How Patreon Avoids Fraud While Funding the Emerging Creative Class
Throughout history, artists, writers, musicians, and scholars have benefited from the financial support of patrons: wealthy sponsors who paid them to carry out their creative work. Patreon allows today’s creators—from artists, to podcasters, to musicians, to bloggers—to benefit from that same type of relationship.
The membership platform, which provides business tools for creators to connect with subscribers (or “patrons”), was co-founded in 2013 by YouTube musician Jack Conte and his college roommate, Sam Yam. Today, it has over 100,000 monthly active creators, and two million monthly active patrons.
Just as Renaissance art patrons often appear in the paintings they commissioned, Patreon patrons are offered rewards (like early access to content, or behind-the-scenes content) in exchange for various levels of monthly donations. This way, creators can connect with their fans on a more personal level—and, by contributing to a predictable income for their favorite creators, fans can play an active role in ensuring that the art, writing, music, and other content they value continues to be produced.
Jarvis Johnson, an engineering manager on Patreon’s creator acquisition team, describes Patreon’s mission as “to fund the emerging creative class, or get creators paid.” Indeed, with $300 million creator earnings in 2018 alone (and just $12 average monthly patronage, per patron), the platform has allowed creators to double their annual income.
However, Johnson notes, “there are some situations where we wouldn’t want to pay someone, like in the case of fraud.” Since Patreon processes millions of payments each month, identifying fraudulent payments can be a challenge.
In Patreon’s marketplace, fraud might manifest itself as money laundering, or as patrons paying for content using stolen credit cards. “Maybe it’s a creator who is making a very large sum on Patreon from one patron,” Johnson says. “Well, that seems pretty fishy, and that’s an example of a signal. Whenever a user takes a potentially suspicious action on the site, we actually fire off a background task to go investigate that, and AWS’s simple queuing service is what powers that system for us.”
Patreon’s data science team uses Amazon’s Redshift offering as their data warehouse for analyzing signals in data, which helps them catch fraudulent activity. “We run millions of transactions a month,” Johnson says. “You can imagine that causes quite a load on our system, so it’s critical we have something like AWS that can help us easily scale up and down our evaluation systems.”
Of course, it’s possible that these signals might lead to a false positive for fraud, so Patreon is careful to ensure accuracy before denying payment to a creator. “When we’re not sure, we escalate it to our trust and safety teams,” Johnson explains. “The combination of an automated system and a manual system is very important here, because it’s important to maintain trust with creators.”
Fraud probably wasn’t as big an issue for artists and patrons during the Renaissance, but with the right security measures in place, it won’t stop today’s creators from getting paid, either.