Reminder that NSFW content has disproportionate amounts of fraud and chargebacks. This is also why Stripe, PayPal, Visa, etc. hate it just from a business perspective.
That's "common knowledge" but I wonder how true that is.
I have a feeling NSFW attracts more problems from a "moral", political and pressure groups perspective than actual fraud and that's the main reason companies don't want to touch it.
The rate depends, but take OnlyFans: They cascade (I.e. spread out) payments across at least 3 providers, and automatically rotate between them to avoid any of them getting a rate too high.
Seems like quite a bit of logistics if it was not really an issue.
That doesn't really make sense unless they have a way to flag higher-risk charges and route them to a processor that is more risk-tolerant (and usually more expensive). Eg. I could see segmenting the charges for the first month or two into a higher risk bin, and then moving recurring customers into low-risk bins on processors with cheaper rates.
There is a difference between straight up porn and fan-service (OnlyFans) and the adult artwork and erotic educational content on Gumroad. I would be surprised if these suffer from the same amount of chargebacks.
I know. But I also know that if NSFW content makes up the majority of your store and/or sales, it behooves you to find a payment processor who accepts that risk (albeit at a higher cost).
Funnily enough, I bought lots of stuff on GumRoad and wasn’t aware that NSFW is huge there. I only knew it as the platform for online courses, ebooks and mediocre notion templates
Then the artist can take on the risk by establishing their own business and finding a payment processor who accepts that risk instead. Will they? Won't they?
If everyone on your platform does that, you no longer have a platform though.
Banning/outlawing the majority of your users, no matter how annoying or costly they are, is generally not a winning move for a platform that lives off its users.
So why not offer payment methods without chargebacks? Here in Europe, i pay 95% online payments with direct bank transfers, which do not offer chargebacks.
Because in America, direct bank payments are a pain, and come with the risk of more money being taken out than displayed onscreen. Your bank account information might also get re-used.
There’s a reason why it’s common advice to use credit cards and not debit cards, simply because the fraud protections and laws are stronger.
But if you can't accept credit cards for some reason, no one would tell you to close up your business instead of accepting debit cards.
"This specific category has a high risk of chargebacks, so it's using a less convenient/safe system" does not seem like an absurd thing for a payment processor (or a storefront) to say. Services like Paypal support direct bank access for payouts, right? The systems may not be ideal, but payment processors are not so uncomfortable with them that they won't support them at all.
This doesn't really explain why payment processors couldn't restrict payments for adult material to a subsystem or charge higher transaction fees for it specifically. If this is just about risk, then... risk can be priced. It doesn't seem that complicated. You calculate the chargeback rate for the category and you price transactions for that category accordingly. Part of the financial cost of payments online goes into subsidizing risk, this is already something that we all do every time we use a credit card on a service with transaction fees.
Stripe couldn't have a different pricing tier for payments or businesses operating within specific categories?
I have a feeling NSFW attracts more problems from a "moral", political and pressure groups perspective than actual fraud and that's the main reason companies don't want to touch it.