster. “They can’t be looked at through the lens of an individual consumer — this is the fastest growing category of SMBs in the world.”

It’s no longer an opportunity that anybody can afford to ignore, she added, as social commerce is a fast-growing, trillion-dollar-plus industry.