[GuB-42]

Porn is notorious for the amount of credit card fraud that is happening. It is evident by the high fees that "adult friendly" payment processors charge. See https://ccbill.com/pricing

So: high risk of fraud, legal risks (financing child porn, human trafficking, etc...) and not great for the image of a "respectable" company

[stickfigure]

Back in the mid 2000s I was the CTO of a large player in this industry. It's not true.

The high fees are purely because supply is constrained; Visa declares certain industries "high risk" and limits merchant banks to only allow a minor percentage (IIRC, something like 20%) of their transactions to be in this category. The designation is not empirical; our chargeback rates were extremely low, especially compared to online businesses.

This designation is a political issue. Fraud is not actually the problem.

[brookst]

Any actual data you can share?

My understanding from friends in the payment industry is that the “high fraud rates” are just people lying to their credit card companies when their spouse / whoever questions the charge.

If someone has the ability to process fraudulent credit card charges, why in the world would they waste that opportunity buying $20 of digital porn rather than a physical good that can be sold?

I believe GP that the issue is just pressure from evangelicals resulting in a de facto boycott of the woke porn virus.

[qingcharles]

I know people who work in this space. I have seen the actual data. The chargeback rate for these sites is incredibly low. The sites themselves will issue their own refunds without question to avoid getting the card companies involved.

It is 100% a PR issue, not a fraud issue.

[rsynnott]

I mean from the processor's POV it hardly matters _why_ there is high fraud, just that there _is_ high fraud.

[brookst]

Sure, and that's why rates are high. But the person I was responding to was asserting it in the context of "all porn is a massive criminal operation."