Wow, you spend years thinking crypto is convoluted nonsense…and then something comes along that impacts a lot of your friends, and you start to change your mind.
I have a fair number† of friends and acquaintances who have OnlyFans. Some for side income, some for a substantial portion of their livelihood. And to see that get taken away because the payment processors want them to fall in line…I guess I’m on the crypto train now.
A number of my friends and loved ones will be affected by this, and many more have been thrown under the payment processing bus before.
And forgive me if this seems ranty, but it isn’t just payment processors, it seems to permeate so much that comes out of the USA. See the various App Store rules too.
And this isn’t about fraud rates. Because why are the fraud rates high? It’s because the sex whole industry is pushed to the fringes, and loaded with shame. “Oh that payment wasn’t me, my card must have been stolen”.
I feel pretty angry how much this puritanical nature in a foreign country affects the people I care about around me.
If you can let China censor your platforms, you can let Europeans have porn.
You is American culture.
If you’re American, it’s YOUR country, the one who pretended to export democracy, and instead is only able to export its own puritanical and backward values on what they pretend to be a free global market.
So yes, YOU.
I worked at a webcam pornography company (as a software engineer) a few years ago and honestly, I get it from the processors perspective. I wasn't privy to all the conversations, but I know at the time, some higher ups were toying around with the idea of basically building an entire in house payment processor to handle transactions.
I think a lot of people think the processors are doing this out of some moral high ground to try and kill off the pornography business, but that's not what's happening. It's all about risk and opportunity cost. I forget the exact numbers, but pornography and gambling are near the top of the list when you look at industries with the highest number of fraudulent transactions. When someone reports a transaction as fraudulent, the money to refund the customer comes out someone behind the scenes pocket and often that money gets tied up in limbo while everyone points fingers at everyone else. Dealing with fraudulent transactions is a massive headache that wastes a ton of time.
Most major processors just don't want to deal with the hassle and the ones who do charge extremely high fees to offset the extra risk. OF has probably been using a processor that doesn't allow for pornography this whole time, but the processor has been letting it slide. My guess would be the risk has finally grown too large and the processor is cracking down. Like I said, there are other processors out there who are happy to work with the porn industry for a much higher fee, but it seems like OF has decided for one reason or another that that isn't as lucrative as just banning explicit content all together.
The dispute rate is certainly true for companies under the general umbrella of “subscription services”, usually meaning porn / webcam sites, and there are trigger points where the payment processor will switch off a facility that exceeds a certain dispute volume.
OF has been increasingly making use of step-up authentication to avoid disputes, which is the way the non-US payments industry is heading. My guess would be that if disputes are in fact the reason, it’ll be because the step-up authentication isn’t available or working for some significant slice of the market.
That said, I don’t think that’s the reason. Switching off porn altogether means the vast majority(citation needed) of OF’s content will be gone, which means this has to be a life-or-death move. MC has been placing legality/consent/age restrictions on adult content, including real-time monitoring of content / chat [0]. My guess is that this is onerous enough that it breaks OF’s business model.
Oh, that article you linked is interesting, especially since it says it takes effect Oct 15 and OF's changes take place Oct 1st.
I think at the company I worked at most of what is in there around record keeping wouldn't have been a problem because there were laws that required the company to do that already.
The "pre-screening requirement" could be problematic though.
> All uploaded content must be reviewed prior to publication to ensure that it is not illegal and does not otherwise violate Mastercard’s standards
That one seems crazy. I have no idea how much content they get uploaded daily, but I would guess it's a massive amount. If they needed a human to view 100% of the uploaded content before it's allowed to be published... I just don't see how they could do that profitably.
I don’t think review per se would be such a problem: just charge a per-upload review fee. That might weed out some of the creators who are not yet making any money and can’t/won’t invest in the effort, but is that really a bad thing for the platform?
I think the hard part is the hand-wavy stuff you’re supposed to be looking for. How are you supposed to know whether some unusual sexual act violates their standards? Or whether gay porn is legal in all applicable jurisdictions for instance?
The person uploading may or may not be in the video, or the other participants could be under age. Figuring out the age of people in a video is lot harder.
Also stripe identity really works for US users the most , with a global audience like OnlyFans that could be limiting as well
Hmmm I guess you could use it and have snail mail as a backup...It'd be better than nothing probably?
Yea I'm not sure how you validate everyone in the video has a verified identity and age... Perhaps machine learning could automate some of this. Stripe has selfie validation... so if you could do something like that on the video where faces in the video are compared to the identities provided... If there isn't a match then the video is flagged for review.
I have seen several times stories on HN about the problems porn sites has with processors, but I never heard that gambling sites had the same issues. It would be interesting to hear more about that.
Big Porn like onlyfans and pornhub are not being targetted by cc companies because of fraud rates, but because of the weird Christian fundamentalist lobby in America.
> Mastercard and Visa said they had prohibited the use of their cards on the adult website Pornhub, after the New York Times columnist Nicholas Kristof reported that the platform included videos of child abuse and rape
BTW it’s silly of you to try to pretend to be some sort of industry expert and then immediately admit that you have never worked with porn payment processing. Everyone knows that the fraud rates for porn are very high, that’s not new.
I don't see how working at a porn company that was white labeled by another porn company gives you detailed insight into the decision making at major credit card companies.
You're right, maybe "definitively" was over the top. I got a little excited because one of the companies he mentioned was at least partially something I had worked on.
What I am basing my statement off of is second hand knowledge from multiple people at one of the companies mentioned saying that the reason payment processors don't work with porn companies is because of fraud rates.
That's not definitive, but considering the person I was responding to gave us 0 reason to believe his statement is anything other than his opinion and his comment history shows a pattern asserting his opinion as fact. I'm going to assume he's talking out his ass and that I'm slightly more informed on this issue.
> multiple people at one of the companies mentioned saying that the reason payment processors don't work with porn companies is because of fraud rates.
This is a widely given explanation so I would entirely expect you to have heard it repeatedly in that context.
It is far less clear to what degree this explanation is accurate. Yes fraud rates are higher but they could easily be covered by charging higher processing fees (something that is often done for other risks.) There is pretty good evidence that other factors than fraud risk are at least partially responsible.
If you have an issue with people aaserting opinions as fact, maybe you should be more careful as you what you state as fact from a position of claimed authority.
If crypto was actually a viable alternative they wouldn't be doing this.
I'm not against the promises of crypto - but the tech so far has failed to deliver anything but a platform to streamline illegal activity, asset speculation bubbles and a whole bunch of wasted energy/hardware along with reliving the problems people had historically with bank fraud in free banking and the likes (banks printing their own notes without cover till you get a bank run - this is why central banks were invented ...)
The tech is there but mainstream adoption and understanding is still coming along. It's incredibly easy and cheap to send USDC or DAI to OnlyFans if they accept tokens on a sidechain (like Polygon or Fantom).
You don't have to sign up for an account or provide any personal info, just use your wallet to send certain tokens to an address, then you can use that wallet as a sign-in.
OnlyFans can then use Coinbase or an off-ramp to go from crypto to fiat.
It's a more seamless user experience and solves the payment processing issue.
In my opinion it's a matter of educating the masses to a very different method of paying for services and using services (both on the business and consumer side).
> It's incredibly easy and cheap to send USDC or DAI to OnlyFans if they accept tokens on a sidechain (like Polygon or Fantom).
I'm a pretty techy guy but in this one sentence alone you said 5 things that I have no idea about nor even heard of ("USDC", "DAI", "sidechain", "Polygon", "Fantom").
The chance of the general population catching onto this stuff anytime soon is slim.
I’m a smart contract and altcoin developer. Yes it’s confusing now but there is a path forward.
USDC and Dai are both US-dollar stable coins.
They’re always worth 1 dollar each, they’re among the most trustworthy USD stablecoins, and they are perfect for storefronts. The problem is that Ethereum transaction (tx) fees are now around $15-$25 because the network is so popular. Everyone wants to use the highway but the highway is only so big. Ethereum 2.0 is supposed to increase the size of that highway by some order of magnitude to make each transaction cost cents to send but we won’t know until it happens in few years. But we need a solution now! — and not in a few years!
That’s where other less popular but still good enough networks [side chains] like Polygon, Stellar, Binance Smart Chain, Tron, and a few others come into play.
Side chain is a term for a non-Ethereum or non-Bitcoin blockchain. Think of it like getting off a tollroad and getting onto a less trafficked, cheaper, and possibly faster side road, with the risk of coming across some new undocumented potholes.
USDC (and probably Dai too) for example, can already run on the Binance(bsc20), Ethereum(ERC20), Polygon, Tron, Stellar, and a few other networks. This can be super confusing and shocking for users because if you send your BSC20 USDC to an ERC20 USDC address you usually lose it. It’s a good thing that many of these networks have different address formats and that helps considerably to have software preventing that goof but some networks like BSC20 and ERC20 share the same address format because ERC20 is a copy of BSC20. Very user unfriendly. Alright I know I might be loosing you here but the solution is next.
Now, here’s what I think a solution to this all is: Rename one existing Stablecoin on one of those networks and let’s call it something idealistic like Freecoin. For example, DAI on the Polygon network or something else. To make it simple, it’s only one coin on one cheap network that is anything but the Ethereum network and then boom, you’ve dropped your terminology down to just “Freecoin” and “where is an easy on-ramp to buy it?” It’s important that there is only 1 kind of Freecoin. Buy them on this Shopify website, these exchanges, or this DeFi exchange. Obviously you can allow people to pay with other cryptocurrencies but you can either give a 1%-2% discount for using a certain cryptocurrency or make the UI button for your cryptocurrency larger than the buttons for the other cryptocurrencies. Both are effective nudges.
If you have a product worth buying, people will beat a path to your doorstep.
Yea, it's a lot of foreign concepts. Bit of a learning curve to it. Whether or not the incentives are great enough so that the public goes past the learning curve is going to be interesting to see.
USDT is printed out of thin air (which is why I didn't mention it). USDC is a bit better and more transparent. DAI is decentralized and backed by collateral.
There's been a lot of talks of regulating stablecoins to ensure backing, which I don't think is a terrible idea.
Telling him to google, then providing exactly one link to the company that created USDC isn't really much of a refute. Maybe a link to an independent audit (as far as I can tell there are none).
Much like tether, there is no proof that they have anywhere near the currency they claim and folks that operate in that market are the ones shouting the loudest about the apparent fraud occurring. I've yet to see tether or usdc provide proof otherwise, it always seems to be a "we wouldn't be this big if we didn't have what we say we have" - bernie madoff style. And to get in front of it, an attestation != audit.
> It's incredibly easy and cheap to send USDC or DAI to OnlyFans if they accept tokens on a sidechain (like Polygon or Fantom).
And then you quickly realize how useless USDC/DAI is when you want to pay your rent, for milk, etc.
> OnlyFans can then use Coinbase or an off-ramp to go from crypto to fiat.
They can't because then KYC kicks in. This is exactly the problem with crypto at scale...you can't convert large scale amounts of crypto to fiat without someone noticing. Silkroad "worked" because there was no central authority taking money, just lots of a smaller drug dealers. Pablo Escobar wouldn't have been able to run his whole operation on crypto without getting seen.
>> OnlyFans can then use Coinbase or an off-ramp to go from crypto to fiat.
> They can't because then KYC kicks in. This is exactly the problem with crypto at scale.
Isn't KYC only a problem for people trying to hide their income? Onlyfans (and other legit businesses) would not have this problem as they would not be trying to hide their earnings.
KYC/AML isn't just for hiding income, it's about understanding the threshold for which someone wants to do business with an individual or company. For the same reason CC companies don't want to take on potentially illegal activity, no crypto exchange is going to take on the risk of business conducting $B's of dollars worth of crypto as its means to doing business.
This is essentially how Coinbase is allowed to operate - it doesn't have whales on its platform, just millions of KYC'd minnows who are individually low risk.
It is more chargeback and fradulent transactions processors are concerned with it. Those cost immediate money to them . Blockchain and altcoins solve that (for payment processing consumer, protection is lesser of course)
Illegal activities are only a problem if law enforcement makes it their problem, I don't think there is a case where law enforcement went after the payment provider for facilitating transactions for illegal activities, it is website/marketplace responsibility usually
> Blockchain and altcoins solve that (for payment processing consumer, protection is lesser of course)
> Illegal activities are only a problem if law enforcement makes it their problem
And now this is where AML kicks in. Now you're dealing with banks and not credit card processors as the source of the issue. No US bank is going to work with a company who is converting money from crypto to fiat at the level of billions of dollars.
Ren of billions if not lot more has already moved from USD into crypto coins. Banks have had very little say in it, and also no control how money is being used once USD is converted to crypto.
Exchanges are doing pretty well to convert USD to say BitCount, despite Bitcoin's unsavory reputation for illicit/ illegal transaction like ransomware payments that actually happen on the coin. Even single transactions in the millions barely register these days.
I am not sure porn as an industry earns in billions and even if it did the market is today large enough that it won't be sticking out all that much.
So, here is the core problem: if you want to do this on mobile... how? You can't do the actual payment parts securely using just a web browser--if you think about it that kind of undermines the whole concept for a lot of people: you would need to host that website somewhere--and then crypto wallets that support dapps and payment processing tend to get banned by Apple, because they provide a way to bypass their cut for services using an app (even if that app is just a browser) :/.
Honest question, I tried to ask it below: the optics issues of being associated with illegal activity, being a waste of energy and hardware during a chip shortage, as well as the actual reality that most people in crypto are speculators at this point, these seem like issues that crypto advocates can actually recognize and address so crypto can achieve wider adoption. It unfortunately feels like crypto enthusiasts just dismiss these concerns and think they don't matter, which just maintains the status quo with respect to its adoption.
The properties of certain cryptocurrencies that make them good for illegal transactions also make them good for pornography and other "not illegal but touchy" areas.
Not really - these are high volume low value transactions and need to be low friction. Money laundering and similar illegal transactions are fine with the opposite.
The cryptocurrencies I consider viable for this kind of thing (mostly Monero) are actually better for low-value transactions than conventional card payments, since they have a low, fixed transaction cost (well under 0.1USD, try that with VISA/MasterCard). I'm not sure about scaling volume, but the current situation looks promising.
Friction is a problem, but I don't see why sending Monero has to be any harder than with conventional payment methods. The hard part is overcoming the network effect of payment cards.
The "only people doing illegal stuff use it" point doesn't really hold up when you consider how much energy is going into keeping legal uses less convenient than centralized finance. It's like saying only robbers wear masks, and then we have a pandemic and suddenly everyone does. With the right economic incentives, defi is a tool waiting for the right moment to shine. This could be such a moment.
> If crypto was actually a viable alternative they wouldn't be doing this.
Adoption is a thing and takes time. Crypto itself is also a technology still in its infancy with at least a decade+ of engineering remaining to begin to resemble something that everyday people can use, but it's already quite promising.
There are many cryptos that would be perfectly viable for payments here. XLM, USDC, Polygon for example. I think the investors told them that it’s too niche and they’d rather have credit card payments for whatever remains after the policy change.
All of these are literally senseless for buying porn. Are you seriously telling me you want your family and friends to know when you buy something from OF?
Monero is really the only thing that makes sense here.
"This is all garbage" followed by "Oh, it happened to me or my loved ones and now it's not garbage" is such a classic pattern across so many controversial topics.
I wonder how we can be more open minded as a society while still keeping enough skepticism to not accept literal garbage.
Pick any "we should oppress this thing that other people want/like/are" and there are people who miraculously realize that actually, there's a reason people want/like/are that thing once it happens to them.
I think it starts from some combination of factors like fear of the unknown, superiority complexes, downright stupidity, etc., which are only un-blinded when it smacks you in the face.
It works I’m reverse as well. The owner of a socialist magazine just recently fired most of his staff for trying to unionize. He wrote a bunch of articles purporting to support all these ideals but the moment those ideals threatened his power he shut it down.
The fact that OnlyFans isn't even trying to move to crypto to keep their business alive is a stunning indictment of the state of crypto as a viable payment method.
Couldn't the explanation be as simple as them lacking imagination? They're not a Silicon Valley funded startup. My impression is they lucked into the golden goose, and this move makes me think they're downright clueless about their options when things get adversarial.
I guess that's possible, but it's hard for me to imagine that with billions of dollars at stake they didn't even consider it. I think they made the calculation that forcing their customers and creators to use crypto would lose them even more business than banning their core product.
I just can't fathom such a risk-averse decision. I mean, their business is dead. Even if you're not normally the type of leader to bet the farm on a wild shot, certainly it's the rational choice when the other option is a guaranteed 90% loss in expected valuation.
What are those last 10% worth to you? Unless it's still the difference between personal financial independence and wage slavery for the majority owner, I can't see how that's the rational choice. That's why I'm concluding lack of imagination and borderline incompetency.
Why do we somehow assume that OnlyFans - a company that basically stumbled into success with zero innovation or business prowess - is even capable of adopting crypto in such way?
Of all companies that could adopt mass crypto this one would be somewhere at the bottom of the list imho.
It's really just an indictment of OnlyFans lacking any imagination, or, well, balls. They are going to crash and burn anyways - they could have at least tried something like this. Instead they will just pathetically fizzle out, desperately clutching to the few pennies they will have left after this, unwilling to take a risk that might reap great reward and actual change.
There simply aren't enough consumers with crypto to spend yet.
The percentage of consumers with crypto is maybe 1%. The percentage with credit cards is maybe 90%. If OnlyFans moves to crypto, they cut their addressable market by 98%.
It also puts crypto in an interesting new light: circumventing sovereign governments and regulations was always a fool's errand in my opinion. But circumventing private payment providers that have decided to do extralegal morality-policing... that's a much more realistic and interesting thing to aim for.
> circumventing sovereign governments and regulations was always a fool's errand in my opinion.
For big companies that have to respect laws anyway, yes, but it still brings lots of opportunities for regular people and small organizations that can fly under the government's radar.
To make a minor nitpick, Bitcoin was created in response to the GFC bailouts, which was essentially forced government action as a result of private banking greed, fraud, and / or incompetence.
The circumvention you mention is incidental, not primary. "Something better" was the, admittedly lofty, goal. And if not purely "something better" then at least "an alternative".
>And to see that get taken away because the payment processors
There was a story about an online dildo seller who couldn't sell specific colour of dildos because American Express didn't like them. I think it was lovehoney
I’m sure there’s got to be other full-time UI designers/part-time circuit queens out there. Can’t be that weird.
But yes, these are consenting adults (a fair number of them quite highly educated and absolutely aware of what they are doing) selling solo videos or videos with other consenting adults. It’s legal, it’s a huge business, and it’s dumb to push it further to the fringes.
So i don't necessarily like OnlyFans and I think it's a dangerous game to play for contributors. That said, why are payment processors deciding which businesses get to exist? I understand that the fraud rate is higher than normal, but how high is it? Could it not be handled by a higher than normal transaction fee?
It bothers me that they have the power to shut businesses based on what appears to be their own subjective moral code. If a website is shutdown for any reason it should be due them breaking some law, not the payment processors feelings.
Regulation should passed to stop this from happening. While a lot of people may agree with their actions so far, it shouldn't be their decision to do this.
…well I am not going to go through and do a full audit, but a fair bit is explicit, and realistically people are paying for the videos and not the stills.
You are blaming the wrong party! Your friends shouldn't rely on income from one customer who holds all the cards (did your friends negotiate a contract with OF with the help of a lawyer?). Lesson learned for them. They can now run their own sites and do marketing etc. themselves and learn how to run a business.
Yet more skills they have to have... also, I presume OnlyFans helps with the pipeline. (Much more likely to be comfortable clicking on an onlyfans link than a link to an unknown website)
Yeah but it’s almost a trope of the 4 hour week beach laptop business decimated by the big tech company, be it SEO changes, AdWords changes, being banned from Twitter, relying on a Facebook page, yadda yadda.
They are in business and need to adapt. If they can’t hack it take my route: employment in a demand industry.
There is zero reason to come up with an alt/shit coin for this. Accept payments using a popular crypto-currency and link your customers to reputable exchanges they can purchase the currency at.
FWIW, most of these were low-effort projects with silly names which were either jokes or pump-and-dump schemes. As far as I'm aware, none of them have made any meaningful inroads into the adult content industry.
Wow, this is really bad for crypto. Even though they can circumvent VISA technically with coins, OnlyFans doesn't want to go down that path. Probably because it immediately becomes partially funded by money laundering or sex trafficking, and they get shutdown eventually
there are already a few competitors, and afaik pornhub cleaned up its content in order to follow that model. If they are registered to hands-off countries they ll probably steal OF's thunder overnight.
Serious Question: Do they all use it for adult content? I've never used OF but see the porn/adult references all the time so I assumed that is all it was (obviously not it seems?)
I am sure someone is going to come up with silly edge case examples, but OnlyFans is for porn, and anyone else who says otherwise is trying to spin you.
Exploiting this, you get Cunningham's Law: "the best way to get the right answer on the internet is not to ask a question; it's to post the wrong answer."
Better: any made up story may become true eventually.
I've experienced this first hand. I was a compulsive liar in primary school and one time I told my friends that I saw a webcomic that had this gimmick that every panel ended with the phrase <insert topic> is EVIL(BAD) ("Złe/zły/zła" in Polish).
I have a fair number† of friends and acquaintances who have OnlyFans. Some for side income, some for a substantial portion of their livelihood. And to see that get taken away because the payment processors want them to fall in line…I guess I’m on the crypto train now.
†Yes, I have a slightly strange life, I know.