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Comment by yeldarb | Hacker News Reader

Wonder if this was all a publicity stunt to put pressure on their payment processors.

If so, I think that's a good thing. This should bring attention to payment processors' ability to effectively kill any type of business they don't agree with.

I'm not sure what the solution is. Should banks be forced to behave as a common carrier? Or do we want private companies to be able to ban the public from purchasing things like pornography and firearms by stopping adults from completing legal transactions?

Let's turn the question around instead: why shouldn't banks be forced to behave as common carriers, at least when it comes to things like processing payments, providing checking accounts, and other such basic services? What good does it do to start a business, only to be told by the banking industry that you can't open a bank account for your perfectly legal business?

I'm not sure if I'd include lending in "basic services." That seems a bit more debatable to me.

I'd include lending in basic services. However it would tie it to pure risk, along with don't let a customer get into too much debt. Pure risk means you only get to look at risk from an actuarial/numbers perspective, nothing more. Too much debt I'm not quite sure how to word into proper legalise but that needs to be done before we can actually do this - maybe just better bankruptcy laws so that risk goes up too high before the customer has too much debt?

The sticking point in my mind for lending is that risk undoubtedly varies by industry. It's not really very sensible to force banks to lend money to businesses without considering what industry they're in. At that point, how do you differentiate a sensible underwriting decision from unfair discrimination?

Interest rate and documentation.

Pretend that a batch of YC startups are all getting loans rather than ownership purchases. What effective interest rate are they paying? What is the default rate where the startup dies before acquisition/profitability/IPO?

Write a heuristic to determine a fair interest rate given the current prevailing rates, financial history of the company in question, financial history of similar companies, and similar objective and quantifiable subjective factors. Document it. When someone complains, demonstrate to your regulator that your procedure was fair, reasonable, and applied evenhandedly, and to the extent possible is consistent with actual outcomes.

I'm not sure what you're getting at here. Any new batch of startups is so risky, I can't imagine a bank lending them a cent at any non-usurious interest rate until they've been in business for a few years.

Banks often do lend at better rates to companies run by executives with a good history.

Sure, but not without a personal guarantee from one or more of said executives, I would imagine. At that point, it's effectively the bank lending the money to the exec though, and not lending to the company.

That is the point. They should have numbers to show which industries get rates, and targets that a company meet (how is an open question - it might not be possible) to move to a different rate - either up or down.

There are no numbers for industries banks don't serve.

That leaves only illegal black markets where those involved avoid banks anyway because banks report activity to the local government. (illegal money laundering schemes do use banks, but there are numbers for banks to use even if they don't know about the illegal side of the business)

Once in a while there is a brand new industry, but they tend to start small enough that banks can figure out numbers before the risk is too big to worry about.

Lending and banking should be considered separate, if related business IMO. And bankers should absolutely be considered common carriers. Lenders should not.

Dutch banks terminated accounts of Corona-critics / anti-vax'ers / conspiracy nuts ( you choose how to call them ).

I wonder if climate change critics are next.

Wow, source? I'm not opposed to looking it up, but a claim like that will come across stronger if you link something

Dutch source : https://www.metronieuws.nl/in-het-nieuws/binnenland/2021/08/...

When I submitted it, I tried to find English sources, but couldn't.

Payment processors are heavily regulated by govts in the jurisdictions they operate in. They're not operating in isolation, rather they act as choke points for policy enforcement.

Possibly.

The amount of coverage this got in the financial press (particularly the FT) would seem to support this theory.

Additionally, it's interesting that the reversal happened after he named the banks in his FT interview yesterday.

Since FT article is paywalled, would you be kind to quote these names here?

I doubt it. I'd imagine one of their top priorities is relationship with models on their site. It's not like they have some crazy proprietary platform that couldn't be copied. If it came out this was a head fake it would damage that trust with models.

The CEO actually blamed banks, not payment processors. He specifically said MasterCard was not to blame, but name-dropped banks that he did blame.

I don't think payment processors would care at all because they're an oligopoly. I doubt most banks would care much either, but maybe they are afraid of losing business from large-volume merchants.

Most likely some alternative banks stepped up and told OnlyFans they'd love to work with them.

I figured it was some kind of publicity stunt from the beginning.

There is no way they didn't know this would kill the company.

Absolutely. They may indeed have had pressure from the banks, but this is a solvable problem. They're servicing pornhub. If this is just about KYC, they can roll out or use one of the myriad identity verification services.

The tweet from their official account[1] reads:

Thank you to everyone for making your voices heard.

We have secured assurances necessary to support our diverse creator community and have suspended the planned October 1 policy change.

OnlyFans stands for inclusion and we will continue to provide a home for all creators.

This seems to match your theory.

[1]: https://twitter.com/OnlyFans/status/1430499277302816773

Given that people predictably started leaving the platform, I doubt it. There isn't a social network or content discoverability aspect to the service, so hopping to somewhere else is easy. And people will remain wary of OnlyFans since they could try to restrict content again since they've already shown from the original announcement that they don't really care about supporting NSFW content creators

One effect of the proposed ban would presumably to motivate content creators to look for alternative platforms. If it was a publicity stunt it seems like it would have had a pretty big downside.

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