Comment by gspencley | Hacker News Reader

Comment by gspencley | Hacker News Reader

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I don't think he was trying to imply that he did anything wrong. He was admitting the ignorance regarding how banks and banking work... plus acknowledging that a lot of readers will have had experiences that would make them think "Oh you young fool."

In 2022 I lost my business banking and had to shut down a business that I owned for 20 years because it was related to the adult entertainment industry and, despite being completely legal and aboveboard, a single wire transfer that got a little bit of scrutiny resulted in them asking questions about what we did and, knowing that I was doing absolutely nothing wrong, I answered all of their questions truthfully and completely. A few months later I was told that we "fell outside of their risk appetite", our accounts were being closed... and for two months we searched for any bank or credit union in Canada but none would take us.

A lot of industry insiders had that exact reaction: "Are you stupid? Did you not know?! You NEVER admit that you're in this industry you moron!" etc. We even had a very sympathetic branch manager suggest that we re-incorporate, re-brand and hide what we do (a front, in other words). I couldn't do that. And I mean, we had no issues for 20 years. 10 of which were banking as a corporation (was personal accounts before that since we ran it as a proprietorship) and I thought that being in Canada we were pretty progressive. No one I told on a personal or professional level had ever cared. So why would the banks? We were lawful so why should they care?

> You NEVER admit that you're in this industry you moron!

This can bite you, though unlikely. Look at Fed Lisa Cook. Probably at some point she thought it'd be okay and she's good for the money and it's just a bureaucracy to bypass. It's a very small thing if you compare to ... uhm ... what Trump did. But it's biting hard now.

Chargebacks. Tons of people buy porn on a card then later deny it when their SO finds the bill.

The industry is rife with this kind of fraud, and chargebacks represent tangible risk of financial loss, so banks just blanket ban working with certain industries.

People who sell precious metal jewelry for credit card payments are another.

That's why adult industry merchants are a thing, like CCBill. They have been around for decades and its kind of a non-issue. Can still accept Visa, MC, AMEX, etc.

source: used to run porn websites back in the early 00s.

How does something like CCBill stay in business when the card networks themselves have strict guidelines on chargeback rates that'll get you booted from the network?

Presumably, such merchants are basically outsourcing their chargeback resolutions to CCBill, who I assume is quite good at fighting them via proof of purchase.

They charge 10% (or at least they did ~10 years ago, probably higher now) and require you maintain a 30% reserve and then they use that money to continue to lobby Visa/MC to prevent competition.

If this was the main reason they would just charge more to process the payments or add a longer hold period.

Honestly GP just sounds like wrong founder market fit. GP has a moral spine and was operating in a market where you must forgo it.

Nothing to do with charge-backs as our bank was not providing payment processing for us. We ran a "free site" that made its income from referring subscription sign-ups to paid sites through their affiliate programs. We sold nothing direct to consumer. Our customer was other adult websites.

The banking services they terminated consisted of a single business checking account, business savings account and company credit card. That was it. That was what they deemed "too risky."

We learned from someone who used to work at Chase's compliance department that most big banks just have a flat-out ban on working with any customers that are involved in the industry in any capacity what-so-ever due to concerns over serious things like human trafficking. It was the fact that we were distributing [lawful and traceable to the producer] content that made them not want us as a client.

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