Exactly. The total cost is probably over 8% (pretax), which is more than those sketchy check-cashing places charge. It might be worth it if the adoption rate is high enough, but does anyone have personal anecdotes or (better) independent statistics on Patreon adoption and income?

From a business perspective, the processing fee is (I guess) incurred by the payee, so that's unfortunate, but I have difficulty thinking of a reasonable way to avoid that in any case. The 5% service charge that Patreon takes should be be an expense for you, as a business. Then you have to pay for marketing and advertising, so you're not going to walk away with more than 80% of the payment no matter what you do. At least you have the opportunity to directly balance the marketing/sales effort against the income (which is not something you can do if you are trying to sell through an existing sales channel -- they will advertise as much as they want and you will either like it or lump it). Patreon also gives a limited form of marketing by featuring projects in the newsletters they do, so that's a small benefit as well.

As a remote contractor that works in another country, I'm fairly well acquainted with bank charges :-P Most banks will happily charge you 6% for foreign exchange, and then still charge you $20 (plus a percentage) to transfer funds to another bank. It is (information) highway robbery. Like I said, 5% to actually provide a valuable service is refreshing.

P.S. For anyone in Japan, funnel all your money through a personal account in Shin Sei bank. You can thank me later. Not associated with the bank in any way, other than to be enjoying reasonably priced ForEx.

Edit: To answer your question, Tarn Adams has been sustaining about $7K a month from Patreon. He is likely an outlier, though.

I wasn't making some obtuse statement about how money from me was being skimmed, I was commenting how the way they eased the friction of donating has caused me to done monthly to a lot more projects than I normally would, and that's added up over the years to a few hundred dollars of mine making its way to the accounts of people or groups whose services I use or works I consume, and that's a good thing.

Would I be happier if Patreon took a smaller cut? I guess. I don't see 5% at the low-level donations as very significant, given the platform Patreon supplies. Maybe it would be better if they changed to a 4% fee if you were getting over $500/mo in donations, and to 3% if you were getting over $2000/mo. Then again, when you start making that much per month, chances are Patreon is likely working out very well for you, and that 5% might be seen as well worth it?

In the end, as a consumer, it doesn't really matter to me. I'm bullish on the model of Patreon, and I think Patreon seems to execute fairly well on that model from what I can tell. I wouldn't mind if a few producers used Gratipay and I set that up too. I can deal with maybe 2-3 donation aggregators, I just don't want to deal with 10+ individual donation systems.