The problem with major Credit Card companies is that they're all American and that the US of A is incredibly moralistic. For the sake of convenience, I'm considering PayPal to be part of the same club of moralistic knobs.
It's virtually impossible to set up any kind of online shop without accepting one or more of PayPal, MasterCard, Visa or AmEx. As soon as you accept money for anything one of these FOUR(!) financial behemoths objects to, you're out of luck. You'll be forced to stop using them, and as soon as you do you'll see your revenue drop dramatically.
And why? All because a couple of old men in suits think that they know what's "acceptable". Nevermind the legalities. PayPal makes it impossible to sell pornography, which is perfectly legal in large parts of the civilized world.
If that logic was the case, they'd simply have a fraud metric that if you exceeded you'd have your account disabled.
As someone who works at a company where we literally have thieves testing cards on our site on a daily basis, any site that accepts credit cards has a high rate of frauds as thieves test cards. Somehow, we manage not to pass these cards to credit card processors (and no, I don't mean we use Stripe. I mean we have our own in-house anti-fraud process since we deal with the processors through a merchant account at a major bank like FL does). Porn companies have filtering in place as well for the same reason.
It would be a solid metric instead of "morality" if the cause was what you believe it to be.
Do you have a large percentage of people who legitimately buy stuff from your website later claim they didn't? This is not your standard fraud model: with porn you see a remarkably large amount of "oh shit, someone (usually my significant other with whom I share my finances) just saw this charge on my card, which is totally not OK for whatever reason, so I guess my best strategy here is to totally disavow the charge and pretend it was credit card fraud".
A second issue porn has which most websites do not is related: customers actively do not want their statement to accurately state from whom they purchased the product, lest someone sees exactly what their fetish is simply from reading the credit card report. This drastically increases the chargeback rate from people who legitimately do not remember what they bought and do not recognize the charge (particularly if the service uses subscriptions).
If you want to accept payments for porn, you need a fundamentally different fraud model than for a standard website, no matter how weirdly digital or in high demand: this is not about scammers or about black card fraud, this is about basic lies and deceipt. I see no real reason to claim PayPal must go out of their way to support this.
A company which has is CCBill. They sign you up as a "high risk" Visa card merchant (which is an upstream notion supported by Visa), and then are much more hands on in the checkout process than a normal credit card processor, with a website people can use to look up and manage their subscriptions to websites (so like, imagine if all Stripe purchases required you to use their web form, showing up on the customer statement as only "Stripe", and if the customer could then go directly to stripe.com, enter their credit card details, see they had a subscription with you, and cancel it; to be explicit: PayPal does not have these restrictions, even though they might seem similar to you).
(To note: it does bother me somewhat that PayPal doesn't go out of their way to support some of this stuff, but as long as the actual credit card processing firms support it and there exist banks willing to allow it, I don't get pissed off about it as it is totally possible for you to do it yourself... it isn't like you are locked out of the actual network effect of credit cards, which is what is important; and given that there even exist easy well-supported full solutions out there like CCBill, it barely seems like a problem.)
> A company which has is CCBill. They sign you up as a "high risk" Visa card merchant (which is an upstream notion supported by Visa), and then are much more hands on in the checkout process than a normal credit card processor, with a website people can use to look up their subscriptions to websites (so like, imagine if all Stripe purchases required you to use their web form and then showed up on the customer statement as only "Stripe", and if the customer could then go directly to stripe.com, enter their credit card details, see they had a subscription with you, and cancel it; to be explicit: PayPal does not have these restrictions, even though they might seem similar to you).
> (To note: it does bother me somewhat that PayPal doesn't go out of their way to support some of this stuff, but as long as the actual credit card processing firms support it and there exist banks willing to allow it, I don't get pissed off about it as it is totally possible for you to do it yourself... it isn't like you are locked out of the actual network effect of credit cards, which is what is important; and given that there even exist easy well-supported full solutions out there like CCBill, it barely seems like a problem.)
> CCBill noted, "It is a violation of CCBill's AUP to reference 'force' in this context as it implies a non-consensual situation (fantasy or non-fantasy). In order to be compliant with CCBill's AUP, please ensure all references to forced acts are removed."
> The posting or display of any image or wording depicting or related to extreme violence, incest, snuff, scat or the elimination of any bodily waste on another person, mutilation, or rape anywhere on the site in a sexual or erotic manner, including the URL and meta tags.
The censorship guidelines they are applying are literally those of CCBill as per their terms of service:
> Do you have a large percentage of people who legitimately buy stuff from your website later claim they didn't?
Do you not understand that chargeback rates are a calculable, actionable metric? Or was my reference to the fact I thought worked in comparable businesses not an obvious enough hint that I've worked for both physical goods and ummm digital products of an intimate nature?
There is no real legitimate reason for their behavior not being modeled entirely on actionable metrics visible to both parties. Worse, they know and anyone who has dealt with the credit card processing on the merchant end knows it. Its purely, at this point, little more than a political issue being wielded where laws are unpopular.
> This is not your standard fraud model: with porn you see a remarkably large amount of "oh shit, someone (usually my significant other with whom I share my finances) just saw this charge on my card, which is totally not OK for whatever reason, so I guess my best strategy here is to totally disavow the charge and pretend it was credit card fraud".
You think people don't do this shit with lingerie, sex toys, and anything else along those lines that might indicate an affair. K.
Every other non-credit-card-company pulls the products I've worked with based on return/chargeback metrics that discriminate this problem with perfect ease and shove the full cost on to me. So do credit card companies by the way for anything that don't deem "immoral" in case you were wondering.
The metrics exist, they simply do not use them for this purpose when they target things in this manner.
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> A second issue porn has which most websites do not is related: customers actively do not want their statement to accurately state from whom they purchased the product, lest someone sees exactly what their fetish is simply from reading the credit card report. This drastically increases the chargeback rate from people who legitimately do not remember what they bought (particularly if the service uses subscriptions).
Yeah. that isn't just a porn thing. Its anything potentially sexual, including lingerie. Please let me know when the credit card companies start banning places like Victoria Secret. The difference here is lingerie is too "mainstream" for that to be a viable target. And if you think companies like Amazon doesn't pull lingerie for high rates of returns, claims of "defects", and/or chargebacks, you've never tried to sell the stuff. This stuff has an operational cost but for purely digital goods (porn) its quite a bit cheaper as well.
> For your privacy and protection when you place your order with BedroomJoys.com your credit card will be charged by Ryhma LLC and your order will be displayed on your credit card statement as Ryhma LLC.
> We do not include our name on packaging and/or shipping labels, discreet plain package displaying only “GL” and no reference to lingerie anywhere. Discreet billing displaying only “GL” and no reference to lingerie anywhere.
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> If you want to accept payments for porn, you need a fundamentally different fraud model than for a standard website, no matter how weirdly digital or in high demand: this is not about scammers or about black card fraud, this is about basic lies and deceipt. I see no real reason to claim PayPal must go out of their way to support this.
I'm talking about merchant accounts with a real bank and/or dealing directly with credit card companies. The banks aren't the ones that place pressure on these people. Its Visa and Mastercard and so forth. Fetlife wasn't operating through Paypal but through something like you suggest and has used CCBill in the past and the consent/non-consent definition is part of how CCBill operates.
Financial companies deal with far more complex risks than this every day. Making a fraud-heavy account profitable is as simple as demanding a surcharge.
Maybe some of the smaller guys don't have the resources to manage an account with the extra complexity. But EVERY company giving up a juicy profit opportunity? No way. The answer they're giving is the correct one: they simply aren't allowed to process payments from adult websites.
If this was true, why aren't all the other high-fraud services that get declined simply having a surcharge demanded? Does the moralism of credit card companies extend to horoscopes, debt consolidators, tour operators, and infomercial/information products?
For this explanation to be compelling, it needs to capture the fact that porn sites aren't the only high-risk category for which vendors are routinely denied or evicted from merchant accounts. You haven't done that yet.
It used to be impossible to pay for porn with PayPal, however last year (I think) one of the biggest names in gay porn started accepting them as a payment method, so I guess something changed.
Two or three big players in the credit card market can effectively shutdown a business.
Honest question: do we need better enforcement for the First Amendment rights in the current digital era? Shop owners cannot decide who enters in their shop, should digital service providers be allowed to discriminate?
The same happens when someone is banned from Facebook and Twitter: of course there are other options, but he won't be able to reach 95% of the Internet audience.
Edit: maybe should've spoken about a "different, active enforcement" rather than "better enforcement".
Businesses aren't allowed to discriminate against protected classes, but can discriminate against non-protected classes, and can apparently even impinge on protected classes in some ways when their restrictions aren't arbitrary (are tied to some reasonable business concern) and are applied universally.
These boundaries don't appear to have anything to do with the First Amendment.
One novel way to think about the First Amendment is that it constrains two specific actors.
1) It explicitly constrains the US Government.
2) It implicitly constrains anyone who approximates the coercive power of the US government.
#1 is self-explanatory.
#2 implies that, in the US, anyone who attempts to use overwhelming coercive power of any form to silence speech tends to get looked on poorly by the law.
If Fetlife has a fraud rate that approaches normal and the banks cut them off anyway, it would be an interesting court fight.
> Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
These boundaries have nothing to do with the first amendment.
You didn't get my point. I'll try to make it clearer.
Nowadays the right to free speech is enforced in a passive way, so-to-say: "Congress shall make no law [...] abridging the freedom of speech".
However the Constitution was written in a different era, when doing nothing to abridge the freedom of speech was effectively granting freedom of speech to everyone. Today on the Internet a few corporations can effectively abridge one's freedom of speech.
So, what I am asking is: do we need a stronger and active enforcement of the free speech rights? An active enforcement in which the Government mandates that all businesses must give equal voice to citizens?
Apparently that's not something new, see mfringel's comment above:
"#2 implies that, in the US, anyone who attempts to use overwhelming coercive power of any form to silence speech tends to get looked on poorly by the law."
Edit: guys, that's not Reddit, try not to downvote a civil debate.
You are proposing the creation of a new right entirely, not merely stronger enforcement of existing rights.
Note that I am not taking any position on whether such a new right would be a good or bad idea. I am merely pointing out that what you envision is in no way within the scope of the existing First Amendement.
"Honest question: do we need better enforcement for the First Amendment rights in the current digital era?"
No. What we need is a bill of rights to protect us from corporations that would censor us and otherwise work with the government to oppress our rights.
Plain and simple, all big business needs to be regulated at this point. They've proven themselves unworthy of being given free-roam.
It's not lack of regulation that causes businesses to shut down accounts associated with "indecent" content. It's heavy handed regulation that means payment processing companies have to glance over their shoulder every minute in fear that some conservative regulator or lawmaker mounts an effort to attack their business.
The main evidence is to take these companies at their word instead of assuming they're trying to cover something up. They're willing to allow payments for 90% of fetishes but exclude the other 10%. Are they really drawing the line based on the rates of fraud in each fetish?
Cases like the FetLife are illustrative. You can also look into f-list, a furry website which ultimately had to decide not to take any payments when every major processor rejected them. The key point is that companies are required to distinguish between "pornographic" and "obscene" content using a vague case-by-case smell test. So you sit down with a lawyer and kinda guess what's OK and what isn't and cross your fingers the credit card companies swallow it. That's exactly how this story was resolved. You can learn more about the law yourself by looking at an example ToS from Square and some guides to federal obscenity law.
> The main evidence is to take these companies at their word instead of assuming they're trying to cover something up.
I'm not implying that the are trying to cover something up, but it just seems absurd to me that a payment company may be liable for what its customer are doing, and I would like some clear, circumstantial evidence of that.
The laws you are referring to prosecute whoever detains, distributes, sells, imports, mails, transfers obscene material.
However I cannot see how payments providers can be liable, can you produce some evidence in this direction?
I am not a lawyer, but it seems to me that the payment provider is no more guilty that the electric company powering the servers.
If there was ever a use for [insert favorite crypto currency here] gaining adoption, the killer feature is that payments can't be halted or frozen to accounts.
It sounds like they got hit by people who were unaware of what FetLife is following due diligence in processing card transactions. As far as I can discern, it's just a social network with a darker focus, which led to an overreaction from a card network.
Why haven't you embraced Bitcoin to get away from the restrictions of the banks / credit card companies? - @Eibon
Answer:
We used to accept bitcoins through Coinbase. They dropped us a year ago because we are a kinky site. No joke.
If a Bitcoin site wants to accept credit cards, then they have to adhere to rules set forth by the credit card companies.
Yes, there are other options, and we are going to look into them, but options like Bitcoin are a nice to have and not currently a viable replacement for being able to accept credit and debit cards on FetLife, no matter how much one might want to believe otherwise.
When we offered Bitcoin as an option, it was responsible for less than 0.1% of our daily transactions.
While this may be true, Coinbase isn't synonymous for Bitcoin -- the true "idealized" version is that you generate your own BTC transaction system (or use an off the shelf one?) -- not use a processor (ergo, not Coinbase).
There are also other options such as various OTC trading desks or Gemini's daily auctions. And finally, there are several other full-service payment processors that they could try besides Coinbase.
Coinbase was a really bad pick for them. It's almost certainly the single least likely option to be able to support fringe businesses, due to their close relationship with banks and credit card companies.
You only need to cash out the amount you can't spend in bitcoins. The more things you can buy in bitcoins, the less powerful politically-controlled money becomes.
Can't they just pay boringCorp Ltd. in Bitcoin for use of their "bussiness solution" (that is managing your infrastructure or providing the bitcoin transaction platform). The boringCorp Ltd can cash out for ActualMoney(tm) and I'm sure there is some way of accounting to get that money back to where it needs to go.
Still don't see why they can't just accept bitcoin. Buying BTC via credit card is trivial via Coinbase (and they won't ban customers), and while they won't get 100%, they're much more likely to get quite a bit more than 0.1% even if BTC is the only payment option.
If it is provable that Coinbase is being used as a means of bypassing VISA et al's restrictions on sites like FetLife, what is stop VISA et al doing the same to Coinbase?
The problematic part for Coinbase is probably automatically selling the coins and depositing USD into their checking account. There are other vendors to handle the Bitcoin itself.
In particular, I think Verotel does Bitcoin processing for adult merchants.
The interface between me receiving cryptocurrency and me paying bills and food with said cryptocurrency is problematic. I get the feeling we are stuck in a credit card world. I cannot imagine a big payment outfit that gets accepted by merchants to not have credit card companies or deal with merchants without bank accounts.
This is really one of those issues that cuts across party (in the US 2 party system) lines. We've seen the crackdown on gun shops, marijuana merchants, and adult industry companies. I don't think I've heard questions asked my the big media to candidates about their feelings toward these type of laws.
I might not like some of these businesses, but every legal business should be able to get paid. I am not comfortable with a politician's beliefs affecting the banking of a legal business.
Normally, I would like the market to handle this but as the article points out, this is not really a free market. "The banks maintain a shared list that contains all merchant account closings." makes sense from a fraud point of view, but it is a process without appeal. Second, banks have a history of legislation requiring fairness of lending. It is probably time to look at the credit card companies with the same eye.
The issue with firearms sales seems to be at the payment processor level, not the credit card issuers. The big names (e.g., Authorize.net) categorize firearms sales as "highly regulated industries" - even though they really aren't.
There are payment processors out there that specifically work with FFLs (Federal Firearms Licensees, a/k/a gun stores), but they charge a couple of percent higher transaction fees, and they just seem a little skeezy. A lot of them also service the adult industry.
What exactly is the difference between enforcing morality with law and enforcing no morality with law? Morality is an incredibly subjective thing between differing cultures, I don't think it has a place in the justice/civil law systems.
It's not dark at all. It's just a place for people to list their kinks. Nothing nefarious. It's very popular in the kinkier sub-communities of the furry fandom.
edit: I got this mixed up with F-List, which is similar in function with a narrower focus.
There is definitely a seedy (read: illegal) element to the site which seems to have been going on for years without concrete efforts on the staff's part to eliminate. I'm not talking about kinks, I'm talking about pedophiles and rapists.
We need more sex positivity in this world. While I agree that some of the contents of Fetlife was objectionable from a legal standpoint the owners did a good job at getting rid of those things.
I think the objection today has mostly to do with the fact that they want to tell us what we do in our bedrooms.
> I think the objection today has mostly to do with the fact that they want to tell us what we do in our bedrooms.
Yeah we already see the first signs with Trump defunding abortion organizations. However I don't believe Trump to be behind this, much more Mike Pence.
And I'm really, really afraid that someone will either successfully impeach, maim or kill Trump - because then Mike Pence will succeed him, without anyone to check his powers, given that he'll have the entire extremist religious people in the GOP behind him.
I live in Indiana, and I've been living under a Pence government with a Republican supermajority for the last 4 years. It's better than Trump. Yeah, Pence picks ridiculous fights that cost the state a lot of money and he's a socially regressive person who wants to impose his views on everyone, but he's not an unhinged, unstable narcissist. He doesn't make all of his policy within minutes of it being shown on a cable newscast. I'll be able to sleep at night when Trump is replaced by Pence.
This x1000. Policy-wise, I disagree with Pence on just about everything, but I would take him in a heartbeat over Trump. Pence actually has experience governing and seems to be capable of compromise and handling criticism (see: the Hamilton incident).
Trump on the other hand is a total wild card. He's just as likely to blow up and cause all kinds of unintended consequences as he is to actually accomplish the goals he claims to be aiming for.
Trump isn't that unstable, I believe. He's just blindly following the call of profit (except the pussy-grabbing and sexual assault stuff). Most of the decisions of him and his team up to now can be classified as "will make Donald Trump or his team money in some weird way".
And I believe that this will land him in jail or impeachment more sooner than later.
Trump responds to stories from cable news by making policy on the fly. Trump called the director of the National Parks system to tell him to produce pictures that show more people at the inauguration. Trump sent Sean Spicer out in front of the press to lie about the size of his inauguration crowd. None of these make him money, and they show instability at a level that makes me uncomfortable in the White House.
It really isn't. Fraud risk is something that can be actuarially managed by setting appropriate fees and surcharges on at-risk sites. It would be a huge profit opportunity if they were allowed to take it.
This is part of a broad effort to moralize what we are allowed to buy and sell online.
I doubt the concern was fraud risk. Fetlife has been accepting cards for long enough that they should have data on the Fetlife fraud rate specifically, so wouldn't have any reason to blindly apply a sex=>fraud policy that they would if they Fetlife were applying for the first time.
It is probably a legal risk from laws that hold them liable for certain merchant behaviours.
I am a member of the FetLife community as well as an HN reader. First, let me clear up some misconceptions about FetLife that people on here may have.
It's not a porn site, or at least not primarily a porn site. The UX is a lot closer to that of Facebook but specifically for kinky people. If you go to a kink conference and meet someone, they will likely ask for your FL name to connect with you (incidentally Twitter is the other popular mechanism for communicating with fellow kinksters).
FL has a subscription model, and the main benefit you get out of that is the ability to view other members' posted media better. There is a section of the site called Kinky & Popular which is similar to Reddit's front page. Since people can Love (e.g. like/heart/etc.) their friends' pictures and videos, some become popular and land on this front page. Viewing more than the top 200 or watching the videos requires a subscription of $5/month. This section is dominated by media of pretty, skinny, submissive women, and can be seen as having porn-like content. Note that what ends up here is purely moderated by the community and is not promoted by the FL staff. The people whose media ends up here do not get paid for it.
FL until recently has had a very loose content policy. Things like blood play, consensual non-consent, rape fantasies were all allowed. Illegal things were not: no underage media, no snuff, etc. But people were free to discuss their fantasies, their kinks, etc. without much restriction. Whether you agree or disagree with stuff that gets someone off, you were free to discuss what you want and fantasize about what you want, as long as what you are posting violates no US laws.
FL serves an important purpose to our community: it is a place to share events and local community knowledge, to keep up with people, and importantly to identify abusers. This is the main benefit I see in it and it would be the biggest loss if FL went under.
These latest developments have obviously put a damper on things at FL. They have contacted several groups that are able to advocate for them and give advice, and even the EFL at one point was involved. However, the outlook is bleak. Sadly, the community is not united in supporting FL due to seemingly arbitrary content restrictions, and FL is unable to provide a reasonable level of service without those. If someone knows a way to help this community, please post it here and I'll do my best to point it out to the powers that be there. I am not affiliated with the FL staff, just a user, but they do talk to the community freely and frequently.
There are things that, in the interest of global freedom, need to be taken out of the hands of corporations and government, permanently, forever. The transfer of value is definitely one of them.
This has more front-loaded backstory than a recipe post at Pioneer Woman Cooks, but it sounds like a harbinger for Puritan effects on commerce. Who could be next on the list of these card companies? The cannabis world already has their own troubles, so maybe the ratchet will next tighten on them. That a criteria for canceling an account can be "Illegal or immoral," like those are synonyms, is telling.
> The cannabis world already has their own troubles, so maybe the ratchet will next tighten on them
IIRC cannabis merchants can't even open bank accounts, much less accept credit cards. The only way that they can be annoyed further is by restricting the amount of cash they can hold in the store - which actually would make sense, given that a pot stop filled to the brim with cash is a prime target for gangsters.
In Washington state, at least, a handful of regional credit unions allow deposits from cannabis businesses, and it looks like Colorado may have recently-ish started allowing the same. This, specifically, is for business accounts. The transactions with customers themselves are all in cash.
You're correct. AFAIK all those pot shops in Colorado for instance are cash based only. And have vaults built to store all their cash because the banks won't touch it. There was an episode on Vice TV that touched on this I believe.
There was an amusing tidbit in CNN's High Profits (I think it was) where the Colorado tax department was having to put on extra security because the pot shops were having to pay their taxes by physically handing over bags of cash.
When legalization gets to my state I hope I have the foresight to have the planning and financing in place to be the first dispensary to open here.
These things are just redonculous cash cows.
There is a lot of escorting on Fetlife, a quick check of the site will reveal plenty of prostitution which is why I didn't apply there for a job when they were once advertising for Rails devOps people with a gigantic salary(for Canada) and I went through the site to check it out. Too risky to end up like Redbook people who got arrested.
FetLife acts more like a porn/escort site than a social network in many respects. Its unfortunate since a sex positive kink community would be a great boon but they all seem to get seedy when they allow RL nudity/discussions.
I wonder if a no RL rule outside of things like clubs, etc. that are larger organized group activities with physical presences and business licenses would have been the "real" solution.
Consider their market. It's one thing to send a transaction which is in bank and payment processor records, but at least is mostly anonymous on the other side. It's another to send a piece of paper signed with your name, saying you're subscribing to an online fetish community.
Really? I haven't seen a cheque in years (also Canadian). I've been renting privately for years, and it's always been accomplished via email money transfer.
Why not Bitpay? I'm not associated with them, and have never been on the merchant side of the transaction, but it seems like a 'safe' bitcoin option. And based on my quick read of their merchant TOS[0] bitpay shouldn't (in theory) have an issue with the nature of FetLife's business.
As an aside, it's fun to watch a bunch of old, technically-illiterate and conservative financiers unknowingly sow yet another little seed of their own destruction. I guess being at the top of the heap can make one feel invulnerable...
They did try Coinbase before and said that it accounted for less than 0.1% of their transaction volume. People just don't use BitCoin enough. I imagine if it was a higher percentage, you could make the case that switching to BTC-only would drive it higher, but at such minimal numbers, staking your entire business on it seems like a bad risk.
I started hearing about this several days ago via a subreddit. There had been some confusion//discussion about what was going on regarding the group deletions.
It's virtually impossible to set up any kind of online shop without accepting one or more of PayPal, MasterCard, Visa or AmEx. As soon as you accept money for anything one of these FOUR(!) financial behemoths objects to, you're out of luck. You'll be forced to stop using them, and as soon as you do you'll see your revenue drop dramatically.
And why? All because a couple of old men in suits think that they know what's "acceptable". Nevermind the legalities. PayPal makes it impossible to sell pornography, which is perfectly legal in large parts of the civilized world.