As for the banks: Azerigazbank in Azerbaijan, St Kitts & Nevis Anguilla National Bank in St Kitts &Nevis, and Danish-owned DnB Nord in Latvia, there is some more interesting factoids in the actual paper:
"most herbal and replica purchases
cleared through the same bank in St. Kitts (a by-product of
ZedCash’s dominance of this market, as per the previous
discussion), while most pharmaceutical afﬁliate programs
used two banks (in Azerbaijan and Latvia), and software
was handled entirely by two banks (in Latvia and Russia)"
As well as the fact that most of the merchant codes were correct:
"For example, all of our software purchases (across all programs) were coded as 5734 (Computer Software Stores)
and 85% of all pharmacy purchases (again across programs)
were coded as 5912 (Drug Stores and Pharmacies). ZedCash
transactions (replica and herbal) are an exception, being
somewhat deceptive, and each was coded as 5969 (Direct
It does make one wonder if spam is a solvable problem.
Any changes will just cause them to move to the next easiest option.
If TechCrunch published a monthly list of what spammers are using what credit card processors/merchant banks they'd put a huge dent in the business.
In the case of spam, banks know when transactions are made for fraudulent products. For this whole industry to work you need their cooperation as online transactions are only possible through banks.
Take this away and I could see spammers in real trouble.
Of course this may reduce their margins. But there is one cure for it: send more spam!
Actually, that's not true. The cost of sending spam is very low, but it is NOT zero. If the profits are lowered (by making payments difficult to collect) and the costs raised (by better blocking of mail, forcing botnets and such) until these cross, then spamming will become unprofitible. Then it will rapidly disappear.
Once killed off, like an infection it may STAY gone. The anti-spam infrastructure we have put in place over the years (spam filtering tools, blacklists of open relays, etc) would remain. The infrastructure (like affiliate programs) that supports the spammers would die off. That would make it MUCH harder for someone to begin spamming again.
Unlikely. Spamming has already been less and less profitable over the years margin-wise to the point that for many spammers, it is actually not profitable. Yet, for every spammer that drops it because it is no longer profitable, another dozen n00bs join the trade.
The idea of killing a few key companies/guys will significantly lower spam is a sexy idea but little else, IMO. In short-term, getting rid of a key component that kills a third of spam may help. But it doesn't take a long time for someone else to fill in those shoes using different technologies/products/banks.
I actually dabbled in this industry for a little bit during my teenage years so I have some insights though some of it is obviously outdated. The only thing I am still confident of is that there are more spammers today and margins are lower than when I was messin with it.
A brief dip into unprofitability will not destroy the industry because (as you say) another dozen n00bs will join. But I believe that an extended period (say, a year or two) might kill it off -- the "n00bs" could not operate without the extensive infrastructure of tools and those WOULD be damaged or destroyed by unprofitibility.
Unlike the other links in the spam problem, banks have the problem that they can only stay in business if they are seen as legit by legitimate banks, credit card companies, and the like. The same is not true for botnets (illegal), spammers (already breaking the law) or the manufacturers (as long as they have money, they can get supplies, and they are hard to regulate as long as their countries turn a blind eye). But if you're a would be Viagra purchaser, and your credit card won't let you purchase your Viagra, the spammer is out of luck.
Now, maaaybe making it illegal to by Hrebal Vigara would dissuade potential customers despite the negligible chance that they'd get into any trouble for it. But do you really think it would dissuade them enough to make much difference to the profitability of the spam? Doesn't seem at all likely to me.
On the plus side, it is a proven solution, since nobody pirates music, movies or games ever since it was made illegal.