The title of the article is misleading, it's not programming that is the real issue, it's billing (the progamming issues are just a part in the article).
Since the Credit Card companies & banks create lots of problems as soon as sex is involved (see FetLife's misadventures in HN previous articles for instance) in addition to the big chargebacks issue, and given that customers lie a lot (because they can), I think that the best solution for pornsites would be something similar to prepaid cards used for Google Play, consoles networks and the like.
You buy a card, this puts a limited amount on your "PornPlayButDontSayItIsForThat" account, it's easy to control, anonymous, limits risks even if the account is compromised or the porn site dodgy (hidden automatic renevals & the like) since at most you'd lose that limited amount, then you can buy porn without the issue of the SO (a big problem it seems) and without any banks (or whatever) knowing about your -still badly perceived- habits.
In fact, I'm surprised such a system (not specific to a porn site/network) is not already widely available. Of course, it would not present itself as "the Porn Prepaid Card" because of the stigma... Note that some sites/networks accept gift cards already (I've checked), but it's not very practical (not fine grained, you must use the whole card) and they don't accept ALL cards, what do you do when you're living in France and they only accept American gift cards? You can also buy "tokens" in many sites (especially Webcams) but they still require a CC, so the problem is not solved. A more general "ePurse" system would be better.
This is much more realistic -IMO- than using Bitcoins or the like (too difficult to use and too volatile).
Of course, to REALLY solve the problem you'd "only" need people to stop seeing sex (and porn) as bad, dirty, taboo, etc. But this won't happen anytime soon :-(((
The problem with this approach, and the related proposals like 3D Secure and Bitcoin, is precisely that it puts a low ceiling on what the site is allowed to charge to exactly what the customer is willing to spend on porn. The bread and butter of porn and most other internet subscription models is to get hold of the consumer credit card data and then setup a long run recurring payment stream, on the expectation that while most people will cancel it, a profitable minority will forget or enjoy and pay for the service further.
If just 25% of the customers let the subscription run for an average of 1 additional year, you will net 4x more money compared to a site that needs to renew the purchase every month, with zero customer acquisition costs and zero marginal costs for the provider - the content and platform are a sunk cost and traffic charges are negligible. Only now you have 4x more money to produce the content and generally be more competitive, pushing out of the market those who don't adopt the same tricks.
This is what The New York Times and porn sites have in common, and that's why you will see similar dark patterns of making subscription hard to cancel. In the porn's case, it's a much steeper uphill battle to get the money from the customer and his bank (and his wife), so they are forever relegated to the high-chargeback bin and must internalize that into their business model. Which might explain some of the "breakage" the original author is observing.
If there was a prepaid card that make these payments easy and even anonymous, I'd spend a lot more on the internet. I refuse to get into subscriptions. I pass on a lot of articles that I'd like to read. A prepaid card that not connected to my finances and widely usable? If drop a hundred on it today. How many people like me will it take to have this make sense?
But such an anonymous prepaid card would ALSO be very useful for money laundering. Because of that, no regulated financial institution will provide such a product. We used to have some (like prepaid debit cards purchased in person with cash) but the few that existed have nearly all been eliminated (in the US).
I am sure that if someone were to propose using specially printed pieces of paper as a way of exchanging value that the government would prohibit it. The FBI would testify about "the financial system going dark", the banking regulators would complain about money laundering, and the whole scheme to invent "cash" would be denounced more vigorously than Bitcoin has been.
Last time I bought a prepaid card (I believe it was Visa), to register it I had to be looked up in the credit card database. As I did not have a credit card at the time (hence buying the prepaid card), I was not in the database, so they would not sell me the card.
What is “the credit card database?” What country is this? In the US we only have credit reports, which are tied to SSN. Do you mean you had to give your SSN to receive a prepaid card? That doesn’t seem right.
I thought some were anonymous when paid with cash, however some of those require that they are activated using a web browser and they request additional info, some requiring physical address and SS that match some database in order to use them.
I have also seen some businesses refuse to take a prepaid cash card, some saying nothing,
and others saying that they can not process such a card as recurring billing is blocked by the issuer or something.
I think there is some distinction at the card kiosks re-loadable vs non-relaodable making a difference with some of these issues.
Of course using a loyalty card during purchase or using a debit card to buy one adds personal info into multiple databases I would assume.
Now it makes sense. Some vendors may not take a prepaid card if they can’t verify that the card matches an address with the card. I would assume this would especially be the case for online merchants shipping physical goods.
In that case, you may have to provide an address on a website.
I don't think I understand the issue with using 3D Secure, or Verified by VISA. It's something customers are already accustom when shopping online. You're buying a high risk item, from the perspective of the sell, similarly to downloadable content, or high price electronics. Solution like 3D Secure seems ideal in this case.
Companies like Stripe could easily say: Yes, we do accept payments for adult sites, but 3D Secure will be enabled on all purchases. I don't think that would scare of more customer than bouncing them between multiple payment provides and seeing the their payment reject multiple times.
The problem is the customer on that side. The adult entertainment industry would love to use standard billing methods.
But what happens is that the customer invariably screams "I was hacked" when the line item comes on the bill. Then the chargeback happens anyway. Sure, the merchant isn't held financially liable for it, but they are still noted as having that chargeback. And they'll still hit that high percentage of "fraudulent charges".
And that's the real problem. Nobody will touch them because it costs too much to do so.
That a rather valid point. In theory the card companies would turn around an say: "No, you where not hacked. 3D Secure is completely safe", but do they really want to bother with that kind of publicity? Most likely not.
The problem is that most consumers don't plan ahead for wanting to buy a porn subscription. It's a spur of the moment decision. Any form of barrier you put in front of that decision -- whether it's extra verification, or a different digital currency they need to buy, or a prepaid card just for adult content -- drastically reduces the percentage of surfers that go from "guy looking at the site's preview page" to "guy that became a member."
This is why few Adult companies have setup Verified by Visa or 3-D Secure (though as I noted elsewhere, 3-D Secure rarely actually works) for verifying cards before charging the transaction. This is why Adult companies in the UK started scrambling when they passed legislation requiring driver's license verification. This is why no prepaid adult content card -- and there have been numerous, including one promoted by Howard Stern -- has ever really caught on. Any extra step required to pay for a site increases the percentage of people that just click off to somewhere else. Luring those people to your site in the first place is expensive, involving all sorts of advertising and affiliate deals, so anything that reduces the conversion ratio is a deal breaker.
I wonder if fraud could be reduced by creating a "push" payment model instead of pull. Not just for adult sites, but for e-commerce in general.
The form says "To subscribe, remit $25 to account 12345678, and paste the transaction ID into this field." The merchant could then verify that the transaction ID matched up with a payment he received and complete the sale.
With a standardized microformat for the payment data, this could probably all be detectable and streamlined into browser plugins or apps-- you'd just see a button that redirects you to log into your bank's site with the transfer details prewired.
I figure this has plenty of benefits:
* The only remotely sensitive data you pass to the merchant is a transaction ID. You'd probably be able to actually do the sale without SSL, but certainly without most of the PCI compliance hassle.
* The merchant can't use the info you provided to enable an unexpected second charge or subscription.
* The bank can choose to make their process for executing the push transactions as "easy" or as "secure" as they (or the users) want. The merchant doesn't have to know, care, or worse, spend money to retool their site to support changes.
In a way, PayPal's flow is sort of push-oriented, but it's ugly in a lot of ways.
One of the possible issues here is that some of these cards, specially anonymous ones, may take time to validate. Users may not want to wait 24hrs+ for their digital content to arrive.
> Of course, to REALLY solve the problem you'd "only" need people to stop seeing sex (and porn) as bad, dirty, taboo, etc. But this won't happen anytime soon :-(((
It won't, since it is not universally true, that seeing porn is not bad. There are thousands of personal accounts, or even a whole communities of people, who are trying to get rid of porn watching due to damage it brought to their lives.
It's impossible to view this in isolation. Did its perception in society contribute to the damage? If you're constantly told something you're doing is bad you'll want to stop. If you can't, you'll feel shame or worse.
Those communities seem like a way to get around the feeling of guilt associated with sex through a Christian inspired cultural lens, not based on any actual harm.
There are cultures out there where men were nothing more than a stick around their penis. I would personally not be comfortable with that, but presumably the people born in those cultures are.
I'd say that gambling does a lot worse damage and that is much more widespread and "legitimate" (here in the UK at least). Online gambling sites are even advertised on primetime TV!
Or for a better example of a perfectly above-board and healthy activity enjoyed by huge numbers of people that can become addictive and "a problem" - how about gaming?
(I'm not trying to belittle your point or resort to "whataboutism" here, just pointing out some examples from other industries).
The problem with porn is that it's sex and sex is dirty and bad and you should feel ashamed for having anything to do with it. /s
We're what's broken. Our prudish approach to adult entertainment.
"Joe" would have a happier life if he and his wife were open about how much money they were each spending on porn. They might learn something about each other. Hiding it in layers of shell billing companies isn't just ridiculous at the technical level described here, it's unhealthy.
Also needs to be noted that —as others have said— card processing companies need to get the hell out of the way and just deal with money at a fair risk level. Adult entertainment is higher risk than a card-present or delivered transaction, but absolutely no worse than your Netflix subscription. Considerably less risky than the in-app junk that Adyen happily underwrites ("My toddler bought this without my permission, waaa").
Your assertion regarding adult CNP risk is incorrect, they do in fact have much higher levels of fraud and chargebacks. The card networks came down on this category because of chargebacks, not because porn is bad.
I would also point out Adult CNP is far from the only category to get this treatment, but they are one of the only high risk categories that have four major banks more than happy to take their business. Travel sites, dating sites, and other high risk CNP merchants don’t have the same benefit.
The techniques described in this article are exactly why issuers block transactions. Merchants are trying to force transactions that are likely to be charged back by engaging in increasingly elaborate, and likely illegal, schemes.
If you’re operating a legitimate adult CNP site, there are plenty of options available to you and the adult-focused processors will hold your hand through rejecting sketchy charges even if it means lower up front revenues.
I have seen bad actors open up fake porn sites to obtain processing for their illegal activities because adult processing for legitimate sites is that available.
Exactly this. Adult and high risk in general are an absolute quagmire, and all actors are trying to "outcompete" with one another, making the situation worse and worse.
Risk from transactions: stolen credit cards get default checked on adult sites (digital good delivery instantly verifies if the card is still useable).
Bad faith merchants. This goes from outright scams to the still widely used practice of "card banging", when they tack on added services or hit you with a huge fee after your free trial ends (which is not presented to the customer).
This analysis is still missing something essential.
"Adult merchants are more likely to have chargebacks" is akin to saying "Blacks are more likely to commit violent crimes". In terms of overall statistics, it's factually true, but there's still something reprehensible about judging individuals this way.
When I was at kink.com (10 years ago), our chargeback rate was tiny - lower than most online businesses, and nowhere near yellow flag territory. Yet despite our long history of good citizenship, we were still lumped into the high-risk category. Visa rules only allow banks to process a certain percentage of their volume as "high-risk", so getting merchant accounts which could handle our payment volume was a major challenge.
We have the tools to judge individuals and businesses by actions, not as members of arbitrary groups. Sure some businesses may deserve some initial extra scrutiny, but at some point your history should speak for itself.
I think your complaint is fair regarding being lumped in despite a history of good citizenship, and I agree and add that the card networks were definitely a bit thoughtless during the adult crackdown in 2002. They have since offloaded most of this risk management process to specialty processors that do take good citizenship into account, rare as it is in Adult CNP. All high-risk means now is a couple thousand dollar startup fee and quicker turnaround through chargeback/fraud remediation programs.
Also, banks aren’t limited by anyone to a certain percentage of high risk merchant accounts currently, I am not sure if they had that limitation 10 years ago. There are certain banks, that I have interviewed extensively for my cases, that almost exclusively process cards for high-risk accounts.
African-Americans and the discrimination against them are not at all comparable to to pornographers and their problems getting payments processed. These are entirely different things with very different causes and with consequences that are orders of magnitude apart.
African American here. The comparison is actually pretty apt. Deliberate, systemic economic barriers put up against those seeking to do legitimate business due to blanket group policy (see banks like Wells Fargo who are STILL doing redlining and race-based credit rationing today) actually encourages illegal activity for people trying to make a living. And lets not forget the sex workers who are creating the content sold by porn sites. Law after law pushed by both conservatives and "progressives" that criminalize even their responsible activities, make it difficult for them to bank, and making them even more vulnerable to bad actors.
The consequences are actually more or less the same - sex workers have much higher rates of mental health issues, victimization to violence, and lower life expectancy. Pretty much the same types of problems faced by (esp low income) black Americans. For largely the same structural economic reasons.
I'd like to add that some of these issues stem from the early internet porn days, when chargebacks were due in part to easy fraud by individuals looking for free porn with a phone call (to credit company), and those who paid for porn without thinking about explaining the charge to significant others who would later see the info on a bill (leading to a call to bank to swear they did not go to such a site).
Some of the statistics of these problems stem from haxor forums and like making stolen cc's available and them needed a quick and cheap way to confirm the cards are still valid, seeking a site offering a $1.99 trial to test a card, adult sites were some of the first to make those available.
I read a story couple years ago saying the pizza delivery places in New York (I think) were getting abused by similar carder testers sending pizzas around town for the same reason.
There was a time ( 14 years ago maybe?) when a good chunk of adult sites started adding auto checked addons for additional sites to sign up for, knowing that the purchaser was likely not going to understand they were being opted into additional site sign ups, with more auto billing for higher prices after a trial period, with another set of hurdles to find the cancel options for said addon sites.
- "We have the tools to judge individuals and businesses by actions, not as members of arbitrary groups."
I do think it's easier these days to determine that a solo cam girl is not engaging in the kind of shady practices that warrant the extra fees to start processing, higher yearly fees, and higher percentages.
However it appears that companies are more concerned about price gouging the few adult sites that are left rather than make reasonable options available to smaller start ups that would avoid the bad behavior that gave the blanket industry a bad name to begin with.
There has been some discussion that pressure from certain groups within the federal administrations have made some banks not handle the monies at all, and others only take the risk of whatever publicity if it makes them enough extra money to warrant the transactions.
Although my senator writes me to say there is no evidence that operation chokepoint is forcing private money handlers to change how they do business with various small businesses, I think there is enough writing on the wall to see that a little pressure here and there is making things difficult on many legitimate and legal businesses.
Given how difficult it is to do business online without visa/mc acceptance, I think it's a terrible thing to be used to encourage or discourage any kind of information sharing.
It would be nice to see Stripe and others accept adult related processing.
It would be nice to have legal protections instead of back room threats for the opposite.
Certainly the companies put in clauses that say if you get a huge amount of chargebacks at some later time we can choose to make you pay the extra 1500 or $2500 or whatever it is that higher risk accounts require, and if you turn off the software that helps eliminate some of the "not quite sure these are legit card holders" or whatever the different places call fraud checking these days, then you pay a higher rate or whatever.
I find the whole situation discriminatory, and predatory.
It makes it harder for mom and pop shops, and keeps the bigger companies in positions of power to control what the smaller publishers can choose to fund and share.
> they do in fact have much higher levels of fraud and chargebacks
Sorry, but [citation needed]. I don't agree with your assertion. I've seen horrible chargeback rates in apps and non-adult VoD. As high as 4.something percent at one point for one developer. The problem: kids. The lack of control over the payment process was killing him.
And that's the thing, it's not 1999 any more. You can improve chargeback rates by collecting more data, forcing 3DS, forcing AVS, SMS verification, doing statement charge verification (old school), fingerprinting every authenticated transaction. If my business and my processor's continued business depends on it, I can get beyond reasonable doubt and prove it's you making a transaction. That means a lot more drop-off (AVS alone can be 5%) but chargebacks past that are either your fault or stupidly simple to refute with evidence.
But many processors are still just unwilling.
The only way things become more reasonable is that we stop forcing otherwise legitimate adult content sites into the arms of companies that coast along on decades-old tech, making the good actors pay to offset the bad actors' actions.
Until then, when we can have mainstream processors allay risk fairly, putting a spur-of-the-moment sub-$1 micro-transaction through isn't viable and that's where porn's going to explode.
I have looked into crypto a few times for these kinds of sites - it's been some months, so maybe it's changed, but last I researched telling someone to spend crypto (in/from the US) - was fairly complicated, added many more steps, and actually added more details about you and your shopping to more third parties.
If you have a suggestion for teaching someone how to get crypto in the US and send it to an adult site with less steps than it takes to use a visa/mc and without the end user needing to give up more PII(?) (personally identifying info) to more people (than you would by simply using a visa prepaid card with a single merchant) - then I would really like to know about such a guide.
But porn doesn't have high margins. No one (except the large distributors like Mindgeek - Pornhub, Redtube, YouPorn) is making much money. Especially these small sites that are being built. After you subtract legal, production, performer fees you're left with almost nothing.
I worked in the Adult Industry for several years, but building tech for the industry wasn't financially stable for me so I had to leave. Still really passionate about the sex worker community though. Porn performers/activists are the kindest, sweetest, most intelligent group of folks I've ever worked with.
Maybe we can start a small group of engineers who want to discuss working through some solutions together. My email is hello@marik.io if anyone is interested.
Should we consider banking a disreputable industry because of actors like Goldman Sachs? Should we consider mining a disreputable industry because of the deaths and cover ups? How about human trafficking for diamond mines? Should we consider the jewelry industry disreputable? How iPhone productions and Foxconn? Seriously the list can go on, every industry has parts of it that are less than reputable. If you think porn is somehow worse, that’s because of your morality or religions beliefs and not the facts.
> Should we consider banking a disreputable industry because of actors like Goldman Sachs?
And Wells Fargo. And Bank of America. And HSBC. But yes, any one of them is enough.
Mining is disreputable because of endemic pollution externalities and worker safety violations. Jewelry is disreputable from cartelization and the FUD regarding synthetics. Foxconn is disreputable because of worker suicides and the Chinese government's apparent political interest in advancing its high-tech manufacturing by any means necessary.
Prurient businesses are disreputable for several reasons, and one of them is the self-reinforcing reason that they are forced into using grey-market payments processors, because their industry is disreputable with respect to customer payments fraud.
So you don't purchase gemstones as investments, you don't let Goldman Sachs handle your IPO without a lot of scrutiny and supervision, and you don't trust the clay lining under the mine's leach pond. And you don't let adult entertainment businesses do card-not-present transactions. The industry attracts bad actors because there's money in it, demand is high, customers have their respectability masks off, and it has less personal accountability than other types of work.
The businesses that have a reputation problem regarding its suppliers getting paid reliably are going to have the worst problems. Everyone else can clean up their problems with lawyers after the fact, with the money they have already been paid, but if your problem can prevent you from getting paid in the first place...
Goldman Sachs never has that problem. Ensuring they always get paid first is apparently part of their culture. That's why they're always the ones making out like bandits while everyone else is dropping like flies. They might stab you in the back, but they won't ever fold up and collapse underneath you. Their office will always be open to accept your civil complaint or welcome the regulator/examiner or government's attorney. And their corporate executives will always be eager to repay your Secretary of the Treasury nomination, or seat on the Fed board of governors, with truckloads of hard money and soft money to support your political campaigns. They might not be reputable, but they are respectable.
Prurient business lacks even that, for the very reasons you mention. If you don't have the respect, you will never get the reputation, no matter how reliable you may be.
From my limited experience talking to people working in this space, the violence / human trafficking portion is not really a problem in the adult entertainment space. At least, many models definitely work voluntarily. I think trafficking is more of a potential issue at the shady ends of prostitution.
The downside of the adult entertainment industry is that you did hear of tales of questionable employers... it's less "violence" and more environments and/or tactics that sometimes seemed shady or unethical. There was also tales of drugs, sure. Also the pay is often relatively lousy. IMHO your best bet to avoid shady places is to support models / producers / etc. at an individual level, which is more possible these days thanks to the Internet.
(To be honest the industry it reminded me of the most is the music industry. Which has similar bits of shady employers / work environments here and there, similar drug issues, similar lousy pay, and a similar scenario where the best way to avoid the shady parts is directly supporting the non-shady artists and venues as much as possible.)
> I'm finding it difficult to believe this given that it's known that pornography is known to be an industry riddled with violence, hard drugs, human trafficking and so on and so forth.
Known by who? Source?
> Edit: As soon as I posted this I see the other commenter outed you as having an inherent benefit from tricking people into believing pornography is a reputable industry.
What are you talking about? I see nothing like this anywhere in the comments section.
This article is extremely alarming. The process the author is calling "cascade billing" is money laundering. This exact process of disguising the nature of transactions to get banking institutions to transfer funds is literally what the feds took down Backpage for recently. I am very familiar with the details of that case and am surprised to see someone be so cavalier with the details publicly.
Many adult services providers are burning through hundreds of merchant accounts, getting them closed/actioned, and repeating as long as they aren't prosecuted. The moment they have to deal with any criminal prosecution, however, there are going to be a lot of problems now that the feds have learned to prosecute this as money laundering.
EDIT: Holy shit, the author cops to being an accomplice to wire fraud in the comments: https://i.imgur.com/S5UWBZZ.jpg. He needs to take this post down immediately. This is why programmers need to learn about the world before they do things to it.
Your mistake is in thinking that the money laundering is achieved by, say, generating a credit card charge for FOO when the item sold was BAR. Not so - the money laundering is in opening many merchant accounts purporting to be for selling FOO, generating profit sanitized as "clean," moving those profits between banks, and essentially deceiving payment processors to generate a profit.
This was, in fact, one of the actual mechanisms brought to bear against Backpage. Certainly the indictment was motivated by, you know, underage sex trafficking, but the enforcement mechanism used to achieve a verdict was mostly money laundering. You can read the indictment yourself: https://www.justice.gov/file/1050276/download. How many counts of trafficking vs money laundering do you see?
And finally, no, they are not "selling different content through other processors." These processors' entire business model is to create "legitimate," totally unrelated transactions to the credit card authorities, to take a cut, and pass back the funds to the merchant. I believe Backpage was instructing people trying to purchase ad inventory to go to a portal to purchase dog food for a while.
No, this is not what Backpage was prosecuted for. If you look at the indictment in your link, the money laundering counts for Backpage were:
Counts 53-62, Concealment Money Laundering
"conduct ... a financial transaction which in fact involved the proceeds of ... unlawful activity knowing that the transaction was designed ... to conceal and disguise the nature ... of the specified unlawful activity"
Counts 63-68, International Promotional Money Laundering
"transported ... funds .. with the intent to promote the carrying on of ... unlawful activity"
Counts 69-93, Transactional Money Laundering
"engage in a monetary transaction in criminally derived property"
The point is that all of these require an underlying unlawful activity. Prostitution is illegal, and therefore it is also criminal to handle money in a way that hides that it's related to prostitution. But selling porn is legal, so the chain payments would not violate the same laws.
My point is the issue is not as black and white as you are making it out to be (hence, don't be an alarmist). All things are subject to interpretation and your position attempts to definitively categorize this activity as fraudulent behavior based on a 1000 word essay by a developer.
I work on money laundering cases. What the poster admitted to doing, particularly in the comments section, reads like money laundering. I have used emails more vague than this write-up against defendants in money laundering cases. The underlying crime would be bank fraud, wire fraud, or mail fraud, or all three, depending on how a particular merchant account was opened, how transactions were processed, and who the parties to a contract are (if a financial institution, then bank fraud, and so on).
You created your account 3 hours ago, with a creative name and then annonymously post you work on money laundering cases ... As if that is supposed to add credit or show some sort of background. You are anonymous, don't try and take some high ground to reinforce an invalid argument.
It's more complex than that. Sometimes people create throwaway accounts so they can share more information than they'd otherwise be able to, and really are experts or insiders on a topic. It's not always easy to tell such cases apart from fabricators or trolls, but it's important to try, and to give people the benefit of the doubt. I generally go by how substantive the comments are or seem (admittedly not an infallible test).
Fair criticism regarding anonymity. You can disregard my comments if that is an issue, but I would prefer to engage on this topic on equal footing and put aside any claimed background, if that works for you. Can you explain what it is that you think is invalid regarding money laundering with fraud as the underlying crime? Or, if another point I made was invalid, what that was?
> essentially deceiving payment processors to generate a profit.
That's not an illegal act, unless you can cite relevant statutes being broken. It's a contract breach.
Your whole analogy to Backpage breaks down without the initial illegal action that produces the revenue stream and sets in motion the need to launder the money.
You are being silly - breach of contract to deceive payment processors IS wire fraud and bank fraud, which are specific named federal crimes which cover exactly this use case. If you like, here's an excerpt from the Backpage indictment:
"the People now allege that Defendants conspired to orchestrate a bank fraud by misrepresenting to credit payment processors that they were not processing transactions from Backpage, and this misrepresentation would trigger a release of funds from banks. The overt acts alleged clarify that Defendants created multiple classified websites, and when applying for (at least one) merchant account, Defendant Ferrer omitted any reference to Backpage, despite intending to process Backpage transactions through the account. The People allege that credit payment processors, along with American Express, would not have knowingly processed the payments for Backpage and the banks would not have released funds absent Defendants’ trickery."
I think you should carefully read your quote - it includes the word "Backpage" four times, as in the illegal source of funds that created the laundry opportunity. Breach of contract with payment processors is certainly NOT wire fraud by itself, that's an absurd statement.
You're weirdly stuck on this "breach of contract superseding federal crimes" thing but uh, I don't know what to tell you. This scheme is clearly wire fraud. Defrauding a payment processor out of money, over wires, is wire fraud. It's also bank fraud when you lie to your bank about what your merchant account is for, which is another prerequisite for these schemes usually.
I would just be aware that any interaction with the financial system can quickly become criminal. Whether it does depends on a whole range of factors, but the option is always there. (Incidentally, the same goes for insurance companies. Can go criminal at any time.)
I wouldn't say that money needs to be "illegally obtained" to be classified as laundered. There are tax benefits to "laundering" legally obtained money, for example.
Although at this point we're just arguing semantics.
It has to be transferred AND
(1)illegally obtained, or
(2)intended for an illegal purpose, or
(3)disguised and international but not in any way illegal.
The elements for federal and state money laundering charges would be there. Lying to a bank, in a tri-partite merchant account agreement, email, or phone call, and then obtaining services from that bank, can come down on you as bank fraud, wire fraud, or mail fraud. Once you’re buttoned up on fraud, subsequent transfers of funds can be charged as money laundering. This is true for most states and under federal law.
In a hypothetical scenario where I saw this occurring, I would look for emails, texts, etc where you admit that you actually intend to sell memberships, and the T-shirt sales are merely to obtain payment processing services to get the fraud charges up.
Then I’d rack up the dollar amounts against you under money laundering statutes and stack them so you’d be looking at some pretty major prison time.
All this over selling some T-shirts to get a payment processor for your adult site? You bet! I’m working on very similar cases now.
Bundling a physical good with a digital one has been done before, so if I understand correctly the only problem here is that the usage of a t-shirt is purely to circumvent the ban from the bank (due to high chargeback rate)...
In that case, and theoretically, bundling the physical good with a digital access right from the start would be perfectly legal right?
It would still be a dodgy way to reduce chargebacks, but assuming no bank ban occurs, it shouldn't be a breach of contract.
Personally I'm nowhere near any of this business (nor any business at all for that matter) and I'm in Europe where I'm sure laws differ. Anyway, just out of curiosity are you involved in this from the law enforcement side?
The T-shirt think I mentioned was just off the cuff, I'm surprised this is actually being done.
> the author cops to being an accomplice to wire fraud
Can you not determine who the author is? Based on clues like the author's name in the article heading, and the comment poster's name being different? And the author posting a reply to the circled comment you posted indicating that this approach does happen, but is sketchy... seems to point to a reading comprehension problem here.
You're being rude, but to answer your question directly: the author responded to the circled comment with an underlined statement admitting to have knowingly engaged in these services for use by his employer.
Offering 2 things (access to one service, then a second service as 'free') does not strike me as automatically 'wire fraud'; we'd need more information to make that determination.
Money laundry means disguising illicit gains as lawful gains to hide the fact that you are breaking the law. In the Backpage case, the law that were broken pertained to child prostitution. Moving legal money around, no matter how complex, is not money laundry by itself.
The intention here is to circumvent the high chargeback rate of porn by disguising the purchase from the customer's bank, thus making it harder for him to issue the chargeback for an amount you have legally charged. That does not sound like an illegal action, but a breach of contract with the payment processor.
You are mistaken, and I've mostly responded upwards in the thread, but I wanted to add that the fraud's purpose is not to prevent chargebacks, it's to be able to receive money at all. Mainstream processors refuse to work with these guys because the fraud rate is so high, so they try to get their transactions approved (in any way possible) by disguising them. It is still very easy for any customer to chargeback a credit card charge.
As someone who spent 4 years working for Kink.com (NSFW) building and running their entire IT infrastructure, this guy brings up some valid points. We had to build some extremely complicated systems to handle payments, performance, security, etc. It was a really fun learning experience. We used top of the line equipment. We got lessons in scaling. Even came up with creative ways to tell people where I worked... 'Educational video company'.
I wouldn't necessarily hold it against anyone working in porn so much as working in the porn industry. The porn industry is violently against even basic things like condom use (and the list continues). Such resistance tends to mean justifying things with excuses. Since compromising would be to admit to responsibility. So why should I trust that someone working in such an environment isn't going to treat private data, important infrastructure or financial software the same? Random programmers from overall mediocre environments are quite easy to find whether it is porn or something else.
Edit: It is always funny how when you claim that people are biased and don't have arguments on Hacker News, they downvote you. People really can't get out of their heads. My point still stands. Good programmers doesn't have to go into controversial industries. They don't need excuses to justify how things "actually really are". The article says that the porn industry is "leading" in technology. That is bullshit. They might be leading in commercialization of certain technologies for a brief second, but that is all. How many programming languages did they invent? Zero.
Don't go into mediocre industry where people accept problems as a feature. All the people around will be there because they don't care about certain things and so won't you. You might not like it, that is up to you, but don't come complaining when you can't find a job after 40 because you haven't developed the skills companies are looking for at that age. Like identifying, solving and taking responsibility for larger problems.
That is certainly part of it, but it is also about capability. They don't know how to make it work, maybe especially not in their own heads. The same is true for developers. Seniority is largely measured in how good you are at delivering what is fundamentally correct without compromising. While lesser programmers will convince themselves that it is unnecessary or that their own solution is good enough.
Actually, some of the top notch, well funded production companies tried to make it work. They knew how to make it work.
Was it Wicked(?) (one of the big name, well experienced, well funded companies) that tried to make all their hired performers wear protection, even married couples.
They had top notch good looking talent, professional camera people, great lighting, costumes, everything.
I think they made some money from the HBO type cable channels buying the 'camera does not show the actual penetration' market, but not enough to continue the condoms only crusade that was attempted, from what I remember. Maybe there is a crew still making condoms only porn, but I have not see much of it.
The free market shows what most people are looking for, and from what I can tell, they aren't choosing the 'all condom' channel, even when it's free on the free sites.
That isn't really making it work. Look at the UFC. Total spectacle when it was first acquired, now it is one of the largest sports in the US. Largely because they are ahead of the regulation. People who want to compete by being a spectacle don't get licenses and access to large arenas. If they would have known how to make it work there would be a similar situation for payment processing and free sites as well.
I generally agree, but in this day and age, there is also real horrid, vile stuff... just follow banner ads on random free porn sites and you'll find a lot that is more an excessive dehumanization arms race than anything to do with sex.
People don't have to be ashamed of it in the sense that they didn't choose to get so damaged to be attracted by it, but abuse and it's consequences is a major elephant on the couch of the porn industry, and I also don't feel a shred of shame for not lumping it all together into one giant bag of "it's all fine", just like I can't lump it together as being all bad.
To each his own also means that I see what I see, and judge it as I judge it.
There is plenty of exploitation and abuse (including sexual abuse) in mainstream media as well... but because there isn't a public stigma attached to that, it's possible for public and political pressures to be arrayed against it. But since we're all supposed to be ashamed of porn and sex outside of marriage in the west, the worst of those industries are just considered par for the course and left to fester.
> we're all supposed to be ashamed of porn and sex outside of marriage in the west
So basically, you're not aware of any of the stuff I'm referring to, and reroute it to what you do know. It isn't the weakest possible interpretation of what I wrote, it's completely out of bounds -- there is no way you honestly think I'm referring to extramarital sex with "horrible, vile stuff" and "excessive dehumanization". And it's pointless and a bit unfair, because I can't show you anything, and even to just describe it in detail would ruin my day.
I don't feel anything I'm "supposed to" either -- including this idea that if someone is into X, and it's legal, you can't say bad things about it, but they can say good things about it all day long. Because "it's a thing", and once it's a thing, it's just there in the world as an item to pick off the shelf and consume, and the cardinal sin is to have any opinions on the choices of other consumers. All that matters is that someone wants something, and that it's legal. People are into things because they are into them, end of discussion, and in many cases also end of reflection.
That's like one "camp", and anyone who has anything to say about that other than "awesome" has be be conservative, religious, whatever. It's like many conflicts, try to talk sense to hawks on either side and they cannot imagine you as anything but a "supporter of the other side". If you can imagine shame and horror only as response to social conditioning, religious upbringing, and so on, you by necessity cannot understand where I'm coming from.
If I had the choice to give an earful to anyone who consumes or makes movies and games and music, as someone who gamed a lot, loves music (but to be honest kinda stopped watching a lot of movies) or to anyone who makes or consumes porn, porn doesn't even enter consideration. But the subject at hand was porn, and while I don't think the person I responded to meant it that way, taken literally they said that any adult site, i.e. all of them, is nothing to be ashamed of. That is the only reason I responded, that's too broad for me to agree.
>here is no way you honestly think I'm referring to extramarital sex with "horrible, vile stuff" and "excessive dehumanization".
You're correct, I don't, because you've completely misinterpreted my comment, my motives, and myself.
The stigma around porn is societal, and that stigma is related to the way that pornography is viewed as deviant from a society which views marital sex as the only acceptable form of sexual relationship.
And that stigma is the reason the "horrible, vile stuff" and "excessive dehumanization" is more difficult to fight and address in porn than in mainstream media, where it is at least possible to gather public awareness and sympathy for victims, and support for regulation to fight them. None of that is possible for the porn industry, because even speaking about it publicly is taboo.
> Speaking of fees... Stripe charges 2.9% + .30 cents per transaction. Some of the billers in the porn industry charge up to 30% per transaction. Yup, 30% (not cents; percent) PER CHARGE. So if we charge someone $1.00 for a 1 day trial, the biller gets 30 cents off the top.
This was a really bad example, as Stripe actually charges more than 30 cents for a $1 charge ;P. More reasonable companies (including PayPal) give you better rates for small receipts; PayPal offers 5%+$0.05 as a "micropayment rate". But yeah: with a better example, this is still clearly a point ;P.
The paypal route made you choose which type of processing the account would be. "microtransaction" account was indeed the 5% plus 5c, and the 'regular' was the 2.9%. One account didn't process both ways.
Would be nicer if paypal just ... adjusted your charges. I used paypal in a situation where some charges would be ~$5, and some would be $50+. The 5% rate applied to a $60 charge was comparatively crazy. I ended up creating 2 paypal accounts, and routed $5 charges to the 'micropayment' account, and others to the regular once. It was against paypal terms of service, technically, but... was also annoying. I was doing enough transactions that the 2% spread was... well... I wasn't raking in millions, but the 2-3k I did some months meant a difference of $50/month or so.
I don't understand why these companies don't have normal names and then nobody will suspect anything.
Like the video chat company that I worked for was called Telecom. Their website said nothing about this, all general words about what a good company they are with happy employees and nothing specific. Put it on my CV with no issues.
Then they have an affiliate website where everything was happening. All charges were direct through this Telecom company. If someone asked about the billing they probably answered something about a phone, extra charges etc.
As someone in the payment industry, find a processor/payfac that specializes in this. They handle all that complexity, they will have multiple processors/banks in the backend to find out who will accept the card. Your frustration is due to lack of who to use, all the pros use such processors. It's pretty much transparent, they also have massive fraud systems, and since they process for tons of sites, if they notice a card doing fraud/multiple chargebacks across different sites, they put a stop to it quickly.
Maybe because the author expected sincere discussion of the problems they are facing, and got a storm of crap dumped on their head by people who spent all of 2 minutes on the issue but already know everything about it and are very judgmental about it. There is no shortage of those on the internet, and dealing with them is very annoying. Not everybody can tolerate such environment.
I wasn't sure about the heading and was hoping this was about general content for adults being broken. I dont think I'm getting smarter faster but the content is going down fast. That's what's great here expect one thing, learn another.
Yes, definitely. I barely use Bitcoins or other cryptocurrencies at all (because USD works great for everything I do), but cryptocurrencies are perfect for this industry because they are
- fast enough. 15 minutes to validate a transaction is sufficient for a porn site.
- as certain as wiring money. There's no chance a customer can force money back from you once paid.
- anonymous. Your wife won't find out in a bank statement, so less chance of "fake-angry" customers trying to force money back.
- The money goes directly to the content creators. No need for sketchy middleman services.
The disadvantage is that most people don't know how to use crypto. Therefore, laymen-friendly online wallets are the solution that basically baby users into uploading cash, clicking a big "send" button, and copy-pasting a wallet ID. I have not seen an online wallet simple enough for the average computer to use, but it's close.
A quick Google search shows a few sites that accept Bitcoin, but they probably make up less than 0.1% of the market. Why don't major sites use cryptocurrencies at least as an alternative option? It seems like a quick and easy 100%-commission payment method to me for the customers that are capable of it.
Very easy to defend, since there are infinite possibilities of what a Coinbase transaction in your bank statement could mean. "I wanted to try out crypto so I bought a takeout pizza" he might say. Not the case with CC-Bill or AcmeMiddlemanHoldings.
And regardless of how the interaction plays out between the wife and husband, the end result will never be a chargeback, so the content provider wins anyway.
> fast enough. 15 minutes to validate a transaction is sufficient for a porn site.
There's a thing called 0-conf where you accept a transaction even before it's included in a block. This is used by BitPay, the worlds largest Bitcoin payment processor, to accept Bitcoin Cash in just a couple of seconds.
It's safe enough (there's always a risk/reward trade-off) for smaller purchases if you just use a few simple heuristics like requiring a sane fee and checking for double spend attempts for a couple of seconds.
They can convert it back into a national currency through an exchange like Bitstamp, paying a fee of 0.25% for conversion to dollars/euros and however much the fee for wiring money is(it's surely less than 1%).
> fast enough. 15 minutes to validate a transaction is sufficient for a porn site.
And what happens in that 15 minutes? Does the user have access to the site in that time? If so, what happens when the transaction doesn't validate? Just lock out their access? Ok. You can download quite a bit in 15 minutes. And then you can just run another fraudulent transaction to regain access.
> - as certain as wiring money. There's no chance a customer can force money back from you once paid.
Which is great for actual fraud. Especially when you make it super easy to do. Like buying coins online and clicking a button.
You do realize the issue is that neither side of a payment fully trusts the other, right? We can't just pass the ball to whichever side when it's most convenient. Cash works because it's in person. You see me, I see you. I hand you cash, you hand me a product/perform a service.
> anonymous
Bitcoin is not anonymous. It's at best pseudonymous. Not to mention, if the bitcoin can reach you, you are reachable. It can be made difficult, but no matter what there has to be a path back to you in order for you to receive the coins.
And you are ignoring that crypto is incredibly volatile. I think bitcoin went from near $20,000 to $6000 in this year alone. Imagine losing 70% of your value just because. That that $5 you collected from Joe Shmoe in January became $1.50. It's why a lot of businesses started backing off of it. It's just too volatile to be used as a currency. And let's not pretend that there's any other crypto worth talking about other than bitcoin. Ethereum, Litecoin, BCH, etc all follow bitcoin.
They can beat off to a free site I guess. Nobody's in that much of a rush. In fact, most pay sites take a few minutes after a CC transaction is made because as the article suggests, their transaction passes through a number of middlemen. Most customers are in fact surprised when they can access a pay site immediately after closing the payment window. Most are happy to wait a few minutes for the email containing their password.
>You do realize the issue is that neither side of a payment fully trusts the other, right?
There are many reputable porn sites and many review websites and communities that support their reputation. The customer cannot be trusted by the website at all, but it is the norm, not the exception for the customer to trust the website.
>Bitcoin is not anonymous
Yes, but for this discussion, it is completely anonymous. Your wife cannot figure out the owner of the porn site's wallet ID. For all she knows, it's a pizza parlor.
>And you are ignoring that crypto is incredibly volatile
You're missing the point. In the day between when the Bitcoin arrives in someone's Coinbase account and when they purchase the subscription, the value is going to change less than 1%. At the end of the day, it's a USD -> USD transfer, just with much much lower overhead than 30-60% as described in the article.
There is a huge difference between 1 minute and 15 minutes. And "use a free site" is not an acceptable alternative.
I'm talking about payments in general. In a transaction online, there is a certain level of distrust. Both sides are trying to verify to the other that they are legit.
> Yes, but for this discussion, it is completely anonymous.
Why not make credit card vendors completely understanding and customers completely trustworthy as well for the discussion? Then they can just use Visa.
> Your wife cannot figure out the owner of the porn site's wallet ID.
Bit sexist. Assuming that it's the man purchasing the porn and the wife isn't savvy enough to realize that either there's no damn pizza or that you paying pizza half with regular currency and half with bitcoin is just kind of dumb. And would effectively make it double the price since the charge on the card is the price of a normal pizza. If you're going to lie, do it right. Just say you invested a small amount. And when questioned later, say it tanked, good thing you only tested $100 or so. That might buy you 5 months of a site that charges a $20/mo subscription fee. After that, you're on your own.
> the value is going to change less than 1%
You hope. Bitcoin has dropped over $1000 in 1.5 hours. And you're ignoring the transaction fee of the payment and whatever the exchanges charge for cashing out. So you're looking at probably around 30 minutes turnaround from the customer saying "I will pay you" to you collecting any actual money.
You can check the balance of their BTC account. If the balance is there and the tx fee is high enough then there is a high probability the payment will post. Its a credit risk for sure, but for only a short period and the consequences of default are relatively benign.
> The disadvantage is that most people don't know how to use crypto.
To expand on this, it's hard to turn crypto into rent. You mentioned the friendly online wallets - they're almost a necessity if you want to accept bitcoin, and then turn it into fiat currency.
The idea of directly paying content producers is great (mumble mumble some middlemen do add value), but it doesn't do them much good if they can't buy a gallon of milk or a pair of shoes.
The customer doesn't need to use crypto for rent or milk. And the customer shouldn't care about the idea of paying content producers directly, that's not the point.
The customer uses a fiat -> crypto exchange/wallet combo service, sends a payment in crypto to the content producer, the content producer exchanges it back to fiat currency. The overhead of this is much less than 30-60% as mentioned in the article, and it's an extra 10 minutes of effort required by the customer, which is nearly identical to the 8 minutes of effort to type a credit card directly into the payment provider.
With this approach, the content producers win big time, and the customers lose 2 minutes, which can be further minimized by laymen-friendly online crypto wallets.
Right, sorry, I wasn't clear. The producer is the one who's going to have a problem.
If I'm SquirtyBoy on PornoTron, I still have to convert BitCoin/Ethereum/Whatever into cash so my landlord doesn't kick me out onto the street.
(Unless you mean consumers should be paying PornoTron in cryptocurrency, which PornoTron then exchanges into fiat currency, and then pays SquirtyBoys in that. I think I mistook what you meant by "middle men" - I thought you meant things like PornTube, whereas you apparently meant Stripe/Paypal/etc.)
No company that accepts Bitcoin I'm aware of holds cryptocurrency for more than a day. Even my own company cashes out in a matter of hours via BitPay. Of course, they would exchange every day to their USD bank account. This is completely automated at such companies.
See the article for what I mean by middlemen. Stripe/Paypal are not middlemen for adult entertainment companies.
It's a perfect fit for a peer-to-peer electronic cash system (title of Bitcoin's whitepaper) yes.
This is the problem with permissioned transactions which cryptocurrencies remove. The only thing missing is adoption.
With the fees and issues I don't understand why the porn business isn't pushing harder for cryptocurrency use on their sites. There's huge amount of money to be saved here.
It's almost like being paid a salary in an unregulated Internet Buck that landlords and grocery stores won't accept would make things difficult for people. ;-)
Bitcoin is not viable due to it’s high transaction fees and low transaction rate. Some random Alt coin might work, but getting PornCoin adopted is difficult.
You don't have to have PornCoin, they can use an exchange like Binance which has a lot of different currencies supported, and the customer could pay in any one of these. Or they could use Request Network if that pans out.
And lastly, Bitcoin fees currently aren't large and you can get a confirmation with a few cents fee. That might stop being so if it becomes too popular again, but if off chain solutions like Lightning Network pan out, then that'd be sorted out.
For the average person to buy something you need to buy a coin, that's 1 transaction on the block chain. They need to buy something with that coin that's transaction #2. The merchant needs to sell that coin that's transaction #3. Granted #1 and #3 can be much larger reducing the costs, but the average user is likely to be splitting #1 across a small number of transactions.
Further 2 exchange fees sit on of those 3 coin transactions.
In theory you can have an exchange handle all 5 of these transactions, but then your using the exchanges book's not a block chain.
This is such a shame because the porn industry used to be at the forefront of technological innovation.
Quite often, the AVN Expo had better actual technical content than CES (which was held at the same time).
The porn industry was the first to adopt videodiscs, VHS, DVD, handheld cameras, the web, online payments, etc. Basically, if any new technology was useful for porn, it was going to catch on.
The "tube" sites are more exploitative than the rest of the industry in that they don't actually pay the performers, they're simply piracy, and because small independent producers don't have the political leverage to impose an equivalent of content-ID on them they stay that way.
People who upload content and content producers have no necessary relationship. Paying uploaders is not a rebuttal to a charge that tube sites are dominated by piracy and don't pay content producers.
The tube sites have (official?) channels for all the big porn studios + they have this "verified amateur" feature as well. That's not all piracy afaik.
The problem is its just like Youtube though right?
You build a gigantic audience on pirated content, then once you are many people's go-to destination for porn, you can allow the big companies to have official partnerships.
They are kind of stuck with that partnership because of the size of the Tube sites audience, which they built illegally. They also CONTINUE to post pirated content everyday, which sustains that audience and prevents those companies from just making their own TUBE site. But because the pirated content posted today will be from users, and the TUBE site will eventually take it down, the TUBE company is not a bad actor in this situation.
At the end of the day, I can still watch the newest Netflix Standup special I've been waiting for, for free on Youtube. And I'll still catch the new Adult Avenger's Parody on another TUBE site for free, without the consent of the companies that paid to create those films.
Update: I found an archived link [2] as I scrolled further below.
I may have missed the boat as this is what can be seen on the original post:
"I've deleted the post because some of you are [insert expletive]. The client I do work for is not doing anything illegal. There's no money laundering going on. It's a more legit business than some big-chain stores I shop at."
Anybody care to provide a gist of what was originally posted? Tried cached version [1] but contents are still the same.
Something like Stellar should have a great market here, and in the legal cannabis market as well (check out the first commenter on OP's link). Every new innovation in the websphere starts from porn, so why not cryptocurrencies as well.
Still doesn't solve the problem of people with shared accounts and then one half pays for porn without telling the other. It happens so often UK banks have ways of looking up subscriptions.
People would reverse the transaction, still enjoy porn and the company goes out of business.
> Would 3-D secure solve the chargeback problem?
As far as I know, that's a European only thing? It shifts it to the consumer, but people get very angry on the phone to the bank causing a higher chargeback rate.
3-D Secure is not a european only thing. If someone successfully signs up with 3-D Secure, the onus is on the issuing card's bank, not the merchant, so that would be ideal.
The problem we ran into was that since the 3-D Secure verification (which is a page you redirect the surfer to, or an iframe or similar) is handled by the credit card issuing bank, each page is different, and since no one actually uses 3-D Secure, when we tried to implement it, it mostly didn't work.
Reducing chargebacks is great, but if you lose 30% of your sales by redirecting them to broken pages, it defeats the purpose.
One of the points of 3D Secure is that it shifts the responsibility from the sells to the card company or bank, not necessarily the customer. So I don't believe the bank has much incentive to do a chargeback, as they will be the ones covering it.
Also I don't believe chargeback on a 3D Secured transaction doesn't count as a strike towards the seller, not to sure about that one though. It would seem reasonable not to count it, seeing as the seller was in good faith, and the card company claims to have verified the buyer... but the rules of online credit card payment are anything but fair.
Two thoughts about all this pop up. You'd think porn companies would charge with sensible names?
And I'm surprised Stripe wouldn't build an off brand company to handle this part of the market. Seems like it's just giving up on a lot of money for 'reasons'
Though similar problems exist in business for things like weed companies. Banks don't want to touch em.
Seems like it's just giving up on a lot of money for 'reasons'.
There's no way to ascertain how much profit a payment provider makes based on the transaction cost. That 30% fee might be necessary in order to make a profit after covering all the expenses incurred by dealing with vast amounts of fraudulent transactions, chargebacks, lawyers, etc. Maybe Stripe aren't giving up a lot of money; maybe providing payment services to the adult entertainment industry is just really expensive per transaction.
As is pointed out in the article, the issue is the chargebacks. If you have to many, the credit card processing company (I don't know who Stripe uses) will close your account. Both MasterCard and VISA will also shut you down if you have to many charge backs, or to much fraud.
Stripe would have to setup an entirely separate legal entity to do this. Otherwise they would risk not being able to process ANY card transaction, because the porn sites have to many chargebacks. It would potentially be a risk to their primary business.
I think Stripe is "giving up" on the money for the same reason many others are: It's simply not worth the hassle. If you have a nice income doing payments for non-adult sites, why bother?
I don't think it is Stripe that is the issue, it is up the chain. Mastercard, Visa, Amex, etc... also remember that we wanted to be able to take cards from all over the world, so that was another limiting factor in who we dealt with.
We had to do all of our own bare metal hosting cause at the time cloud companies wouldn't touch us.
What we ended up developing was our own micro currency 'kinks', which enabled a lot of other possibilities for us, like pay-per-minute video. Charge one larger purchase for something tangible and it helped prevent chargebacks.
We were also one of the first companies to do near realtime, live streaming 1080p HD video. I remember having to search around for an HD mixer cause nothing existed yet.
The problems with legal cannabis companies accessing credit card systems have nothing to do with banks worrying about public perception or societal issues. It is entirely because it is federally illegal, and banks are federally regulated.
If you contact them about err... things that may be close to the line, they do have links with companies who are willing to take on a higher risk business
I think margins are going down and there are plenty of stories of women being completely stuck in a world they don't want to be in, some of them actually struggling with mental issues. Sure, some probably like it but I can understand that companies prefer not to be associated with a world that seemingly contains a lot of misery. There are plenty of documentaries about the industry, they don't paint a rosy picture.
I understand the down voting and I also understand your response. But wouldn't it be nice if there were fair-trade porn sites? Where we know people are treated an paid well? It's insane that there is so much for free while there is so much work involved.
In Montreal I see a lot of junior developers making quite a bit more money than they would in other companies. I don't know any senior developers in the field though.
Montreal unique. MindGeek here for cheap worker. Why pay american so much higher money and stock when canadien work for 100000 US dollar less and no stock. Government also pay back much amount of salary. Price for company finally maybe 40000 US dollar for each year for developer. They do have senior but many more junior.
Since the Credit Card companies & banks create lots of problems as soon as sex is involved (see FetLife's misadventures in HN previous articles for instance) in addition to the big chargebacks issue, and given that customers lie a lot (because they can), I think that the best solution for pornsites would be something similar to prepaid cards used for Google Play, consoles networks and the like.
You buy a card, this puts a limited amount on your "PornPlayButDontSayItIsForThat" account, it's easy to control, anonymous, limits risks even if the account is compromised or the porn site dodgy (hidden automatic renevals & the like) since at most you'd lose that limited amount, then you can buy porn without the issue of the SO (a big problem it seems) and without any banks (or whatever) knowing about your -still badly perceived- habits.
In fact, I'm surprised such a system (not specific to a porn site/network) is not already widely available. Of course, it would not present itself as "the Porn Prepaid Card" because of the stigma... Note that some sites/networks accept gift cards already (I've checked), but it's not very practical (not fine grained, you must use the whole card) and they don't accept ALL cards, what do you do when you're living in France and they only accept American gift cards? You can also buy "tokens" in many sites (especially Webcams) but they still require a CC, so the problem is not solved. A more general "ePurse" system would be better.
This is much more realistic -IMO- than using Bitcoins or the like (too difficult to use and too volatile).
Of course, to REALLY solve the problem you'd "only" need people to stop seeing sex (and porn) as bad, dirty, taboo, etc. But this won't happen anytime soon :-(((