Hacker News Reader

Comment by dhosek | Hacker News Reader

Some years ago I interviewed with a company that served as a payment risk processor for high-risk businesses (in short, porn).

The chargeback rate on online porn is huge. As a result, where a traditional payment processor may be 1.3–3.5% depending on the business and the assessed risk, for a high-risk business, the rate can be much much higher. While Onlyfans keeps 20%, I'm guessing that they'd be badly hurt if they had to give half that to their payment processor. I'm sure they've looked at their numbers and they find the non-porn providers are more profitable to them, especially if it means they can lower their processing fees. Booting the porn providers will likely also make it easier to recruit more non-porn providers.

View on HN

Another thing that feels uniquely-US to me is chargebacks. I don't even know what's the process for initiating one in Russia. I once wanted to do that (forgot to disable auto-payment for internet in the apartment I rented and since moved from), called my bank, they told me that there's nothing they could do and I have to talk to the merchant to get a refund.

But many comments here imply that chargeback is almost as easy as clicking a button or asking nicely. How's that?

You hop on the phone with the bank and initiate a dispute. They give the merchant a chance to prove that you specifically did indeed make the purchase and/or receive a hard product. If they can't, the money is refunded to your account.

Of course, if you keep on charging back, eventually your bank will give you a polite call to let you know that they're closing out your account. This provides the incentive to be relatively honest about charge backs in addition to the fact that a false charge back is a criminal offense (fraud).

The overall theme here is difference between bank, and visa/Mastercard.

If I have a legitimate charge on my debit/chequing account, I too don't know how to reverse it directly through bank.

But if I pay with visa or Mastercard (actual credit cards), I call the toll free number or go to website and start process and go through it.

Partially it's that highbibterest rates pay for policies and systems and options and insurance. Partially that credit card fraud is common so systems must be easy for consumer. E.g. I had my credit card used by somebody else probably 5 to 6 times over 15 years. They'd call me when they detect fraud,we'd go through list of transactions, and based on quick word over phone they'd cancel all transactions that weren't mine. It's a very different process than banking.

Debit cards have some of the same protections as credit cards. You can dispute a debit charge.

The US has specific legal rights to a chargeback.

https://en.wikipedia.org/wiki/Truth_in_Lending_Act

"I forgot to disable automatic billing" probably wouldn't be a valid chargeback, though.

In the US, you can't click a button to make a chargeback happen. People are eliding some of the steps or being a bit sloppy with the terminology. A chargeback is something that the bank (or rather, the credit card issuer) does to merchants.

You can log in to your credit card account, click on a transaction, and open a dispute. You have to choose a reason for the dispute. The reason has to be something like, "I was charged for a product, but never received the product."

This just starts the process. The end result may be a chargeback to the merchant.

>But many comments here imply that chargeback is almost as easy as clicking a button or asking nicely. How's that?

I can log into my banks website and, selecting any payment transaction within the chargeback period, initiate a chargeback claim by just clicking a few buttons.

Yeah I kept reading about chargebacks in USA so I tried to initiate one on a Visa card in New Zealand and it was a 6-week arduous process requiring a shitload of documentation. It didn't seem worth it for my purposes.

It makes it easy to comply with the Fair Credit Billing Act:

https://en.wikipedia.org/wiki/Fair_Credit_Billing_Act

> I'm sure they've looked at their numbers and they find the non-porn providers are more profitable to them, especially if it means they can lower their processing fees.

I highly doubt this. There’s like no way a site that’s known for porn makes more money on what Patreon does. 99.999% impossible.

> Booting the porn providers will likely also make it easier to recruit more non-porn providers.

Pornhub can allow regular content but nobody is going to ditch YouTube, especially PG content creators, because of the name association.

Unsure as to whether booting porn will enable any other recruitment of more other providers. OF is synonymous with young girls (over 18 but still young) selling nude picture for everybody under certain age. That is what everybody is thinking when it is mentioned. If you tell somebody under 30 you have OF subscription and bookmarked site yes, but only for watching gardening video, people will think you are joking.

>While Onlyfans keeps 20%,

Where's the rage against a 3rd party platform ripping off the users?

Onlyfans isn't a duopoly, unlike iOS/Android.

So, your logic is that because only 2 companies do it, that's a bad thing. Yet when every other company providing a service takes a percentage that makes it okay?

Naw, I think this site has lots of people personally having to pay that 30% cut, but when other people have to pay it they don't care because it's other people.

Reply on news.ycombinator.com