Yeah. But, supposedly, in a free market, if there's demand for it (a payment processor that accepts porn), there would be supply. Someone would come up with a company devoted to just that.
The problem isn't that you need an alternative to PayPal, you need an alternative to Visa and MasterCard.
That's a lot harder because they have more of a network effect. People have a Visa or MasterCard because it's widely accepted and it's widely accepted because a lot of people have one.
The solution to this is to make it easier for people to get or accept the alternative payment network. Only now you're into regulatory barriers.
The critical feature of PornCard is that you don't have to give your name, right? Except that they're specifically prohibited from offering that.
The regulatory cost of establishing a new card is effectively the same whether you have a hundred users or a billion, so high regulatory costs put a disproportionate disadvantage on small and upstart networks, which would then have to charge higher fees, which would then cause no one to accept them.
The regulations destroy competition and without competition you don't have a free market.
Thank you! It’s incredible that I had to wade through so many comments discussing this news without getting to the heart of it. Network effects breed centralization via a lack of competition. Companies whose products or services have network effects can abuse that power in many ways, including discriminating against customers or content, as Visa/MasterCard/PayPal/Stripe regularly do. This compels everyone to have to act the way these companies dictate, which is a huge problem for any free society.
I agree with you that some regulations are harmful and are just plain old regulatory capture (https://en.wikipedia.org/wiki/Regulatory_capture) that protects the big incumbents. But we need well-targeted regulation for this situation where the size of existing networks prevents new payment processors from participating and having a shot in the economy. one option is that once you’re above a certain size, providers benefiting from network effects must be treated like a government entity, just like we regulate utilities. After all, services like payment processing are incredibly fundamental to our society’s operation. Another option is to force interoperability so that a new small business doesn’t face an insurmountable barrier to competition.
It’s a Monopoly. Or in this case of Visa/MasterCard, a duopoly. There are laws to break up monopolies/duopolies. In the case of an oligarchy, there are laws to break up anticompetitive behavior and collusions.
If only there was a Standardized Electronic Payments API supported by all banks, perhaps with interoperable bank account numbers. Then you could just send money to any account without the need for credit card providers.
I wonder if FedNow would help, whenever that is supposedly supposed to show up. Then there wouldn't necessarily be a need for intermediary payment networks in the first place.
I hope these have two different accounts and you can only -push- payments with a unique transaction idea. I hate the current system of the input and output account having the same number for banks.
It's far too fractured, speculative and volatile to be any sort of competition. It was probably started with those intentions and stable coins are trying to do that but the major coins are all pretty useless at this point for proper transactions. No large site wants to touch crypto as a viable payment method. Plus the reputation of being used for drugs and blackmail is hampering Bitcoin
This is a common misconception (I blame American politics). In _perfect competition_ this would hold true; however a _free_ market is not guaranteed to be competitive, much less close to _perfect_ competition.
It's not just competition, in credit card space, you basically have a duopoly with Visa and Mastercard.
If we were talking about bars, then yes, you have thousands of bars, and if legal, it wouldnt be hard to find a naked bar. But with two companies, you're far away from free-anything.
Absolutely that's why we have to have regulations. The larger companies get the more they tend toward being monopolies and warping the idea of free markets.
Where this always falls short is when there is not enough demand make it possible to run a business on said demand.
This is usually startups biggest problem - there exists demand, but not enough demand in the right mix to be able to make a living/business/millions/etc... filling it.
