[Scaled]

Just FYI, the high rate of fraud is FUD. I am in the field, have a very good chargeback rate, and still cannot secure card processing at fair terms. The processors I have spoken to know chargeback rates are low, but it's a rigged system designed to extract maximal revenue by middlemen.

[NoMoreNicksLeft]

A country with sane policy would consider payment processing to be infrastructure every bit as much as bridges or airports or an electrical grid. Any country even dabbling with the idea of becoming cashless should have to consider it that.

[9x39]

>Adult chargebacks consistently exceed the 1% threshold that triggers Visa and Mastercard monitoring programs, with secondary industry reporting placing the average annual rate in the 3% to 4% range

>How is an adult chargeback ratio calculated?

Divide the number of chargebacks in a month by the total transactions in the same month. The result is the chargeback ratio. Visa and Mastercard both use this formula, with Visa weighting dispute count and dollar volume together under VAMP.

https://sensapay.com/resources/blog/adult-industry-chargebac...

It seems like that sector has 3-4X the disputes and maybe even fraud, independent of your own business practices or success.

[aeternum]

Depends on what you mean by fraud. Chargebacks are known to be high in this area just because of the spouse effect, IE "Hey, honey what is this adult-content charge on our credit card statement?" "Oh obviously must be a mistake, I'll call to have them remove it".

To get around this, some sites use less obvious or vague names, but that creates its own category of chargebacks.

[criddell]

That's like a 16 year old saying the auto insurance game is rigged because they are a very good driver but can't get cheap insurance.

Maybe your rates are high because of the risk pool you are in.

[Hackbraten]

But what kind of risk would that be? For adolescents and auto insurance, it makes sense to me (higher testosterone levels, less driving experience, not yet fully developed sense of risks/consequences, fewer spouses/children who depend on their livelihood etc. etc.)

But why would fraud be more prevalent specifically in the adult content industry than the average over all the industries? Do criminals prefer working in porn than elsewhere? Why? Or do chargebacks simply occur more often due to spouses disputing a charge in an attempt to save face in front of their partner?

[danudey]

Adult industry is digital content that can be "purchased" and then scraped before the chargeback goes through. Now the user has all the content that the site/model/whoever offers and didn't pay anything for it; they can then share it around, resell it, whatever.

It helps that a lot of people have no respect for the people producing the content; they'll happily consume it, but they refuse to acknowledge any work that goes into it or that people should be compensated for what they've created.

[ApolloFortyNine]

Wife goes "was this you?" "no, I must have been hacked".

The stats I've seen actually did put the charge back rate is high compared to other industries.

What does seem like a scam though is, especially in the digital space, a refund is basically free. The merchant could agree in the case of any charge back the credit card company can just take it back, they won't argue, just take it. They'd even agree to pay the transaction fee.

But you can't, so you get the 20% fee, and you still get the money clawed back from you.

[dhosek]

There’s going to be a lot of the spouse saving face chargebacks, people using stolen card numbers to download porn to avoid exposing their use to anyone else, active use of porn sites as a means of laundering funds from stolen card numbers—if you’re in an organization that does prostitution and card theft, you can use a third-party porn site to turn stolen card numbers into cash, etc.

[Scaled]

I have spoken to others in my field and we all have good chargeback rates.

The problem is the VIRP/BRAM requirements push adult content into using only a handful of acquiring banks, and thus there is insufficient competition to get them to lower rates since where else you gonna go?