> Question I know nothing about is besides being stigmatized, do these industries have higher fraud rates?

Very much so. Adult businesses have extremely high rates of friendly fraud, which is worsened by the facts that 1) they don't deliver a physical product, so it's difficult for the merchant to prove that a charge was legit, and 2) some customers will charge back purchases which they regret making, or which a partner disapproves of. ("No, honey, I definitely didn't sign up for that porn site, I'll call the bank right away.")

> Pretty sure credit card companies won't let you "chargeback" stripe clubs as fraud even if it wasn't you.

I'm pretty sure they will.

Sadly the porn industry shot themselves in the foot almost a decade ago trying to scam as much money out of people as possible until VISA and MasterCard stepped in themselves and banned a terrible practice from being accepted.

Remember in 2012 the whole hubbub of "pre-checked cross-sales?"

The act of hiding the checkbox below the fold of the screen and make the visitor think there's nothing more below so they won't uncheck the box that says "Yeah, charge me $1 for this 3 day trial, but also sign me up for all these other programs that will bang my card for $60-120/each"

You'd think you were getting a 3 day trial for a buck but instead you'd be getting a $300-1000 charge on your card.

> You'd think you were getting a 3 day trial for a buck but instead you'd be getting a $300-1000 charge on your card.

The same technique, though not to such an extreme degree, was used to make candidate loans in the last US election.

The people that come up with this shit are evil.......

you are not wrong, but it was not every porn site doing that, yet they are all suffering from that practice.

I think it led the porn processors like ccbill to become more diligent about agreements / checking on customers doing such things and making sure they were not hidden if employed.

Sadly it's crap like that that is cited in making it harder / more expensive for small operators to do business, yet from what I gather it's harder to unsubscribe from the NY times than it is multiple porn sites these days.

I wish the exorbitant fees they charge due to higher chargebacks like that were only charged to people who engage in such things - it sucks that people who do a fair above board business are charged extra - it's just an excuse to soak others at this point.

ok that's oddly specific.

"Stripe for vice business" wouldn't work because the payment processors are still beholden to VISA and MasterCard. This company would also have to create a whole new credit card in which majority of people are using.

You'd probably need to create a network of people that accepted physical cash and gave you crypto in return, sort of like localbitcoins.

I guess you could buy a chain of Bureau de Change outlets and have them convert cash to bitcoin, monero etc. I'm surprised this isn't already happening to be honest - they have all the infrastructure and licenses already.

I wonder how many would carry the pornocard in their wallet. Perhaps the ViceCard or even FreedomOfSpeechCard.

I doubt ApplePay would support it.

Perhaps a membership service like Costco. Probably someone has tried it, like perhaps a casino chain.

What are the odds that an OF card would be the only card someone has, though? See for example Dinner's Club.

I guess they’d probably have another card, but one has more money on it than the others?

You have to see how tenuous this is, right?

Isn't that how all payment methods get started? Apple Pay wasn't just randomly accepted, people asked and when the answer was "no," they walked out the door.

Not successfully for several hundred years, no. Bottom-up creation of payment methods isn't a thing. Please take a look at the history of the Diner's Club card, and compare it to Amex.

Apple Pay is widely accepted because of three things, ordered here from least to most important: Apple applying pressure on the processors to accept it, paying them when necessary, and the fact that giant card data breaches like Target and Home Depot meant that the whole market needed to move away from magstripe anyway. People taking grass roots action was not a part of the change in any meaningful way (at least partly because it never happened).

There's this very popular cryptocurrency story that individual people have power in this market. The problem with that narrative is that virtually nobody cares enough this issue because it's just not that important. Sorry.

Interesting! I’d always assumed it was a grassroots thing. Thanks for taking the time to teach me otherwise!

My roommate is one of the risk analysts on the fraud team for a large subprime credit card company. About 45% of credit card transactions from OnlyFans are CC fraud.

Edit: update numbers to be correct

would you please clarify the type of fraud.

for example, I think a lot of people hear this and assume the fraud is like, caused by an OF model - not delivering what was promised for example..

However seeing your statement, I am thinking it's that much fraud because criminals are getting stolen card / Id details from the darker webs and they are using other people's cards for fun things - and OF is a popular place to blow other people's money.

Maybe it's a mix of both - but I would think it's more the other way.

I remember when there were big numbers of fraud pointed at adult sites back in the day - but the core reason was so many offered $1 trials, and it was a popular way to test if a card number you got was valid / not reported stolen yet - use a cheap porn site.

I saw a (possibly npr?) story a while back saying that many criminals are now using dominoe's pizza to test if (stolen ) cards are good, because it's cheap and they get a bonus free pizza for a friend.

So it's not the pizza place or the porn site that is really encouraging the fraud or creating it.. unless you get into the weeds of they accepted a card without the exact right address and so they are a target for card testers.. that's a different discussion and such.

Yes. High value virtual content is the best way to launder money, especially if it is private content like shows.

However unless there exist payment rails outside Mastercard or Visa, no one is going to build ”Stripe.” The only way would be Stripe running on crypto, but then how people get crypto in the first place if not by a card?

EDIT: Crypto also lacks chargebacks (so called hard money).

More importantly, cryptocurrency also lacks recurring payments. Most adult sites depend upon income from ongoing subscriptions.

The Sablier protocol (https://sablier.finance/) trustlessly streams crypto/stablecoins on a second/hourly/daily/monthly basis which covers use cases such as subscriptions.

No, that doesn't address the use case for subscriptions. (In fact, I'm struggling to understand why anyone would use it in its current state.) The sender of a Sablier "stream" has to set a fixed start and end time for the stream, and deposit the entire value of the stream up front. None of this makes any sense for a subscription application, where the merchant wants the subscription to recur until cancelled, and the subscriber doesn't want to make a large payment up front.

It doesn’t necessarily lack it, but it’s set up differently via one way payment channels.

> Pretty sure credit card companies won't let you "chargeback" stripe clubs as fraud even if it wasn't you.

Of course you can. If your wallet was stolen and the perp went to the champagne room at a strip club, you would not be liable for it. The strip club knows that as well so the onus is on them to actually check that the ID matches the person and the card.

Yes, in Vegas many are checking ID for use of credit card exactly with this reason in mind. It is so common for pickpocket that otherwise they have too many such issues.

> Seems like a business opportunity for someone to build a Stripe for vice businesses.

Well, not really. The whole point is that if you do that, the government will apply soft pressure on you, until you go out of businesses.

Its an end run around of the 1st amendment, basically. A senator doesn't have to make a law, targeting you specifically. They just have to threaten your bank, that they will be punished, sometime down the line, in an unrelated law, and then the bank will, shut you down.

> Seems like a business opportunity for someone to build a Stripe for vice businesses.

It seems that was a big part of WireCard's business. Didn't turn out that well. (Though their vice business might've been one of the few parts that actually made some money...)

Absolutely higher fraud and chargeback rates.