[ramesh31]

>Why haven’t game stores just spin off separate store front for porn content? It is basically free, since they already have the infrasructure.

Because the payment processing is unreliable and prohibitively expensive. For all the whining about "moral pearl clutching", the reality is that adult oriented businesses deal with massively higher rates of fraud and charge-backs. Visa and Mastercard couldn't care less about the ethical issues, it's simply a risk calculation for their business.

[zbentley]

Even if that’s true (and it gets repeated as a very general statement without general data to back it up, so I’m not sure), then why couldn’t payment processors either a) charge retailers in high-risk segments a higher transaction fee, b) charge merchants penalty fees if the number of chargebacks from their transactions exceeds some threshold, or c) compete with each other to serve higher-risk markets?

The answer is, I think, monopoly environments: they contain poor incentive structures for competitive differentiation, and encourage extreme risk aversion by the monopolists. Add to that the “it’s not really about chargebacks, it’s a culture war” agenda (which isn’t just lobbying pressure on payment processors; plenty of the calls are coming from inside the house there), and the outcome of de facto censorship is likely.

[ramesh31]

>Even if that’s true (and it gets repeated as a very general statement without general data to back it up, so I’m not sure), then why couldn’t payment processors either a) charge retailers in high-risk segments a higher transaction fee, b) charge merchants penalty fees if the number of chargebacks from their transactions exceeds some threshold, or c) compete with each other to serve higher-risk markets?

They do all of the above. There are obviously an endless number of niche payment providers who serve the segments. And they are... expensive and unreliable. Not suitable to a huge business like Valve that derives the majority of their revenue from mainstream products.

[gs17]

> the reality is that adult oriented businesses deal with massively higher rates of fraud and charge-backs

This gets repeated, but it's not the real reason. If it were, Visa/MasterCard would be fine with a store like Steam offering those games as e.g. crypto-only purchases.

[GoblinSlayer]

Found an explanation: the reputational risk they're talking about is 2022 pornhub case. Most likely some saudi dude didn't like it and threatened to pull. That's why they don't talk about it: because it's literal sharia exported around the world.

[gs17]

Wouldn't surprise me, gotta follow the money.

[IcyWindows]

That's the clause in the agreement they use to justify the increase in rates, but it's unclear it's actually "risky" when it's a large company like Valve.

[ramesh31]

>That's the clause in the agreement they use to justify the increase in rates, but it's unclear it's actually "risky" when it's a large company like Valve.

The risk is not from Valve; disputes pass through to the processor. This is the same problem dating sites, gambling, etc. all deal with. Any sufficiently large adult oriented business becomes a de-facto payment processor, where their entire core business function is in managing this risk, not whatever they actually do for the end user. It's either that, or charge the exorbitant fees that come with using a niche provider who takes on that risk.

[pfisch]

Steam has been selling these games for years without ever saying there was a problem with this. So has itch.

[ramesh31]

>Steam has been selling these games for years without ever saying there was a problem with this. So has itch.

Until now, when they did.

[zbentley]

So why did this happen now as opposed to 5-10 years ago? What changed?

[mtnGoat]

Actually they don’t, visa heavily restricts those business and the amount of chargebacks they are allowed to have, other industries have much higher rates of chargeback.