The chargeback rates might just be higher than the payment processors feel like dealing with.
I’m more than fine with more transactions leaving the traditional credit card system.
Giving Visa a 3% surcharge on the entire economy never felt right
Leaving the only other electronic payment methods as ACH (which is not ideal for most businesses), Paypal, and I don’t know what else.
This is a common myth. The concerted effort that we've seen over the last 5-10 years in particular is the direct consequence of intense lobbying from a handful of groups that are openly backed by or aligned with right-wing religious groups, especially (but not exclusively) evangelicals.
In case you have any doubts about whether "morality" is their motivation, one of the groups was literally called "Morality in Media", before renaming to the more official-sounding National Center on Sexual Exploitation. Despite the new name, they actually don't care very much about "sexual exploitation" as most reasonable people would define the term (such as child abuse) but instead consider all sex work to be "exploitation" and aim to ban legal sex work.
That's why porn stars can't have checking accounts (and then become targets of property theft and violent crime - because the criminals know they are unbankable, so they have piles of cash around.)
Fun fact: the most "Christian" religious states have the highest rates of teen pregnancy, rape, divorce, murder, property crime, etc. Plus christian religious leaders seem to be attracted to child sexual abuse like Elmo is to piles of cocaine.
I feel like maybe one should focus on cleaning up one's own moral house and lead by example before screeching to everyone else that they're going to hell for jerking off to a picture of a naked man or woman on the interwebs.
The religious right knows many of their views are unpopular so they don't act in the open. They find underhanded ways to force their views onto us. Abortion bans wouldn't survive a simple up and down vote in almost any state, yet abortion bans are happening across the country.
The religious right really has their claws into this administration, and the far right has a much larger say in things than it seems like they would based on their proportional representation in the population. Things like gerrymandering and closed primaries don't help.
They do act out in the open! That's why it's so maddening to see how pervasive the belief that this isn't a push from right-wing groups is. They are extremely open about their goals and about their ideological alignment, and they have been at literally every step in the process.
They're telegraphing every single move in real-time. But for some reason, people just don't really want to believe it.
It turns out, the best way to get away with a heinous agenda is not to hide it, but to be completely open and direct about it. If you tell people exactly what they want and it's horrific enough, they will refuse to believe it's true, because nobody would be that cartoonishly villainous, right?
The sex industry isn't the only area where that principle works, although (like with many "technologies") it was one of the first where it was successfully applied.
August 2021: OnlyFans CEO Blames Porn Ban on 'Unfair Actions' of Banks, Media: https://www.pcmag.com/news/onlyfans-ceo-blames-porn-ban-on-u...
April 2024: Japanese Adult content platform DLsite disables Visa/Mastercard payment after attempt to outsmart credit card companies: https://automaton-media.com/en/news/dlsite-disables-visa-mas...
It's not a sudden new thing. The financial theory seems to explain all the facts.
Literally all three of the examples you list were the direct result of lobbying from groups like Exodus Cry and Morality in Media. These campaigns had been in the works for years, and were well-known to people in the industry, who had been sounding the alarm for years.
It's maddening that people not only refuse to listen before the actions come down, but also still refuse to connect the dots even after they happen.
Often times to bank successfully you need large stagnant balances that are semi-frozen, or meaningful collateral.
This becomes problematic through payment provider platforms which other platforms build upon: it's not straightforward to manage these relationships through so many layers of abstractions. It's easier just to ban the industry.
I don't know the specifics of Kickstarter, but I've seen this happen countless times, so it's not difficult to connect the dots.
No, it has nothing to do with chargebacks. It's not even presented that way in their policies when they ban it. They consider it a "brand risk", which is completely different.
There hasn't been sufficient reporting on all the lobbying and back-room dealing.
There has been tons of reporting on this in the industry. It is not hidden. The war on sex work is extremely well-documented, as is the explicit shift in tactics to targeting financial infrastructure as a tactic.
The banking industry shrieks about fraud and chargebacks yet gyms, which are basically the scummiest retail businesses on the planet aside from payday lenders, are allowed to use the ACH system and get direct access to money, not credit - that is a royal pain in the ass to revoke?
So much so that my state has an entire set of laws devoted toward curtailing the gym industry's various shitty cancellation policies? I believe they're even prohibited from requiring ACH payment - they must offer other options.
And what about all the local newspapers that make it impossible to cancel? Or all the made-for-TV product companies?
They are also the groups behind the closure of big porn sites like XTube, the short-lived purge of adult content on OnlyFans (one of the few battles they lost), and the scourge of age verification bills that are sweeping the US, UK, and Europe.
The goal with age verification laws is not to protect minors or fight CSAM (as much as they pretend it is) - it's to make it expensive and difficult to legally serve content that they disapprove of, producing a chilling effect. Note that the content they disapprove of is not limited to pornography, which is why many of these bills have such vague language that can apply to other things like information on abortion, or LGBTQ+ themed material. This is not an accident; the supporters of these policies are quite open about their intention.
> But he was friendly with Mastercard’s then-CEO Ajay Banga, whom he had met through a mutual friend. Ackman texted Banga, providing a link to Kristof’s story with his tweet: “Amex, VISA and MasterCard should immediately withhold payments or withdraw until this is fixed. PayPal has already done so.” (Ackman was unaware that American Express already did not allow its card to be used on adult sites.)
> Banga quickly wrote back: “We’re on it.”
> Then things began to move. Within days, Mastercard announced it had “instructed the financial institutions that connect the site to our network to terminate acceptance” of [PH] charges, saying it had found evidence of illegal activity and was continuing to investigate.
EDIT: The antisemitism in some replies is disgusting and I reject it entirely. This post is about a specific, publicly reported action by one individual, not about any religious or ethnic group. Any attempt to turn this into conspiracy-mongering is bigotry, not analysis. I don’t want that associated with my comment.
Exodus Cry - https://en.wikipedia.org/wiki/Exodus_Cry explicit christian thinktank
Collective Shout - https://en.wikipedia.org/wiki/Collective_Shout not explicitly christian, but mirrors Exodus Cry almost verbatim
Going down the rabbit hole of Financial Censorship also shows a few other bad actor sin this space. https://en.wikipedia.org/wiki/Financial_censorship
FiLiA - https://en.wikipedia.org/wiki/FiLiA hard conservative feminist group, hates transgender
Morality in Media (renamed to "National Center on Sexual Exploitation" to deceive as federal org) - Intersection of Conservatives and Christians, wanting to ban anything their bronze age beliefs indicate are bad.
CATiW - https://en.wikipedia.org/wiki/Coalition_Against_Trafficking_... , another far-conservative anti-trans hate group.
https://stripe.com/ie/resources/more/high-risk-merchant-acco...
it's really asinine how stripe decides what is and what isn't allowed.
(see also: "oh, you linked your stripe to ko-fi? banned forever!" happened to me, it'll happen to you!)
EDIT: I’m kind of sensitive to getting downvotes on a comment. Do the downvoters think this is a high quality article giving a good amount of context for the upstream policy choices? Do the downvoters take me for supporting some kind of decision like this? Do you think I’m just wrong on my understanding of why these policies are made? I’d really encourage you to look into it. Google or chat something like “why do payment processors ban adult content”.
Because it cost more to check that my CC wasn't stolen when I buy NSFW?
Or because there are more chargeback?
The way the policies work, they would either have to use the latter processor for all transactions (which would be prohibitively expensive) or relegate all "adult" content to a completely separate company and domain, which would be a huge pain and expense to operate for something that constitutes a relatively small fraction of their business.
Difference is in fees and licenses. Payment processors that process high risk payments (adult industry, gambling, etc...) have higher fees and need license from governing body (usually a national bank in country where the payment processor is registered). So if you process high risk payments as low risk you will get a fine from governing body and you risk to lose your license. And if you don't have a license for high risk payments you cannot process them.
I don't work there anymore, but I heard they lost SEPA license a couple of years ago because of risky transactions.
Now I am not sure if Visa and Master are forcing payment providers to give up high risk transactions or if they are forcing them to classify all transactions as low/high risk.
This way, there is always a threat of businesses deciding not to do business with you by unaccountable forces.
Visa/Mastercard vs the government itself is bordering on a distinction without a difference.
From the perspective of the average business or person they're both wholly unaccountable.
If you're Kickstarter or some Megacorp, well then it probably just depends which you have more friends in high places.
Also this is why we should work to increase circulation of cryptocurrency. No stupid religious restrictions and stupid political sanctions.
Also why PornHub and OnlyFans are immune to religious lobby?
There's no actual evidence in the article that payment processors made them do it. They actually banned pornography long before this. They just updated the terms to clarify what counted as pornography.
> Also this is why we should work to increase circulation of cryptocurrency.
Cryptocurrency actually does avoid this problem because it doesn't allow chargebacks and the consumer has to foot the bill for transaction fees. Those are also the reasons why consumers don't like it.
> Also why PornHub and OnlyFans are immune to religious lobby?
They're not? They would have the same high risk accounts and include the higher fees into their business model.
Stripe _says_ they will handle these type of payments, but more often than not, within roughly a year of implementation you'll get an email from them kicking you off their platform, no matter how vigilant you were, or even if the things you were selling were more rated R than rated X. Source: my own insider knowledge along with colleagues in the space.
If this problem were as pervasive as people keep saying it is, it would put the merchants out of business long before it would have any noticeable impact on the card brands (Visa, Mastercard) who are typically the ones actually pushing bans like these[0]. Even if the merchant is successful in winning the chargeback, they are the ones who have to pay the fees for it, which means that any business with a predictable and consistently high enough chargeback rate will just stop collecting payments long before the upstream providers care.
A lot of people here don't actually understand how payment processing, risk underwriting, and chargebacks work - which is fair, because it's an arcane area of knowledge that most people don't interact with! But it means that a lot of things which sound like simple and easy explanations are actually completely off base and nonsensical.
[0] I do not have knowledge of the Kickstarter situation specifically, and the article is light on primary-source details, so I am explicitly not commenting on this specific case.
> Also I think it is weird that when someone steals a bank card, they use it to buy adult games instead of buying an iPhone or MacBook and shipping it to the third world country.
iPhone or MacBook purchases are expensive enough to trigger fraud detection reliably. A $19.99 adult content purchase less likely to.
It's not just stolen credit cards, though. Adult content purchases have another problem where purchasers often deny having made the purchase when their significant other finds it on the credit card statement. Shaggy's "It wasn't me" defense.
Ridiculous. People who consume adult content could at least behave like adults.
Combined with prevalence of the suspiciously well standardized "because porn users and gamers chargeback Steam purchases way too often" canned responses, I think it's just an excuse, if not "the" excuse somewhere - like the basis for using incorrect data for internal risk modeling or something like that.
Seriously though, I think the fix here is not who controls it but legislation that codifies when this type of payment deplatforming can (or cannot) be done. Make some carve-outs for smaller processors (e.g. if your church group wants to set up a pr0n-free version of Stripe, go to town)
The driving force is mostly a group of nonprofits and lobbying groups that are backed by right-wing, mostly-but-not-exclusively evangelicals.
Over the last decade, they have successfully laundered their views into the mainstream to the point where many people don't realize how influential they have been in writing all of these laws and policies and driving them across the finish line.
None of this is hidden knowledge - they've been acting out in the open for years, but people have an aversion to acknowledging it, because it's an uncomfortable truth which triggers a great deal of cognitive dissonance.
Theoretically, they could just split out "explicit" vs "normal" risk categories, but there's two top problems there: 1) it's just fundamentally a smaller-yet-way-more-annoying category than the rest of their payments, and 2) tons of your partners (banks etc etc) have blanket-banned for all of the above reasons.
So... here we are.
Sorry, but that's just bullshit. This is nothing more than your standard pseudogovernmental meddling in the "just build your own financial infrastructure" vein, and it's coming from foreign countries this time rather than the US itself (it currently has an administration less hostile to business).
Info on its conservative lobbyist leader, their extreme views and hypocrisies: https://www.reddit.com/r/Steam/s/1FHaaaIs6T
As for why they do it?
Because conservative Christian lobbying is a lucrative grift: https://youtu.be/ms26YefUNds?si=3KLCj1RALES3aKDT
The owner runs a for-profit speaking engagement business alongside the registered charity. Many such people get into right wing politics without necessarily holding real conviction for the causes because it’s an easy way to get lots of money.
It’s kind of like the market for drill music - fans love the stories of gang violence and aura of lawlessness, so artists will exaggerate and pretend or even foment actual violence so the market buys the product they’re looking for regardless of authenticity. The fans form the artists because of what they finance. The result is a product of the fandom more than a reflection of the artists true selves, though it relies on preserving the deception of extreme authenticity.
A similar American lobbyist group is Moms for Liberty. They’re funded by a billionaire and groups like the Heritage Foundation, the ones behind Project 2025.
If you're a processor (payment or otherwise), you have to be absolutely sure there's no CP or non-consensual content on there. The penalty for even one thing to slip through is damning, and they're under extreme pressure to be the gatekeeper on all of this.
That means you have to manually review everything. That means paying someone to sit through and review all sorts of... questionable... media. A lot of work was shipping this off to overseas review farms. And we occasionally hear reports on how degrading and traumatizing this kind of work can be.
So for Visa, Mastercard, et al I think they are more or less chomping at the bit to just be completely out of this genre of businesses.
Some amount of adult comment is CSAM, or otherwise broadly disfavored. Some companies (Pornhub, OnlyFans) are willing to specialize in discriminating between “regular” adult content and the objectionable stuff, and they have payment processors similarly willing to specialize.
Some of that specialization involves being willing to take on political exposure. Mainstream payment processors are unusually exposed to risks like “being dragged in front of Congress” — there are a lot of reasons a politician might want to put pressure on a general financial infrastructure provider. So reducing obvious ways to get embarrassingly dragged in front of Congress is rational.
Kickstarter already banned pornographic content before this. They expanded the rules to include more specifics. That's it. That's the story. Everything else is speculation and anger-mongering.
> While the previous version of the page simply prohibited “Pornographic content,” it now contains some oddly specific restrictions, including, but not limited to, “implied sex acts,” “MILF/DILF” content, “implied nudity,” and anything featuring “female nipples/areolas, genitalia,” and “anuses.” Good heavens, they’ve even banned “buttocks.”
The article quotes some speculation from some other blog that is trying to link this to Elon Musk and Peter Thiel for maximum anger points:
> Why? According to a report by The Daily Cartoonist, Kickstarter may be under pressure from its payment processor, Stripe, which Palantir Chairman Peter Thiel and X proprietor Elon Musk partially own. Kickstarter and Stripe did not immediately respond to a request for comment.
However Stripe actually does service adult content sites. It just falls into a category of high-risk merchants that also includes travel sites, cryptocurrency, gambling, tobacco, and other categories where the chargeback rates are statistically much higher. They will service those sites, but you might have higher fees to compensate for the higher chargeback rates that come with those categories
Source https://stripe.com/ie/resources/more/high-risk-merchant-acco...
https://raineyreitman.com/2024/06/11/transaction-denied-my-u...
Circumventing payment processors bending the knee to puritanical pressure is why God must have created bitcoin.
Maybe I'm trippin.
Mastercard/Visa/Banks don't want legal liability.
You're right that these are connected to FOSTA/SESTA, but you're missing the actual connection.
FOSTA/SESTA were not "well-intentioned". They were the product of lobbying from explicitly religious, anti-sex, anti-pornography groups. Those same groups are behind recent campaigns to require providing government ID to access pornography, to allow attorneys general to prosecute LGBTQ content, and to ban pornography from platforms like Steam and Itch.io.
FOSTA/SESTA have worked exactly as they were intended to! The intention was to make it harder to conduct sex work legally and safely, and they accomplished that goal!
These policies have little to do with FOSTA/SESTA themselves, in that the text of those laws has no bearing here. But those bills were the first big, national victory of these campaigns, and they used that momentum to raise absurd amounts of money to lobby for the other laws mentioned above, and to target financial infrastructure as an easy point of leverage to accomplish their goal of banning pornography across the Internet.
functionmouse•1h ago
Frieren•1h ago
micromacrofoot•54m ago
tbh there's a case to be made that the government should run a payment processor as critical infrastructure
coldacid•49m ago
advisedwang•33m ago