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Patreon Is Suspending Adult Content Creators Because of Its Payment Partners (vice.com)
306 points by cribbles 7 months ago | hide | past | web | favorite | 225 comments

This problem has existed forever. As long as I can remember. The main company that seems to be able to process credit cards for porn is CCBill. They seem to have no real competition other than small fringe services. As soon as those services get big enough it raises flags and they get shut down. How and why CCBill are able to do it while others aren’t I don’t know.

You can sell snake oil on Shopify all day long but sell a JPG with that shows female nipples and it raises flags.

Does anyone know WHY this actually is? I know it’s related to Title 18, Section 2257 somehow, but I don’t understand exactly how, nor why CCBill seems to operate without issue. Can somone with inside knowledge explain?

Porn has come such a long way in the last 10 years. Maybe I’m just more progressive than I realize, but I see stuff like X-Art as actual art and I wish there was something like iTunes for porn.

If someone can explain to be what the legal roadblock is for porn billing and how one might be able to get around it, I’d be the first investor and founder. Seriously. There is so much great pornography out there now I feel like you could actually change the way people think about it and maybe even clean up the industry. It doesn’t have to be a dirty thing you bury under 10 cryptic folders.

I was the CTO of kink.com in the mid-2000s.

My biggest challenge of that time was reliable billing. That said, it wasn't quite as bad as you make it out to be. When you have a long history of low chargebacks you can make some deals, and even then there were a few options. We always had a few processors integrated at any one time because 1) any processor could pull the plug on us with minimal notice and 2) these organizations tended to be technologically inept and their platforms were not reliable.

Some payments we processed through our own merchant account. We tried to get more merchant accounts and were unsuccessful. It's difficult because (IIRC) banks only allow a certain percentage of their total volume to be "high risk" and porn is in that bucket no matter how low your chargeback rate is and how long you've been established. It's something you could probably arbitrage profitably if you were a bank, but by the time you get to be a big enough bank you are bound into the stodgy culture of banking ("ewww porn").

That ship has sailed however; there's not much money in porn anymore. The tube sites have killed the content business; this is a shrinking industry. I agree, the content is better than it ever has been before, and you can get it free... uploaded to tube sites by the very producers themselves, hoping to get exposure.

Thanks for the details.

> That ship has sailed; there’s not much money in porn anymore

That’s interesting, and would be the very reason small creators would move to a patreon backed model. The logic is similar to how youtube and podcast creators diversify to patreon as the platform revenue can’t be counted on.

Also the impact of Patreon’s policy goes beyond porn, to take an extreme example, educational content involving sex in any graphic way would also get banned.

I wonder what happens next. Would moving to direct peer to peer payment with a one to one link between the creator and the “customer” be a workaround ? Then when volumes get big enough there would be ashakedown again ?

While content sites are not doing well, live cams have nowadays quite a high turnover. However all you said regarding merchants and banks is still an issue, payment processors get quite a large chunk of the pie. I’d also add Epoch to the dominant billers besides CCBill.

Hopefully the crypto world will mature in the upcoming years and people will use it for payments. That would help customers stay anonymous and there will be no charge-backs. Sure, we will miss recurring payments but still a win imo.

Source: I’m the CTO of a mid-sized live cam platform.

you *could do recurring payments on Ethereum

Do you process for cam sites inhouse?

My friend owns one such service, he is using Luxemborg based payment facilitator.

Partially yes and /w Epoch.

> The tube sites have killed the content business; this is a shrinking industry. I agree, the content is better than it ever has been before.

Then why is so much porn still being made if there's so little money in it today?

There is actually a really interesting story behind this that was once on HN, I unfortunately can't find it anymore but it has something to do with the following process:

1. New content creator enters market. 2. Content gets uploaded to tube sites constantly, take-downs are intentionally slow and ineffective to make this process as tiresome and inefficient as possible. 3. New creator is eventually forced to upload the content themselves in order to generate leads and collect some revenue although this is very little. 4. This revenue is not and was never planned to be enough for the creator, two options: A. Quality of content and models is reduced in order to reduce costs and remain profitable. B. This does not happen, studio struggles to stay afloat and is forced to sell, it gets acquired by guess who... the parent company of the tube site.

I probably got some things wrong so feel free to correct me!

Jon Ronson's "The Butterfly Effect" covers this quite well. It's free on iTunes and quite an entertaining listen.


Because it's easier to produce?

There is money. But for current players, not disrupters. Ads and paid niche content manes the bulk of it.

Source: work with porn people.

Are you comfortable with sharing what are the main tech stacks in there? PHP, Ruby, Python, something else? Which frameworks?

As an example of something I heard at least a year ago back here in HN: I get it that PHP can be secure and fast but that requires a lot of extra effort and I'd bet most sites don't want their programmers to work more because they will have to pay more?

(I am skeptical if porn sites even keep fulltime programmers on a wage; I'd bet they just hire them periodically.)

...Or am I missing something very obvious here and talking uninformed? I am curious.

I am not asking about site names or anything identifiable; just the tech side of things.

Lots of php mostly. A bit of node. We use python but we are small players.

The fun thing is more about the db. E.g some go full in memory redis while others stay on a good old mysql.

Although, don't let yourself fooled by the poor ui. It doesn't reflect the tech behind, and is now mostly ugly for marketting reasons.

Big sites makes millions and of course have full time dev team. They need to innovate constantly. E.g provide best moments on the player timeline, add face recognition to categorize actors, buff the infra for live cams, etc.

However, very few use the cloud. It's mostly home made. Video streaming is expensive, and you can divide your costs by 10 by avoiding aws and cie.

They are smart for using their own metal. I am still waiting the world at large to recognize the fact that the popular cloud services are not actually cost-efficient at all.

I sometimes wondered if I should try and work in the area; these people seem to constantly have to do stuff better and better which is an appealing aspect for me and keeps me from being bored. And as more and more time passes, I don't care for societal approval. Plus I never viewed porn as a "sin" or whatever.

Thank you.

Also, are you folks open to something newer in terms of stacks? Something much more efficient and fast out of the box, like Go or Erlang/Elixir? Is the legacy too big for a code reorganization to ever be viable?

Even though parent is true, don't get the picture that it's just PHP/MySQL. I've seen and written Lua code on top of Openresty for a custom CDN authorization layer fe. Also Node is getting more and more common.

The problem with Go and the like is that you shoot yourself in the foot regarding recruiting. An exotic tech stack really narrows the already small pool of people willing to work for an adult company.

I understand that the adult companies' hiring pool is even smaller and I recognize it as a legitimate business problem to worry about.

But aren't these companies of the kind that like to nurture employees as a result? Namely good social programs, maybe some free food, some advertise good parties (wtf?) or maybe none of these -- just a promise for job stability and having a friendly and outgoing team and a "family"-like environment overall.

Regarding parties: I watched a video years ago when 2 of an adult site's programmers went to a company party and they were very pampered, including voluntary flirting and sex by some of the porn stars (that was a bit weird but also kind of hot). While as a very happily taken man I don't care about such activities in company parties one bit, this is one of the examples of a smaller community that has tighter bonds and (overly) friendly atmosphere.

I mean, not everybody is obsessed by growth and being able to replace humans as nuts and bolts in a machine, after all.

You might appreciate the Quora answer I wrote about life at Kink.com:


Thanks for the link. Is it possible to contact you via mail to ask a few questions? Thanks again.

Ditto. I'm still curious about other things related to employment at such places.

Thank you, it was an interesting read. Guess it really depends on the company then...

I believe the biggest player is MindGeek and they have a lot of open positions in various locations [0]. Technologies include Go, PHP, .Net, JS (React) and there are lots of DevOps positions too.

[0] https://www.mindgeek.com/careers/

I believe the logic is:

1) Porn (crypto, gambling, etc.) transactions are significantly riskier than other transactions.

2) CC processing involves a long chain of intermediaries.

3) At every step of the chain there's strong pressure upstream for better rates, and strong pressure downstream to ensure the blended payment stream is safer.

So, eventually, someone in the chain gets told "sure, we can give you better rates, but only if you can improve the risk profile of your payment stream". And then they crunch the numbers, and decide it's worth it, knowing they'll lose some volume but hoping they can make it up with better margins. And then the people who churn find one of the remaining partners who hasn't adopted strict policies, and this repeats until all the "dodgy" payments are going through a high-fee chain that can't possibly afford to change their policies, and everyone else is going through a low-fee chain.

If you check CCBill, their "Blue" package that allows adult content runs 10.8% to 14.5%, with a $1,000 yearly "high risk registration fee". And even their normal plan (which doesn't allow adult content) seems to be 5.9% + $0.55 per transaction? Braintree is 2.9% + $0.30; Stripe is the same.

You can see why, eg, Stripe would be happy to leave CCBill to have a virtual monopily on adult transactions: There's not that many of them, they're so risky you'll need to charge absurdly high rates just to cover your costs, and just touching them at all will potentially taint your other transactions in the eyes of your upstream partners, driving up your rates. Conversely, you can see why CCBill will never kick the adult payments off their platform; it's the only thing they have to offer.

Disruptive startups work best when they can start with a niche and then grow from there, but the logic of the financial system makes that very difficult.

> adult transactions: There's not that many of them

I genuinely wonder how true this is. Does anyone know of any stats/data that have been released about it?

Well I certainly don't pay for porn.

And the times my other half sees odd payments on my credit card, she's on the phone claiming chargebacks lickety-split because nobody she knows would pay for porn.

So I have no data to provide on this matter. None at all.

> Well I certainly don't pay for porn.

Quoting from a Finnish crime story:

"People are willing to pay a lot of money for good porn."

"Could be. Too bad nobody's ever seen such a thing."

"My husband would never pay for porn when he has me! Grabs phone to file a chargeback for JOLLYGIRLZ PLC"

"Honey..about that..uh..well..I..ummm.. porn is disgusting!! Thank you dear!"

I'm not aware of concrete stats, but anecdotally the porn industry suffers from extremely low margins caused by, among other things, incredibly pervasive content theft, horrifically low conversion rates, high rates of fraud, high rates of chargebacks, a lot of amateur producers happy to give their content away for free, etc.

Porn consumption is pretty common, but "nobody pays for porn" is a punchline for a reason.

It's obvious why, nobody will process them. /s

Even for people who but lots of it, what percentage of their monthly transaction count will it be?

I seriously doubt this is true. Porn makes up like 20-30% of traffic and searches on the internet.

Even if only 10% of users are paying it would still be a very high number of transactions.

10% of users is unlikely high. Porn has one of the lowest conversion in the online world. It's less than 0,05%. I knew a guy once who ran one of the infamous thumbnails sites and he was struggling keeping afloat although the traffic his site was getting was big.

10% sounds impossibly high to be honest. I would expect something around 0.1%, but I cannot easily find data :(

Crypto currencies is a solution to this problem and not just in porn.

Some of my friends in the biz solely got interested in btc because of this.

We have still only a few customers using them though, so it's not a success yet.

But for those who thing crypto is a solution in search for a problem: there it is.

Cryptocurrencies "solve" the issue by not supporting chargeback. It's not like chargeback is intrinsically tied to Visa and friends, they just realized that overall it was beneficial if the buyer felt more comfortable buying things because they have the peace of mind of being able to chargeback later if they feel they've been scammed.

I often hear lack of chargeback being touted as a feature for cryptocurrencies but it's more like the lack of a feature. It's obviously beneficial if you're in the shoes of the seller but if it's so great then why does chargeback exist in the first place?

Put yourselves in the shoes of a porn buyer, would you really put your billing info on bigtitties.ru if you knew that if they steal your money you have no recourse whatsoever? Also there's now a transaction on an immutable public ledger that might trivially show anybody who cares to look for it that you're buying incest porn online?

I think chargebacks for credit cards are needed, because their model is based on trust. You give your credit card number to the seller und you have to trust that he pulls only the amount he promised he would pull.

For Cryptocurrencies on the other hand, you never give you private key to somebody. You always decide yourself which amount to transfer. No chargeback is needed for this model.

I have an EC-card and chargeback is only available for pull-transactions, not for push-transactions.

> I think chargebacks for credit cards are needed, because their model is based on trust. You give your credit card number to the seller und you have to trust that he pulls only the amount he promised he would pull.

I've initiated chargebacks before, but overwhelmingly it's not because I've been overcharged (that only happened once and, ironically, by a company that subsequently launched an ICO...): It's because I did not receive the product/service, or it wasn't as advertised.

And that is just as much of an issue with crypto.

Keep in mind, in many cases the standard advise to consumers is to use credit, NOT cash, purely to be able to obtain the protections of chargebacks, but cash already has all the advantages you list as meaning chargebacks aren't needed for crypto.

There are many other reasons for chargebacks: Perhaps the product isn't what was advertised or not what the buyer expected. Perhaps the seller doesn't provide the product, either due to fraud, incompetence, or a technical problem. Perhaps there's simply a misunderstanding.

EDIT: Apparently chargeback may be the major issue for porn payment processing:


How is bigtitties.ru going to steal your money if you only send them payment as you consume the content? Chargebacks are very useful for the shipment of physical goods, but not relevant here.

User sends crypto to unlock content. Then the site refuses to give the content, or gives significantly different content.

With a credit card, you'd do a chargeback. With crypto there no protection from dodgy sites.

So, no, not just for physical goods.

This is the problem with HN’s blind hatred for cryptocurrency. People make weird assumptions, not understanding how it works. There are many different micropayment schemes under development or already operational. With these, you can pay per second of content. See spankchain

It literally says on their front page "No Chargebacks".

Apple made a business out of "lack of features". Sometime less is more.

> Crypto currencies is a solution to this problem and not just in porn.

By which you mean, the solution for the high rate of people initiating chargebacks is to just use a payment method which won't let them? I think the underlying problem is that people want to make chargebacks, not that Visa lets them. And if I'm right, then you'd expect to see customers refusing to switch, since from there point of view this isn't the solution to a problem, it's taking a solution away from them.

> We have still only a few customers using them though, so it's not a success yet.

Not a surprise, really, is it?

Charge back in porn are not by honest people. Unless you have worked in the industry you would not have a good idea of the size of the scam phenomenon there. It's way higher than in the regular market.

Sites scaming customers has been solved mostly by communities organising and insta banning bad apples.

The reverse is insolved. And yes, removing a gun will make people mug less.

Why aren't debit card transactions handled separately and differently from credit card transactions? Since they come from a guaranteed fund source, I would think they would make possible a special "no chargebacks permitted" transaction type? I see no way to get people to stop doing chargebacks after they've come down off their sexual arousal inhibition lowering short of widespread social education of a sort nearly guaranteed not to happen, so it'll have to be some solution that simply makes it so people CAN'T unspend the money.

For everything else, there's Bitcoin.

I used to work for a payment processor. Our upstream bank would not allow us to handle any adult content at all. The justification used is that adult content is too risky because of chargeback rates.

Apparently the chargeback rates on adult content is really high. Anecdotally, it makes sense. You buy the nude pics, your husband sees the charge on your card, "I was hacked" boom, chargeback. You buy the nude pics, do the nasty alone in your room, have some regrets once the pressure to do the nasty is gone, try to get a refund, get refused, boom chargeback.

I'm not sure that quite holds up in our post-Pornhub world, where everyone is openly admitting to using porn these days. But banks are conservative (in all the ways) and slow to change.

That's not the real reason (source: used to work in adult).

High chargebacks in high-risk industries are related to three things:

1) The goods are digital and delivered immediately. This means that if I just got a hold of a 100 stolen CC numbers and want to test whether or not they're legit before moving on to physical goods, I'm going to test them out at one such service - which shoots up the CB/refund rate.

2) This also creates a secondary market for illicitly opened accounts / access, which is easy money (and anything else you can imagine down the lane on piracy etc.)

3) Because the margins are so low due to high marketing costs + competition, many sites (especially in the past) would sign the user up to endless recurring billing schemes which are nigh impossible (or costly) to cancel, also driving up the chargeback rate.

Yes this is true. Also most porn subscriptions have "cross-sales" meaning you get signed up to another subscription when you join the first. This leads to higher chargebacks.

I run product for Pornhub Premium, we have a clean, no cross-sale offer and it's very easy to cancel, our chargeback ratio is near 0.

AMA? Would be interesting to hear more.

Seconded for AMA

I always thought this as payment processors optimizing their bussiness model till it's overfitted to "non-porn".

I never worked in porn but I did work with payment and clearance systems from carrier companies a long time ago, think billing customers for SMS messages to specific numbers and then getting clearance for the carrier for the money. The risk of fraud or any kind of weird issue is stupidly higher for porn. Either simple "customer doesn't have the money" fraud or "the police knocks on your door because you got money from X customer" fraud. So maybe you need more people or better systems to deal with it while still being profitable. CCBill charges are huge when compared to other credit card processors.

It's easy to reduce costs and complexity until the easiest solution to keep or improve current margins is don't do porn.

Yeah, it may well be chargebacks, not legal or moral concerns.

I live in New Orleans, which has an unusual concentration of strip clubs. I've heard people who work in them complain that to use a credit card, they require you to let them photograph your ID, make an impression or photo of your card, and have you sign a carbon copied form.

This gives some customers cold enough feet that they head out, but the reason is that people will run up a serious tab with lap dances, champagne and whatever else and then strenuously deny they ever set foot in such an establishment. I'm sure porn has the same problem.

It's pretty gross as far as I'm concerned. There's no legitimate moral distinction between falsely saying you never signed up for (random porn service) and Netflix, or saying you never got a lap dance and saying you never went to the ballet, and people acting differently causes legal businesses with avid customers real harm.

A (former) friend of mine used to work for a very popular porn site. He said that some absurd number of sign-ups were canceled through chargeback, and he figured it was kids signing up to a porn site and then the parents getting the bill at the end of the month. Apparently, he could tell, because genuine users would browse for a bit, download some stuff, but the ones who were more likely to do a chargeback would log in, download much of the site's content in a few days.

I wonder if it might be because of how much free porn there is.

"Paying for porn is stupid. But I just have to have everything of this specific person or fetish, so I'll pay, scrape, then chargeback."

I'm skeptical that it's a lot of kids because I feel like finding free porn is pretty darn easy if you try. Why would they ever bother with all the friction that goes with charging their parents CC?

(Just checked, the top three Googles for "free porn" are sites with a lifetime of free porn)

Yeah, I always felt the idea that it was kids was a bit presumptuous, I think it's more likely to be embarrassed spouses, personally.

Well there are free movies, free music too if you search hard enough. I'm happy not everybody thinks like you because this thinking destroys quality and industries.

I think it's because porn doesn't have so much of a social aspect as movies or music do. So tastes are less regulated by normalization through discussion, which means "movies I can talk about with friends" is an important factor in that industry.

Porn is much more about revealed preferences in isolation.

Almost all "mainstream" porn studios are owned by one company. And they own all the "tube" sites too BTW.

Just a FYI.

A common myth. Mindgeek owns Pornhub, YouPorn, Redtube, Tube8, xtube and Gaytube for tube sites.

They own Brazzers, Digital Playground, Reality Kings, Twistys, Babes, Sean Cody and Men.com for production studios.

There are thousands of tube sites, two of which have more traffic than those mentioned above. There are hundreds of porn studios, many which are more popular than those listed above.

I think it counts when it's a subsidiary of Mindgeek that owns the sites as well. Which is what you will find if you dig into the ownership of most porn sites and studios today.

Not true. I listed the sites that Mindgeek owns above. There are no secret subsidiaries. The porn industry is incredibly competitive, if it wasn't, my job wouldn't be so difficult.

> the ones who were more likely to do a chargeback would log in, download much of the site's content in a few days

I download a lot of that content too (sans the chargeback). I like to have it available locally, even when the internet is down, when the site decides to take a particular video down for whatever reason, or even when my account expires. And paying for it makes it just a little more likely they will continue to produce more of it in the future.

It's the distinction people make with things done while drunk. Sexual arousal markedly reduces a persons inhibitions. Because people see that state of lowered inhibitions as "not themselves", once they're no longer aroused the various anxieties and pressures they function under normally are re-established they see retracting their decision as OK because it's what they would have done "if they were being themselves." It's morally unjustifiable IMO, and smacks of emotional immaturity, but that's where most people are. 'Just because I did it doesn't mean it's something I would do!'

CCBill has a “relationship” with First Data which is a very large payment processor and an acquiring bank.

They are also willing to eat the fines that come with supporting merchants with more than 1% chargeback.

The reason why there aren’t many more of them isn’t morality it’s just very hard to maintain profits in this environment. Patreon will have to pay fines if they have high chargeback rates and those fines are intentionally huge so for them it’s a none-brainer they need to reduce chargeback rates and their adult content creators are likely one of the biggest offenders and even if they are not they are an easy sacrifice to the PCI gods.

Porn buyers preserve their relationships with spouses who notice the charges by denying knowledge of them. Porn transactions are thus exceptionally likely to be treated as fraud, whether or not they actually are. That’s the folk tale, anyway.

Adult content usually sees large volumes of chargebacks. This is because when people are aroused, their inhibitions markedly decline. Because modern people do not see themselves as fundamentally sexual beings, when the arousal has passed they feel regret, shame, or that the person who made the charge "wasn't them" or similar, so they feel no moral reluctance to refuse to pay for the content they enjoyed. It's not really something that can be fixed, the human element of it anyway. What can and should be fixed are payment processors. They are very lightly regulated taxing bodies whose policies are not decided by elected representatives, yet control the majority of our economy. If payment processors wanted to actively override the decisions of the Federal Reserve and set national monetary policy they could do it tomorrow.

It's really pretty absurd how a handful of companies who do nothing but shuffle numbers from one place to another not only charge steep fees for the service, but also manage to charge a percentage of the transaction - as if transferring a bigger number down a wire cost more! In the past there was some sense in that there were liabilities involved, but most all of that has been eliminated and only the fees remain.

I have not tried to do what you describe, but this is my best take:

The problem isn't really the law most of the time: It's how companies are hooked up to the financial system.

The Stripes and Paypals of the world aren't really connected to all the credit card networks directly: There's layers underneath, and one of them is banks that act as intermediaries. These kind of companies start with one bank (say, Wells Fargo), and might expand to more as they want to expand to other parts of the world. Eventually, they might have dozens of banking partners that are part of the transaction processing. Even though this online processors are carrying most of the fraud risk, they still have to adhere to what their baking partners will accept, and pretty much every bank out there will tell them things that they can't sponsor past what is legal, and that almost always includes pornography, drug paraphernalia, medicines and sex toys. The bank will come knocking to their door, and they'll have to say no. This is not just down to banks disliking the businesses for image reasons, but also has to do with risk: The number of stolen credit cards used in those sites, and the amount of disputes on the charges for other reasons is pretty high compared to other lines of business.

Therefore, what you need is to form all your banking relationships with entities that have no problem with you processing cards for porn sites. So you have to find banks that will deal with this companies at all, and then convince them that your fraud protection is good enough, and your pockets deep enough, to take the risk.

The large payment providers have a banking license you can’t really grow without it that’s your hook into the credit card industry.

PayPal, Stripe and the rest are their own https://en.m.wikipedia.org/wiki/Acquiring_bank which means they can process the payment themselves.

I’m not sure how competitive they are but stripe recommends PaymentCloud[1] when they boot you because you’re high risk

[1] https://paymentcloudinc.com

> Maybe I’m just more progressive than I realize, but I see stuff like X-Art as actual art

You can go to a museum and see highly lauded art with nipples in it. But put a picture of that painting online and you're a pornographer.

iTunes for porn

You're the only other person I've seen use this phrase.

If you're serious about working on this, contact me.

There’s never going to be iTunes for porn because micro payments are an unsolved problem. Solve that and you’ll make more mone.

https://spankchain.com/ seems to solve it.

The 2257 is the law requiring proof of age paperwork be kept for adult performers IIRC.

It's the "custodian of record" you MAY see at the beginning of a FakeTaxi or Hospital.

Seems like a pretty good use case for cryptocurrency.

What does progressive have to do with "seeing X-art as art"? Who made that definition?

It isn't about seeing x-rated stuff as art, but rather about the ability to be open about sex. Traditional-minded people are rarely as open about it in my experience.

I'm female. I watch porn. So does my spouse. There is no secret there. If either of us were going to a strip club for whatever reason or visited a prostitute somewhere legal, we can simply tell each other about it knowing the other won't be angry. We can openly discuss folks we are attracted to. We understand that finding others attractive is normal human behavior, and would rather not lie about it.

On the other hand, I've known plenty of women that get angry about men watching porn. I have known plenty of men that won't admit to their wife - this person they claim to trust - that they watch porn or have visited a strip club. There are others that actively protest against porn for whatever reason. In general, you find more "porn is morally wrong!" arguements in conservative environments.

Most sane stance I've seen yet.

"visited a prostitute"

That's pretty fringe...

That in particular is, and hasn't been something that happened. But you know, if either of us want something the other isn't so willing to do, we both understand. Not such a big deal for us - though I do understand where it would be a line for other folks. And that's OK, the main point is to be open about this sort of thing and be able to discuss it without fear of the other being angry. Yes, this has been discussed in my household, more in the theoretical sense because we both have some hesitations about the other person not wanting to be involved or worse, forced by a third, unknown party... even where it is legal. My own main reasoning for wanting such a thing is because I'm bisexual, and there are lots more men available for me than women. Folks have urges and get stuff stuck in their head, after all. Being able to share these thoughts is pretty great.

The rest of it is pretty normal stuff (watching porn, being physically attracted to others), though it is stuff folks tend to not discuss openly.

I am about to go put myself at risk right now with a casual partner. I believe in a another simulation where porn did not exist I’d be snuggled up and listening to some snores of my beautiful wife and newborn. But it exists and grows.

This kind of outcry happens again and again, but nothing ever happens, because it's a niche problem.

Some time ago it was fetlife: https://www.eff.org/deeplinks/2017/03/payment-processors-are...

And maybe of interest: When the EU brought out GDPR, so many people complained about the injustice of one group of governments bringing their laws to the world. For the rest of the world, this is nothing new: The dominance of the US finance sector means that any US law is automatically international law. Visa follows US laws, nobody can exist without taking Visa payments, so everybody follows Visa rules, which means you follow US rules.

In the end, what is allowed is the intersection of behavior that's not penalized in any state of the world.

>In the end, what is allowed is the intersection of behavior that's not penalized in any state of the world.

That is hardly true. We do not follow the rules of Saudi Arabia and Iran. What happens is that the laws of the US and the intersection of local laws are what needs to be followed.

The US is aghast that the EU is a large enough market to actually impact the rules of the global internet, and the laws are different enough that they will hurt the major US players. Now all of a sudden people are seeing why applying national laws to pure cyberspace is a bad idea.

I'm moving into using tor because it feels more like the internet I knew from 1998-2006, slow-ish, unreliable, unpolished, anonymous, ephemeral and private, with all the warts there to see. In short a new network that takes A Declaration of the Independence of Cyberspace seriously.

Fetlife is also the canonical demonstration that cryptocurrencies don't solve these problems.

They tried accepting BTC. Noone used it, even while they were struggling with Visa. They pulled the support citing lack of use.

This isn't true anymore. I just logged on to check, and they support payment by:

* Bitcoin * Bank Transfer (from select countries [0]) * Major brand gift cards * Checks/Cash through the mail * Prepaid Paysafecard * Przlewy24 (Something available to people with a bank account in Poland) * Interac e-Transfer (Something available to people with a bank account in Canada)

[0] US, European (with a SEPA supporting bank), Australia, New Zealand, Dutch (with iDEAL supporting bank), Austria (with EPS supporting bank), Germany (with giropay supporting bank)

No idea about the usage though.

Don't they only accept actual money now, via ACH or debit card payments?

And yet I'm constantly told that European banks make it trivial to transfer money without middlemen like visa. So why not just submit payment that way?

They do. If I have someone's bank details I can transfer for free, instantly. (OK it sometimes takes a few minutes at weekends). There's two issues with ever using that for online payment:

1. There is no mechanism to obtain a refund for a mistake - eg I mistype the account number, someone else gets the money. Banks won't reverse but ask the payee to refund. If they still exist and are willing to cooperate. This is the route used for many, many scams like Microsoft calling because they noticed a fault with your Windows.

2. There is no protection under the Consumer Credit Act to obtain refund in the event the company goes bust or the product is defective and they won't refund. Credit cards have to provide that.

I use it with friends in preference to any other method, especially Paypal though.

With SofortBanking and similar services it is becoming more common to use this to pay online. It eliminates much of the issues you mention.

Sofort are problematic because they a) access your account via credentials that it's against bank ToS to share and b) they scrape and store (and likely sell) transaction data unrelated to the current transaction because they have access to your account.

> If I have someone's bank details I can transfer for free, instantly.

> There is no mechanism to obtain a refund for a mistake

Neither of these is true for SEPA.

You can't "mistype the account number", as it has control digits. I mean, there's a possibility, but it's really slim.

Credit cards definitely have check digits, pretty sure bank accounts don't, though I'm not certain.

Common enough that there's been a fair bit in the media[0] regularly, ever since instant transfers took off, and warnings from the Financial Ombudsman[1].

There's also been stories of people randomly discovering a few thousand appearing in their account and stupidly going out to spend it that day.

[0] First link in results https://www.telegraph.co.uk/personal-banking/current-account... [1] https://www.bbc.com/news/business-22815716

IBANs have check digits. That's been the standard way of representing bank + account number for a few years now.

Maybe internationally, but usually domestically within the country IBANs aren't used, at least in Australia, UK, and United States. Hell, my bank here in the UK doesn't even give me an IBAN.

With SEPA I've been required to use the IBAN even for transfers within Germany. Which isn't all that different, as you only need to remember the two check digits and the order in which the old numbers appear within the IBAN. The UK and other countries that continue to use their own currency are a bit special regarding domestic payments, though:

SEPA does not cover payments in other currencies than the euro. This means that domestic payments in SEPA countries not using euro will continue to use local schemes, but cross border payments will use SEPA and euro against eurozone countries.

But you wouldn't see such a distinction in countries that use the Euro.

You can use IBAN domestically in the SEPA area for EUR account numbers. The banks usually allow the use of bank account numbers too and they then translate them to IBAN, so you don't have to. What's more, account numbers in some countries themselves contain check digits.

A Norwegian bank account number has it, so I guess it depends on the country

Credit cards definitely have check digits, pretty sure bank accounts don't…

My (US) bank issues account number serially. No check digits.

I did that a few times (buying bitcoin) and got my bank account suspended. I was told the other party was suspected of perpetrating fraud, and if I wanted to complete the transaction I'd need to do it in person in a branch.

Getting your bank account suspended is much more painful than a credit card.

As a result, I'm not very interested in executing transactions with random entities out of my bank account.

Because we already do, in some places – e.g. Amazon.de takes wire transfers, so does PayPal in Germany, and so do many/most German online shops.

And even for offline payments, we have in Germany an entirely separate card system based on that.

But you know, network effects and all. Internationally, it’s incredibly hard to buy anything online without a CC. So Germans who order lots online still often have a CC.

Also, getting a hotel reservation is much more painful without CC. Some hotels outright refuse to do a reservation without CC, others will charge a higher rate.

It's only trivial within each country, not across borders.

No, it's pretty trivial for SEPA countries.


Do you know of any problem?

Instant clearing/settlement is in TARGET2 which is the ECB's vision for 2020.

Stupid high fees from uk banks, for example (we're talking a flat ~15€ per transaction)

For SEPA transfers? Are you sure you're not mixing it up with SWIFT transfers?

Like with anything else, you just need to use a provider that doesn't suck.

That was true up to 1/1/2018. Now the transfers take a couple of minutes in most cases. The frustrating thing is that it is now quicker for me to move money between say ABN-Amro in NL and some Polish or Romanian bank than it is to transfer between ABN-Amro in NL and a RABO or ING account in NL.

check out spankchain: https://spankchain.com/

-high speed -prevents this nonsense

Payment for adult content is where Ethereum and similar cryptocurrencies would solve a real problem. Of course tokens (like SpankChain) are not really needed for a solution, one could use ETH directly. The anonymity of transactions could be problematic though...

SpankChain is a very sensible layer on top of Ethereum, allowing workers to bring their reputation and fanbase with them across services and avoid lock-in. This is exactly the kind of thing that makes sense to build on top of Ethereum.

I wish them luck and hope they solve payment processing problems for adult performers once and for all. That said, the only point of a separate token I see is getting them money so they can actually implement the system. From end users' point of view it would be easier if ETH was used directly imho.

Well, if the client is the "end user", then sure. But consider the benefits that the worker gets.

> ... what is allowed is the intersection of behavior that's not penalized in any state of the world.

In a weird way, I think China does this right.

Winnie the Pooh is no longer allowed in China [1]. So they turn it off at the firewall. This is better than say, trying to force all the other companies in the world to comply with some stupid law that China makes up.

While I disagree with China on their use of the firewall to block speech, it's a far better way to do it than to sue Disney to prevent Winnie the Pooh products from coming over into China.

[1] https://www.bbc.com/news/blogs-china-blog-40627855

Look at what China is doing to airlines -- "Say Taiwan is a part of China or we won't let you operate here."

They have essentially the same policy as everyone else -- we'll force you to follow our laws, and if we can't we'll shut you out. Blocking the Winnie the Pooh content is no different. If China made up a large part of the audience of those sites, they would "have to" change.

Ditto GDPR -- you can just ignore it and block Europe if you want, they're not forcing you to do anything.

Edited to Add:

The last time I checked, the US believes that Taiwan is part of China. [1]

China has the stupid laws here. Instead of forcing them onto the rest of the world, they prevent the content from coming into their state.

Likewise GDPR is a "stupid" law, so it's the EU's job to prevent non GDPR sites from coming into Europe, and not Facebook's responsiblity for complying with a stupid law.


> it's the EU's job to prevent non GDPR sites from coming into Europe, and not Facebook's responsiblity for complying with a stupid law.

As the grandparent said, it's not e.g. Facebook's responsibility to comply with the GDPR unless they want to do business in the EU.

To be fair, this article says otherwise:


That article doesn't really say that:

> The organization would have to target a data subject in an EU country. Generic marketing doesn’t count. [...] However, any U.S. company that has identified a market in an EU country and has localized Web content should review their Web operations.

(It's actually a decent article that captures the nuances of GDPR well.)

Until they can't and become bullies like with Taiwan.

I'm actually pretty appalled how easily people point to one or two benefits to the way China handles something while completely ignoring the concessions as evidence of them "doing it right". Never mind these short term benefits are coming at the cost of policies that are an affront to liberty and the modern concept of democracy.

So, I'm going to offer a counter opinion; I do not believe China does this "right". Dumb lawsuits are dumb, but I'm not willing to throw the baby out with the bath water.

I'll be 'that guy'. This is the number one use case for a cryptocurrency in my opinion - a decentralized microtransaction system.

This isn't the first time Patreon has faced these issues and services like PayPal are notorious for closing your account then giving you the finger.

I don't want to give my credit card info to 30 different sites or services or creators I want to support. I don't want a bunch of small recurring charges from different places on my credit card. And most of all, I don't want a service to arbitrarily be able to decide (or have others force their hand as in this case) what I am and am not allowed to support.

I don't think the technology or people are remotely near ready for mainstream adoption yet but it is still the most compelling use case I've seen.

Unfortunately cryptocurrencies like bitcoin are a little ill-suited for automatic recurring payments because one of crypto's big selling points is that the crypto is stored on your computer, not in some bank or other computer, so it can't be easily automatically be taken from you. Of course maybe someone could develop a special type of crypto-currency or wallet system which allows for coin to be stored privately while also able to specify automatic transfers without any action by the user (nor the requirement to keep your computer online).

This sort of thing is, actually, a reasonable use case for things like Ethereum's smart contracts. If there were a standard interface by which revocable "direct debits" could be created against users' wallets, this would be solved.

Except that it needs more thinking about than that, because of questions like "what data source does everything use to agree that 1 month has passed since the last transaction", or "can I revoke a direct debit within a certain time period after the money's left my wallet" combined with "how do I get notified when money leaves my wallet".

There's also the question of whether the ability to just register a monthly standing order with various common clients would be good enough, rather than needing to pull money.

A lot of this is a UX exercise rather than a technical one, to be honest.

Every Ethereum block contains a timestamp which smart contracts can read, so it's trivial to write code that only allows withdrawals in 1 month intervals.

There's no way to revoke a transaction but you could implement a hold so ETH could only be withdrawn from the contract x days after the charge is incurred, within such time the owner could cancel the withdrawal.

As far as notifications are concerned, there are events in Ethereum that you can subscribe to. So for example you could subscribe to a charge event, and go in and dispute it.

> Every Ethereum block contains a timestamp which smart contracts can read, so it's trivial to write code that only allows withdrawals in 1 month intervals

Not disagreeing, just wanted to point out that one needs to be careful with timestamps in Ethereum, as the source of truth is miner. Using timestamps could result in security vulnerabilities.

True if you're being really fine-grained about it, like using the timestamp as the seed of a random number generator.

However, on the scale of a month, the miners aren't going to be able to mess with you. A block stamped with a significantly incorrect timestamp won't be accepted by other miners.

Are you sure about that? I was under the impression that there were no checks whatsoever and it's only a goodwill of miners (and lack of incentive to do otherwise) that provides somewhat accurate time.

On the flip side, I'm sure there are/will be oracles for approx. block time, so this is still a solveable issue.

Here's a spec from 2015:


From the block validation section: "Is block.timestamp <= now + 900 and is block.timestamp >= parent.timestamp?"

(In Solidity, block.timestamp is in seconds, and I think that's a direct translation from the underlying opcode, so I assume it's 900 seconds here.)

I stand corrected - it seems blocks' time must be increasing and must not be more than 15 minutes in the future, according to clocks of validating miners. Thanks, didn't know that!

Yes, but realistically, Ethereum (like every other cryptocurrency) needs a lot more work before it's ready for mainstream usage.

It needs, at a minimum, easy-to-use privacy preserving transactions. Without that, it's a personal-information-leaking nightmare.

> "what data source does everything use to agree that 1 month has passed since the last transaction"

That could easily just be the blockchain itself, by specifying the time in terms of number of blocks.

> "can I revoke a direct debit within a certain time period after the money's left my wallet"

That can be done by having the money first be sent to an escrow where sender could retrieve money with a special key.

Notifications are easy: Email.

Time in terms of number of blocks is likely to drift over the years, isn’t it?

the time will vary around some mean, like a random walk, which might drift significantly over the years. But over a short time won't be off by too much.

In this case, "ill-suited for automatic recurring payments" is arguably a feature and not a bug. The porn industry has a history of shady, abusive practices in this area (though to be fair, these days publications like the New York Times are apparently catching up).

Everybody is catching up. I just found out that my ISP actually subscribed me to an AntiVirus service for 6EUR/month, checked by default on the n-th page of the contract I signed. Even the monthly invoice didn't reveal that, I had to find out from a friend working for the company.

Curious to know what shady practices the NYT is using these days. Honest question.

Cancelling is difficult and requires speaking with a human who will haggle you down to about half price. They are very pleasant and low pressure, but you must talk to them.

Hearst newspapers are more porn-like. They offer subscription periods with bizarre terms (3, 7, or 13 weeks) make it difficult to pay without a credit card, and forget to tell you that certain days count as multiple papers because of some special insert. If you make the mistake of giving them your credit card, you must cancel in a narrow window, and renewals are usually timed to skip credit card cycles so you don’t see a charge every month.

I am a weirdo who actually likes newspapers in paper form, but I gave up on my local paper because of bullshit like this.

Try canceling your NYT account :)

Ha actually I have a funny story about trying to terminate a NYT delivery. A few months after we moved into our home, the previous owners started a NYT weekend subscription. The paper was delivered to our house every weekend, since apparently they just wanted the digital access and didn't care about the physical paper. We didn't want it either, since by the time it arrived in the morning, we had already read the news the night before (We're on PT, and often read news around midnight.)

I had to call the NYT a number of times to get them to cancel, and it was actually easier to just have it put on a months-long "vacation hold," during which time they didn't deliver. Every time the hold ended, I had to call up again and reinstate the hold. Although this was a hassle, it never occurred to me that it would be difficult to cancel if I were the actual subscriber! I thought it was just a pain because I was the recipient, but not the purchaser.

> Of course maybe someone could develop a special type of crypto-currency or wallet system which allows for coin to be stored privately while also able to specify automatic transfers without any action by the user (nor the requirement to keep your computer online).

pre-signed, time-locked transactions?

> the crypto is stored on your computer

Correct me if I'm wrong, but that is not how cryptocurrencies work. The crypto is not stored on your computer. it shouldn't be so hard to set up a revokable recurrent payment with something like ERC-20.

You are correct. Cryptocurrency is never stored on any one computer in a blockchain. It's stored on the blockchain itself (the record of truth). The thing that is stored locally is a private key. That key can be written on a piece of paper or copied to multiple devices. That's the key to your money, and it's spendable from anywhere so long as you have the key.

They can work either way. One can have local clients/wallets, and cloud wallets. Local clients/wallets can be online or offline, and full (directly processing the full blockchain) or lite (relying on servers to work with the blockchain). One can also have exchange accounts, holding both cash and cryptocurrencies.

Yeah, but even a local wallet isn't local. You could write down or memorize the private key and manipulate the funds from a new wallet client on a different machine.

OK, sure, but it's always local to you, unless you choose otherwise. Or get pwned. And yes, I get that the Bitcoin etc exist out there in the P2P blockchain, and that wallets just manipulate it. But the point is that some third party can't take your Bitcoin etc, unless they learn your keys.

You can use Request for this. It's a payment app that uses ETH and 5 other ERC-20 tokens including DAI and soon BTC support as well. YC backed too.


Just read the whitepaper. Seems that the payer has to continuously scan the request network for requests and then the under its own will sends the money. But that means that your wallet has to be online (continuously or at least when the requestor makes the request), and this requirement of having a wallet online and having the wallet be able to automatically send money is the risk which I was pointing out that makes crypto like bitcoin or eth ill-suited for auto recurring payments. The crypto is only as safe as the computer it is on. Also as I hinted at such a scheme would require the computer holding the wallet to be online... So I'm imagining everyone would have to have the coins on a device like a home raspberry or home router or (gasp) on your smartphone you carry around. I guess these problems reduce to computer security problems, and so aren't insurmountable nor are they problems inheirent to crypto.

Honestly the whitepaper talks a little too much about how revolutionary it will be and all the things it could solve without going into enough detail of implementing the solutions.

It depends. If there is a smart contract involved then the smart contract could deduct tokens from the users account automatically. This wouldn't be possible with ETH, but would be possible with a token issued on the Ethereum network.

> ill-suited for automatic recurring payments > on your computer


This is a mostly solved problem. (The subscribee needs to gracefully handle missed or delayed payments, but that's true anywhere. Lack of chargebacks is only a problem if you have really bad wallet security, in which case you have bigger problems. Etc.)

Mechanism aside, it does seem that Patreon etc need new payment processors. I had thought of using Patreon, but there's no way to get paid anonymously. And even if I could manage something ~anonymous with PayPal, I've read too many horror stories to ever trust them.

I use VPS from several providers that accept Bitcoin etc. And I can maintain a cash balance to recover recurring charges. That's OK, for providers that I use routinely.

So as you say, it'd be cool to have third-party payment processors, which are privacy-friendly and content-agnostic. But it's a nontrivial problem. I suppose that it could pay via direct transfer, with site/service/creator-specific accounts to protect against theft, and funding from Bitcoin etc. However, I suspect that only banks can do direct transfers, and starting banks is itself nontrivial.

Censorship resistant money is a nice use case. The lightning network will create microtransactions, I imagine devices negotiating for bandwidth and paying few satoshis for the privilege. Its too bad there is such an energy requirement built into the system, that's my I'm keeping my eye on Chia.

Well, all it takes is for the system to make it impossible to convert crypto to fiat.

Until one day you don’t need to.

How are you going to pay your taxes with crypto?

I thought everyone decided Bitcoin was a store of value, not a transaction currency?

The parent talked about cryptocurrencies, not blockchain, not bitcoin. There is a huge difference.

pardon my ignorance. I though Bitcoin was (is) a cryptocurrency. Can you explain the difference please?

Bitcoin is a cryptocurrency.

Bitcoin is a blockchain.

Not every cryptocurrency is a blockchain

So not every cryptocurrency is Bitcoin

And not every blockchain is Bitcoin

Ah I see. Thanks.

TechCrunch did an interesting piece on this: https://www.engadget.com/2015/12/02/paypal-square-and-big-ba...

The short version: PayPal blames the credit card companies, the credit card companies have nothing to do with it, and looking at court cases seems to indicate that regulations once required financial institutions to consider "reputational risk" but those were ruled unconstitutional a few years ago.

It seems like everyone is sleepwalking into censorship based on entrenched business practices rather than actually making reasoned decisions.

I find this worrying, and for the usual reasons. People would often want to make a living by making money from their craft, but it turns out it's not so simple as finding "the market", one needs a whole load of boilerplate for it too. One such piece of boilerplate is Patreon, and Patreon's boilerplate is payment processors. So it's strange that whenever this topic comes up, people speak of it as if it's just a little issue, when it's not.

Often this idea that "it's their business, so it's their rules" is trotted out, which while of course being technically correct works to shut down any kind of critique of the state of affairs. People rightly or wrongly, depend on such platforms for their livelihood, and it's a shame that, as eurg wrote, nothing happens because it's a niche problem. It doesn't affect the "good guys", because we value their craft more than other crafts.

But it comes down to this - I realise that if I ever wanted to monetise my own artistry, I'd have to use Patreon, and the limitation of what I can post (be that adult content, even the more "disgusting" kinds involving incest or bestiality as they mention) means that my creative output is limited. As such, what I can spend my time on is not only restricted by "the market", but also by Patreon, also by Visa, also by PayPal, also by Mastercard etc. I become self-censored, chilling effects.

I can assure you with full confidence that there's practically no limitation on "disgusting material" that you can sell online, as long as it's legal (which bestiality isn't).

In fact, the farther you push the boundaries, the better chance you will have at making money, assuming there still is an audience for it. There's a platform for almost anything.

Patreon just isn't the place for it and it never was. Patreon isn't even on the radar.

That's not to say you will never run into issues with payment, but your ultimate problem isn't going to be the platforms, it's finding customers.

According to Wikipedia, sale and distribution of zoophilic pornography is legal in a few states, including CA.

>People would often want to make a living by making money from their craft, [...] People rightly or wrongly, depend on such platforms for their livelihood [..] I become self-censored, chilling effects.

oh please, stop making it sound like one artisanal widget maker's livlihood is being destroyed by The System. the truth is that they're producing and selling adult content, which (among other things) is riskier to transact than artisnal beads. the "mainstream" payment processors simply do not want to deal with the hassle, pure and simple. as other commenters have mentioned, there are payment processors that cater to such "high risk" businesses, but they don't come cheap.

Unfortunately you are simply repeating the line I set out to criticise:

>It doesn't affect the "good guys", because we value their craft more than other crafts.

I am not only wanting to criticise the individual payment processors, because I understand the risk of doing business with such things. I want to criticise the whole system in which people must rely upon several centralised services in order to get by with their craft. The fact that such things are difficult to fund is the crux of the issue here, and the point is that it's a sad state of affairs to be in that the alternative options are scarce and expensive/difficult to procure.

But the point is still lost. I will reiterate: people would much rather use their knowledge and skill for a craft than to work a minimum-wage job or even in between jobs; peoples' livelihoods are at stake, and it's disappointing to see a comment along the lines of "just use another service" or justifying the situation as simply being the way the world works. The point is that the world shouldn't work that way, and as soon as we realise that, the sooner we can put pressure in the relevant places to change it. The mere suggestion of alternatives (either in the crowdfunding platform or the payment platform) does nothing to help the people who, even if they could afford to move, would suffer a massive loss in audience and revenue.

>>It doesn't affect the "good guys", because we value their craft more than other crafts.

This is wrong. It's more expensive for very boring reasons; there's more fraud and therefore more risk for the payment processor. This means lower margins or higher prices. It's all actuarial science determining if serving a given market makes business sense. There are plenty of businesses which are this way, see for example flood insurance. High risk thus low margin thus nobody wants that business.

Good guys and bad guys doesn't come into it, and pretending that this is somehow oppression of the poor helpless craftsperson does nothing to help anyone.

I agree with you, and I said as much when I said:

>I am not only wanting to criticise the individual payment processors, because I understand the risk of doing business with such things.

My point is more that we shouldn't be tolerating this kind of behaviour in society, and that people use these justifications (that such business is high risk) to say that this is the way the world works, and there's no way out of that - that's just the way things are. But I reject this line of reasoning, because it is dangerous, it fosters a sense of complacency and not a sense to challenge the way that things are. These kind of crafts are looked down upon, and that stigma goes a long way in justifying what payment processors etc. are currently doing, even if it does appear to be for rational reasons. I very much doubt there would be such a problem on the side of payment processors if there were a large enough outcry about this. But there won't be.

>I want to criticise the whole system in which people must rely upon several centralised services in order to get by with their craft.

It's sad that some people can't earn a living because their "craft" is deemed to high risk by The System, but what's the alternative? That everyone else subsidize their high risk "craft" by paying higher processing fees?

There are dozens of easy alternatives, I can think of several off the top of my head

1. Allow no-chargeback services that must be text-message verified.

2. Accept adult-content payments, but don't release the money until after a chargeback window (e.g. 60 days), thus isolating the credit card from any risk.

3. Pass-on the chargeback rate (I imagine it can't be higher than 20%) to those wishing to do business as a cost-of-business fee.

The fact that these aren't happening to me suggests it's not primarily about money.

I agree that your solutions are obvious; so obvious in fact that I find it highly unlikely that they didn't occur to patreon. What does the likelihood that they thought of these things and didn't do them suggest?

Consider: All of those options require patreon to do significant work to accommodate that business on their platform. All of them also have significant profitability implications for everyone involved. All of them require vigilance to ensure that all content which should be subject to those rules is, and that you have clearly communicated the nuance of which charges are subject to which rules and fees.

Still sound easy? Maybe you should apply for a job there!

>1. Allow no-chargeback services that must be text-message verified.

Doubt this is possible, considering the payment processor and the customer's bank are separate entities. Although 2 factor authentication for credit cards kinda exists in the form of 3d-secure, but even that's really flakey in terms of adoption (merchant, payment processor, banks).

> 2. Accept adult-content payments, but don't release the money until after a chargeback window (e.g. 60 days), thus isolating the credit card from any risk.

chargebacks can be initiated up to 120 days from time of purchase, so that's quite a long waiting time. plus it does nothing to prevent people using stolen credit cards to get stolen content. why pay $50/month to access "patron only" content when you can buy a stolen credit card for $1 and use that instead?

>3. Pass-on the chargeback rate (I imagine it can't be higher than 20%) to those wishing to do business as a cost-of-business fee.

this ignores the fixed chargeback fee ($25?) that merchants get hit with when a chargeback occurs. what will you do when a carder sends all his stolen credit card your way?

finally, doing any of the above costs support reps, engineering time, etc., which only caters to a small % of potential merchants. so you end up with the situation we have today. "mainstream" processors who handle the 99% of non-risky merchants, and a few select payment processors that target the risky 1% niche.

Please do look outside US market. In India two factor authentication via a text message to bank registered mobile number of the customer is mandated by law. Chargebacks here are virtually unheard of, probably most customers here don't even know what a 'chargeback' is.

The US is keeping its banking system primitive intentionally, as the government is hand in glove with greedy banks. Sending money whether to a business or an individual is free in India, for both parties.

Not having a process for chargeback removes buyer protection. This will make people risk averse and only deal with big and trusted companies like Amazon and Flipkart.

But in the US, I give my card to many small businesses knowing that I've chargeback as a tool. The businessess also ensure quality and delivery timing because payment processor is closely monitoring their chargeback rates.

One friend told me that in India, banks can freeze your account without a court order, I am not talking about a loan or credit card default.

Sending money is never free, there is always a cost associated with the activity. So which exact transaction is free?

It took me quite a bit of reading and re-reading to understand the point you are trying to make (at least I think I understand now).

Nobody is owed a living. I wouldn't try to justify this move just like I'm not going to try to justify gravity to you: it just is that way.

How many of the great artists in the history of the world were able to earn money from their art during their lifetimes? It certainly is a more recent phenomenon. The starving artist is not a cliche for no reason.

If you would like to get specific and look to solve a problem I bet many on HN would be willing to help, but simply decrying the state of the world over this seems melodramatic and not worthy of HN.

What is going on here is a blatant market failure. There are people producing content, and people willing to spend enough money on that content to justify its creation. In an ideal market, these transactions would go through, and everyone becomes wealthier.

To be clear, there was a market failure before Patreon entered the scene because there was simply no market for these transactions to take place. But now, Patreon is deliberatly re-introducing that market failure. Further their reason for doing so is a generic excuse of "porn bad for payment processors"; not some specific "we noticed that the porn monetized on our platform results in an unacceptably high level of chargebacks". From the outside, it looks like this is a market failure that has no reason to exist other than institutional bias that is no longer grounded in reality.

The market hasn't failed, it's perfectly possible to sell adult content online, it's just relatively more expensive.

"From the outside, it looks like this is a market failure that has no reason to exist other than institutional bias that is no longer grounded in reality."

I think you're being a bit naive there. Surely those companies would have no objection to tasteful nudity or educational content, but if you want to process actual porn you'll have accept a lot of seriously offensive content that you definitely don't want to directly associate with your brand.

We have a situation where people are are trading money in exchange for goods. Presumably, this is happening because the people spending money value the goods more than the money; and the people selling the goods value the money more than the effort to produce the goods [0]. This means that these trades not happening is, by definition, an inefficiency. By definition, a situation causing an economic inefficiency is a market failure. Unless you are arguing that every transaction Patreon is now blocking will still occur without Patreon, then Patreons decision is causing (or, rather, worsening) a market failure.

Creating an entirely efficient market is a hard problem, so the existence of market failures should not be surprising. But, when we see a clear example of a market failure being introduced, we should question what is the reason, and if there is a way we can avoid it.

[0] Even after the 5% fees Patreon charges. There are also cases where the transaction is not entirely quid-pro-quo (eg. people donating to support the creation of free content), which mucks up the Econ 101 analysis, but I don't think effects the broader point.

It's actually an example of the market mechanism solving the problem, you're just ignoring a few actors here:

The payment processor of Patreon has an interest not to deal with the porn, therefore declines the business.

The payment processor of competing actual porn platforms has a market niche to take exactly that business.

All the middlemen that are required here (for complex reasons) get paid for making it happen.

Nothing is lost, therefore no inefficiency, therefore no failure. The money not spent on one performer through Patreon can instead be spent on any other performer wise enough not to rely on Patreon for payment.

I know what everybody's thinking: visa/mastercard is playing world morality police. But most of the major payment processors have banned certain types of products from being used on their platform[1], some of which obstinately lacks a "moral" reasoning (see: virtual game currency). My guess is that those types of businesses attract a high fraud/chargeback rate, which makes them more expensive to process. It's a risk/benefit trade off, nothing more.

[1] https://stripe.com/gb/prohibited-businesses



Gambling is super high risk compared to porn.

In fact, high risk is just another way in which VISA and MC will squeeze merchants, it doesn't matter to VISA because they pass all of the risk to the merchant anyway.

Can someone explain to me why people and companies even use credit cards? Why not bank transfers? Why credit cards are often in exclusions to other payment methods?

I wanted to support 3blue1brown on Patreon and I can't because I need to have a credit card. Even PayPal requires a credit card.

If I want to have a server on AWS or Google Cloud I need to have a credit card.

Why not prepay trough bank transfer? It's some American thing that is just imposed on Europeans because why not or there are some valid reasons why companies try to force credit cards on me?

As I see it, if I send someone money it's up to me and that person, eventually to a court, to resolve any issues. Why bank can't be a neutral third-party?

To me it seems like a beneficial deal to companies. If they got the money then it's up to them to return them or not, so they are in beneficial, safe position.

Currently I try to somehow go around need for credit cards with virtual credit cards that are prepaid, but it seems like they are banned quite often... E.g. I haven't found a way to do prepaid for Google Cloud, so I can't use it.

Credit cards offer a lot of benefits and cash back (essentially a discount).for bank transfer to compete they’d need to offer the consumer similar fiscounts in lieu of the benefits and cashback.

Some cards can offer 3-5% of the transaction back, on top of a slew of benefits including extended warranty, 90 day accidental damage or theft reimbursement, price protection (a refund if the price changes), return protection (a refund if the store doesn’t accept a return).

Yes, that would explain why customers may want to use, so companies may offer them as an option, but why companies don't offer bank transfers? In Europe we do most of the day to day payments with bank transfers and companies seems to be OK with that.

I offered bank transfers on Instapainting.com but nobody used it. It required logging in with your bank credentials. Other times I’ve seen it you would have to enter your routing and account number, and then wait several business days to verify the transaction from two deposits before they could debit your account.

The user experience is simply not in place by the incjmbent players.

It’s like the adoption of QR codes in China vs US, apple, facebook never baked in native qr code support like they did in WeChat in China. So in China it took off like crazy, but in the US no one used them because no one could (you’d have to find and download a special app).

Apple did this because they were banking on bluetooth beacons instead, but that never took hold either.

Corporate strategy and policies thus are largely to blame for this, and unfortunately it can boil down to a single decision from a C-level that doesn’t know better.

Your company is located in USA and I guess you cater mostly to USA based customers.

I start to suspect that this is partially a cultural thing.

In Poland, my home country, we pay mostly with PayU and DotPay, or direct bank transfer. Many companies even offer templates that one can print and use to pay from a post office :). I have been even using it from time to time as a kid before I had my own bank account. In Belgium almost all payments can be done with Bankcontact. I think some people even consider card payments one with Bankcontact, because I quite often would be asked if I want to pay "with Bankcontact" instead of "with a card". In Netherlands most payments go trough iDeal. Sometimes I also see Sofort, PayPal or PaySafe. PaySafe is a prepaid code for X money that you can buy in a shop :) .

https://www.payu.pl/en http://www.dotpay.pl/ https://www.bancontact.com/en/what-does-bancontact-stand-for https://www.ideal.nl/en/

All of them are some kind of third-party that seems to allow companies to verify immediately that a payment has been done.

In case of Patreon there seems to be a demand for non credit card payments and they even acknowledge that. So, it indeed may boil down to some decision to not invest in that :/ .

https://www.google.com/search?q=patreon+without+credit+card https://patreon.zendesk.com/hc/en-us/articles/115001917686-W...

I've had a PayPal account since the early 2000s and always used a debit card.

they need to make money, you cant charge for bank transfers.

Banks may want to charge for transfers, but companies should not care. If a bank takes profit it's less potential profit for them.

This seems like a great use for cryptocurrency. (Not some weird complicated ICO-backed scheme, just regular payment.)

Whatever the reasoning behind these suspensions, I think it's very rude and unprofessional to simply suspend accounts without giving some warnings and some time for a user to comply. Most of these popular online services, including the tech giants, seem to prefer this rude approach. Not having any reliable human support makes the problem worse. Since you can't provide human support, just give some days to comply and then suspend.

Professionalism would require it to be an actual planned approach and not simply 'hair on fire' behavior in response to the knee-jerk reactions of others.

Until I saw the stock image I was so confused. Adult content creators seems like almost everyone. It's outdated seeming to say it this way. Sexual content creators seems a better option.

"Adult content" or "adult entertainment" is, in US English, exclusively used as a euphemism for pornography.

I recall but I’ve been living in Europe for 6 years and it seems odd now especially when phrased as ‘adult content creators’

Assuming it's in the UK, remember the saying: two countries, divided by a common language :-D

You’re right, it’s the UK.

Somebody a little while ago figured out the most popular Patreon pages, wish I could find it, but I remember there was SO much porn. Not regular porn either but weird japanamation porn, furry porn, you name it. And that‘s probably why Patreon doesn’t have a functional “discovery” feature.

Like I have a songwriting web app almost ready that I think might do well there but without a way for people to discover it through the community what’s the point of using Patreon and not a traditional subscription model? The porn has to go so they can have a “you might also like” column that isn’t filled with hentai barf porn or whatever.

You can see the top Patreon creators on Graphtreon: https://graphtreon.com/top-patreon-creators

Even going back in time (Graphtreon keeps historical data), there's less porn there than you suggest.

I think that’s it but it didn’t have the categories when I saw it, so every other one was adult animation, etc.

The same problem exists for firearms and related products. There are only a couple of (expensive) processors out there.

Seems unfortunate. These are what I'd imagine to be near private transactions between consenting adults.

Where's the harm in that?

It's easy the see the financial institutions as the bad guys or the users as the idiots. But really, after having used a few of those sites for adult, I feel safe saying that most of them had/have it coming.

Personal experience only a few weeks old, with a medium sized porn site:

* During the subscription, you get another service -costing extra of course- proposed. The checkbox for it is checked by default, in small font, on the side of the screen.

* The subscription; it renews every month by default. You better read carefully before you enter you payment data.

* You want to cancel? No way to do it from your account settings. You try the web site of the processor; nothing. Well, actually, maybe there is, but the only way to log in is by using you card credit number. No thanks. You finally find a link (deep in the FAQ of the first web site) that will brings you to a page on the processor's web site.

* Finally, you seem to be able to cancel; the page shows a "Membership cancellation" title, a pile of text, and a "I confirm" button. Well you better read the pile of text, because the "I confirm" button of the "Cancellation" page does not cancel your account.

And that's only for one site.

Beside that, there is also a whole bunch of stuff that would make any IT professional cringe really hard.

It's kinda hard to believe that all of this is perfectly legal, specially given that they operate internationally. No surprise that their payment partners get reluctant to work with them.

PS: not speaking about Patreon, never used that site.

Paypal, Patreon, Visa, whatever. They do all the same.

Remember Fetlife? https://news.ycombinator.com/item?id=13483998

And there are 1000 other examples too.

I feel like this constantly happens. I'm not a fan of people getting shut down if they are creating something legal and it has an audience.

I had a friend who was in promotions. She promoted parties mostly for gay women. Nothing sexual or explicit. She found it hard to get payment processors - this was around 2011....

I thought this was ridiculous.

So consensus largely is - probability of fraud is higher in adult entertainment business, downstream processors either charge exorbitant fees or altogether refuse to accept such payments, to mitigate having to deal with chargebacks.

My question is, Why is chargebacks still a thing ? Why hasn't the US adopted 2F Auth for payments ?

With advent of smart phones we can have reliable identification based on two factor authentication, by sending a text message to mobile number registered with the bank, or even go further with text + fingerprint / text + password. The odds of fraud with such system would be minuscule.

Is there any reason apart from banks being greedy and the government being hand in glove with them ?

It actually runs deeper - the reason 'probability of fraud is higher' may as well be called 'probability of buyers remorse' is higher. In the industry we call it friendly fraud. When a customer finishes what he came to finish doing, the regret of spending 50 bucks can often result in a call to the bank. Some credit card providers make it even easier you can just click 'dispute' online and pretend like it was fraud to get a refund.

Interestingly, 3D Secure (verified by visa etc) was created to solve the issue of friendly fraud, but whats mystifying is it applies for all categories except for Adult.

Of course, this isn't the whole story, there's other factors like aggressive affiliate marketers - but it's a big part of it.

Chargebacks protect buyers from dishonest sellers?

Shouldn't that be job of a consumer protection body ? Banks should not be in operating in law enforcement domain / be deciding what's right or wrong.

My understanding is most chargebacks are for fraudulent transactions, which were not authorized by the card owner.

Looks like an opportunity for an adult version of Patreon.

The problem with a “Patreon for porn” or an “iTunes for porn” or an “Amazon for porn” or an “anything else, but for porn” is that one of the primary things many porn consumers are looking for is anonymity and deniability. If the service is mostly used for other things, they can pretend they are only using it for those things. Once a service becomes primarily about porn, they lose that deniability.

They already exist

Imagine Patreon but even more dysfunctional and unreliable.

onlyfans.com for example

I recall a magazine that bought and published articles that were certain not to offend anyone. It was called Reader's Digest. Haven't seen a copy in decades, yet it persists to this day.

There is a crowd that will pay to have what it's exposed to restricted. I guess they would not want Patreon to create a separate, less-restricted service. (The name 'Patreon' itself seemed carefully chosen.)

Credit card company or morality enforcer?

Credit card companies don't really care either way, but heavily regulated industries tend to prefer being on the regulator's good side, and the regulator is ultimately the political institutions.

The mirror version of "distributed costs and concentrated benefits" is working against what progressively minded people would think of as simple personal freedoms: Most progressives are not avid consumers of adult services, so they won't throw their full political weight against such actions. But those who are against adult services _will_.

I hope that voting and patience in explaining to political outgroups does help, but I admit it's more hope than anything else, strangely. This should be a bipartisan priority, but either party thinks they can "win" the though-police race.

I was half joking. This often tends to be a problem of the customers more than the credit card companies.

Adult content and gambling face charge-backs at a far, far higher rate than for other things. I'm sure cryptocurrency is now in this basket as well, as anything people have "regrets" about tend to get charged back way more than others.

If credit cards were more secure, if you couldn't just claim "Wasn't me, gimme my money back" on just about anything, this would be far less of a problem.

Credit cards should, at the absolute least, have embedded one-time password generators as a necessary component for online purchases.

The American financial system is so ridiculously baroque, though, that I bet this will happen forty years from now when the chip+PIN phase in is finally complete.

Meanwhile the multitudes reiterate the “crypto is dead” mantra until next year.

bitcoin and clones - here is yet another niche opportunity.

This is why we need cryptocurrency.

This idea that the livelihoods of adult performers are at stake is nonsense.

Almost nobody in the industry relies on Patreon for their income, not in the least because people don't go to Patreon for adult content. Sure, some performers do set up one for their fans to support them, but practically nobody lives off of it.

Not to name any names, but there are dozens of popular sites where performers can offer their content/services. They all take a relatively big cut (on the order of 50%), but that's due to rampant fraud, chargebacks and because of money laundering. If that service could be offered substantially cheaper, it would. Case in point is that despite the issues, cryptocurrency isn't popular at all.

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