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.
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.
> 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 ?
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.
My friend owns one such service, he is using Luxemborg based payment facilitator.
Then why is so much porn still being made if there's so little money in it today?
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!
Source: work with porn people.
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.
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.
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.
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?
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.
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.
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.
I genuinely wonder how true this is. Does anyone know of any stats/data that have been released about it?
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.
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."
"Honey..about that..uh..well..I..ummm.. porn is disgusting!! Thank you dear!"
Porn consumption is pretty common, but "nobody pays for porn" is a punchline for a reason.
Even if only 10% of users are paying it would still be a very high number of transactions.
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.
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?
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'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.
EDIT: Apparently chargeback may be the major issue for porn payment processing:
With a credit card, you'd do a chargeback. With crypto there no protection from dodgy sites.
So, no, not just for physical goods.
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?
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.
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.
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.
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.
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.
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.
"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)
Porn is much more about revealed preferences in isolation.
Just a FYI.
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 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.
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.
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.
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.
PayPal, Stripe and the rest are their own https://en.m.wikipedia.org/wiki/Acquiring_bank which means they can process the payment themselves.
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.
You're the only other person I've seen use this phrase.
If you're serious about working on this, contact me.
It's the "custodian of record" you MAY see at the beginning of a FakeTaxi or Hospital.
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.
That's pretty fringe...
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.
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.
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.
They tried accepting BTC. Noone used it, even while they were struggling with Visa. They pulled the support citing lack of use.
* Bank Transfer (from select countries )
* 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)
 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.
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.
> There is no mechanism to obtain a refund for a mistake
Neither of these is true for SEPA.
Common enough that there's been a fair bit in the media regularly, ever since instant transfers took off, and warnings from the Financial Ombudsman.
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.
 First link in results https://www.telegraph.co.uk/personal-banking/current-account...
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.
My (US) bank issues account number serially. No check digits.
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.
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.
Do you know of any problem?
Instant clearing/settlement is in TARGET2 which is the ECB's vision for 2020.
-prevents this nonsense
In a weird way, I think China does this right.
Winnie the Pooh is no longer allowed in China . 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.
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.
The last time I checked, the US believes that Taiwan is part of China. 
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.
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.
> 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.)
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.
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.
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.
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.
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.
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.
On the flip side, I'm sure there are/will be oracles for approx. block time, so this is still a solveable issue.
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.)
It needs, at a minimum, easy-to-use privacy preserving transactions. Without that, it's a personal-information-leaking nightmare.
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.
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.
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.
pre-signed, time-locked transactions?
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.
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.
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.)
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.
Bitcoin is a blockchain.
Not every cryptocurrency is a blockchain
So not every cryptocurrency is Bitcoin
And not every blockchain is Bitcoin
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.
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.
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.
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.
>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.
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 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.
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?
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.
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!
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.
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.
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?
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.
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.
"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.
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.
 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.
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.
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.
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.
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).
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.
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 :) .
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 :/ .
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.
Even going back in time (Graphtreon keeps historical data), there's less porn there than you suggest.
Where's the harm in that?
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.
Remember Fetlife? https://news.ycombinator.com/item?id=13483998
And there are 1000 other examples too.
I thought this was ridiculous.
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 ?
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.
My understanding is most chargebacks are for fraudulent transactions, which were not authorized by the card owner.
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.)
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.
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.
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.