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Comment by collegeburner | Hacker News Reader

I don't know why the scare quotes on risk. It is absolutely there in this industry. Chargeback rates are crazy from the kid who swesrs he didn't steal his mom's credit card or the husband who promises he wasn't the one buying this stuff, it must have been a hacker. This is also not entirely unfounded because some areas of this indistry are very easy to juice revenue from stolen credit cards.

There is a reason that even with those high fees to be made, most processors will not touch the industry.

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If we would just get on-board with smartcards, hey 30 years late is better than nothing, then chargebacks would be a lot harder to justify.

With the system the way it is, the card processors eat a little loss from "fraud", and then use that as a justification to exert editorial control over what industries they want to process payments for, because there's a lot of "fraud" in them. No it's not fraud, it's someone being embarrassed about their spending habits and claiming their card was stolen. If it was harder to steal cards, that would change.

Visa/MC's crusade against legitimization of sex work is a political/religious stance that has absolutely no place in what should be infrastructure. Infrastructure should be neutral.

I'm very curious to know what has influenced your priors that you would suggest moneychangers are refusing filthy profit on account of conscience.

The answer is deeper still. Remove charge backs so the credit card companies become "dumb" utilities rather than some sort of service that can provide "value add". I actually don't know why it's even a genuine thing other than it's digital so "you can". In every other realm we deal with this concept using courts, police and as plain old fraud.

Take away chargebacks and then the tables will turn. Tons of super shady sites will capture your money and run off with it.

There is a reason CC fees are so high in the porn industry and it isn’t just huge companies ripping off the little guy. The CC processor not only has to factor in the risks of client chargebacks but also the merchant themselves doing something shady (malicious or not)… say getting their DB hacked and having all the CC data in plaintext or something. Or just the merchant folds up shop and bails on the customers…. 10% rates exist for a very good reason

Why would you want to remove charge backs? If you pay for something and don't get it, have your payment instrument stolen, get tricked by a scam, etc then charge backs seem like an excellent tool to have. Charge backs are also not independent of the courts, if you trigger an illegitimate charge back then the counterparty can sue you.

No need to remove chargebacks. But there does need to be an electronic analogue to paying with cash, a utility provided by the federal government. Supposedly it is being worked on and called "FedNow".

https://frbservices.org/financial-services/fednow/

What are the odds that FedNow will service the adult industry?

Pretty good given the first ammendment and lack of other rationale such as scarcity of airwaved. A pretext to deny would be difficult for domestic companies.

The feds have been pressuring financial services companies to "de-platform" legal businesses, including those in the adult industry, for years.

The govt's pretext has been "reputational risk." Isn't it nice of the feds to tell a bank that "someone" might not think well of them if they provide services to "those" people?

It is established law that a business that acts at govt behest is a state actor, so that "pressure" is enough to bring the 1st amendment in. That is, if there's a 1st amendment argument. However, said de-plaforming doesn't seem to succumbed to a 1st amendment challenge.

Maybe such a business would win with a first amendment argument on FedNow, but how many can survive until that decision comes down?

>The feds have been pressuring financial services companies to "de-platform" legal businesses, including those in the adult industry, for years.

Source? I have never heard of this.

https://www.freespeechcoalition.com/blog/blog/2018/09/07/ban...

and https://www.wsj.com/articles/BL-252B-6265