4 ms·

Wonder if this was all a publicity stunt to put pressure on their payment processors.

disgruntledphd2 5y ago
Possibly. The amount of coverage this got in the financial press (particularly the FT) would seem to support this theory. Additionally, it's interesting that the reversal happened after he named the banks in his FT interview yesterday.
- tandr 5y ago
  Since FT article is paywalled, would you be kind to quote these names here?
LeftHandPath 5y ago
If so, I think that's a good thing. This should bring attention to payment processors' ability to effectively kill any type of business they don't agree with. I'm not sure what the solution is. Should banks be forced to behave as a common carrier? Or do we want private companies to be able to ban the public from purchasing things like pornography and firearms by stopping adults from completing legal transactions?
- actually_a_dog 5y ago
  Let's turn the question around instead: why shouldn't banks be forced to behave as common carriers, at least when it comes to things like processing payments, providing checking accounts, and other such basic services? What good does it do to start a business, only to be told by the banking industry that you can't open a bank account for your perfectly legal business? I'm not sure if I'd include lending in "basic services." That seems a bit more debatable to me.
  - bluGill 5y ago
    I'd include lending in basic services. However it would tie it to pure risk, along with don't let a customer get into too much debt. Pure risk means you only get to look at risk from an actuarial/numbers perspective, nothing more. Too much debt I'm not quite sure how to word into proper legalise but that needs to be done before we can actually do this - maybe just better bankruptcy laws so that risk goes up too high before the customer has too much debt?
    - actually_a_dog 5y ago
      The sticking point in my mind for lending is that risk undoubtedly varies by industry. It's not really very sensible to force banks to lend money to businesses without considering what industry they're in. At that point, how do you differentiate a sensible underwriting decision from unfair discrimination?
      - dsr_ 5y ago
        Interest rate and documentation. Pretend that a batch of YC startups are all getting loans rather than ownership purchases. What effective interest rate are they paying? What is the default rate where the startup dies before acquisition/profitability/IPO? Write a heuristic to determine a fair interest rate given the current prevailing rates, financial history of the company in question, financial history of similar companies, and similar objective and quantifiable subjective factors. Document it. When someone complains, demonstrate to your regulator that your procedure was fair, reasonable, and applied evenhandedly, and to the extent possible is consistent with actual outcomes.
        actually_a_dog 5y ago
        I'm not sure what you're getting at here. Any new batch of startups is so risky, I can't imagine a bank lending them a cent at any non-usurious interest rate until they've been in business for a few years.
        bluGill 5y ago
  - amarant 5y ago
    Lending and banking should be considered separate, if related business IMO. And bankers should absolutely be considered common carriers. Lenders should not.
- the-dude 5y ago
  Dutch banks terminated accounts of Corona-critics / anti-vax'ers / conspiracy nuts ( you choose how to call them ). I wonder if climate change critics are next.
  - sethammons 5y ago
    Wow, source? I'm not opposed to looking it up, but a claim like that will come across stronger if you link something
    - the-dude 5y ago
      Dutch source : https://www.metronieuws.nl/in-het-nieuws/binnenland/2021/08/banken-blokkeren-rekeningen-antivax-viruswaarheid/ https://www.metronieuws.nl/in-het-nieuws/binnenland/2021/08/... When I submitted it, I tried to find English sources, but couldn't.
- glitchc 5y ago
  Payment processors are heavily regulated by govts in the jurisdictions they operate in. They're not operating in isolation, rather they act as choke points for policy enforcement.
- ikerdanzel 5y ago
  American companies can only understand lawsuit. Microsoft, Google, Apple as examples in the pasts have been sued to behave. Banks are predominantly protected from lawsuits. Allows class action lawsuits and send ceos to death sentences like what commonly happen in China, problems will auto resolve. Bankers in America rarely get jail sentences. Even Madoff managed to get off several times while a black guy peddling something legit will get shot first and as question later.
alphabetting 5y ago
I doubt it. I'd imagine one of their top priorities is relationship with models on their site. It's not like they have some crazy proprietary platform that couldn't be copied. If it came out this was a head fake it would damage that trust with models.
smt88 5y ago
The CEO actually blamed banks, not payment processors. He specifically said MasterCard was not to blame, but name-dropped banks that he did blame. I don't think payment processors would care at all because they're an oligopoly. I doubt most banks would care much either, but maybe they are afraid of losing business from large-volume merchants. Most likely some alternative banks stepped up and told OnlyFans they'd love to work with them.
kilroy123 5y ago
I figured it was some kind of publicity stunt from the beginning. There is no way they didn't know this would kill the company.
- ibejoeb 5y ago
  Absolutely. They may indeed have had pressure from the banks, but this is a solvable problem. They're servicing pornhub. If this is just about KYC, they can roll out or use one of the myriad identity verification services.
EE84M3i 5y ago
The tweet from their official account[1] reads: Thank you to everyone for making your voices heard. We have secured assurances necessary to support our diverse creator community and have suspended the planned October 1 policy change. OnlyFans stands for inclusion and we will continue to provide a home for all creators. This seems to match your theory. [1]: https://twitter.com/OnlyFans/status/1430499277302816773 https://twitter.com/OnlyFans/status/1430499277302816773
ziml77 5y ago
Given that people predictably started leaving the platform, I doubt it. There isn't a social network or content discoverability aspect to the service, so hopping to somewhere else is easy. And people will remain wary of OnlyFans since they could try to restrict content again since they've already shown from the original announcement that they don't really care about supporting NSFW content creators
onion2k 5y ago
One effect of the proposed ban would presumably to motivate content creators to look for alternative platforms. If it was a publicity stunt it seems like it would have had a pretty big downside.

Possibly. The amount of coverage this got in the financial press (particularly the FT) would seem to support this theory. Additionally, it's interesting that the reversal happened after he named the banks in his FT interview yesterday.

tandr 5y ago
Since FT article is paywalled, would you be kind to quote these names here?

LeftHandPath 5y ago

If so, I think that's a good thing. This should bring attention to payment processors' ability to effectively kill any type of business they don't agree with. I'm not sure what the solution is. Should banks be forced to behave as a common carrier? Or do we want private companies to be able to ban the public from purchasing things like pornography and firearms by stopping adults from completing legal transactions?

actually_a_dog 5y ago
Let's turn the question around instead: why shouldn't banks be forced to behave as common carriers, at least when it comes to things like processing payments, providing checking accounts, and other such basic services? What good does it do to start a business, only to be told by the banking industry that you can't open a bank account for your perfectly legal business? I'm not sure if I'd include lending in "basic services." That seems a bit more debatable to me.
- bluGill 5y ago
  I'd include lending in basic services. However it would tie it to pure risk, along with don't let a customer get into too much debt. Pure risk means you only get to look at risk from an actuarial/numbers perspective, nothing more. Too much debt I'm not quite sure how to word into proper legalise but that needs to be done before we can actually do this - maybe just better bankruptcy laws so that risk goes up too high before the customer has too much debt?
  - actually_a_dog 5y ago
    The sticking point in my mind for lending is that risk undoubtedly varies by industry. It's not really very sensible to force banks to lend money to businesses without considering what industry they're in. At that point, how do you differentiate a sensible underwriting decision from unfair discrimination?
    - dsr_ 5y ago
      Interest rate and documentation. Pretend that a batch of YC startups are all getting loans rather than ownership purchases. What effective interest rate are they paying? What is the default rate where the startup dies before acquisition/profitability/IPO? Write a heuristic to determine a fair interest rate given the current prevailing rates, financial history of the company in question, financial history of similar companies, and similar objective and quantifiable subjective factors. Document it. When someone complains, demonstrate to your regulator that your procedure was fair, reasonable, and applied evenhandedly, and to the extent possible is consistent with actual outcomes.
      - actually_a_dog 5y ago
        I'm not sure what you're getting at here. Any new batch of startups is so risky, I can't imagine a bank lending them a cent at any non-usurious interest rate until they've been in business for a few years.
        bluGill 5y ago
- amarant 5y ago
  Lending and banking should be considered separate, if related business IMO. And bankers should absolutely be considered common carriers. Lenders should not.
the-dude 5y ago
Dutch banks terminated accounts of Corona-critics / anti-vax'ers / conspiracy nuts ( you choose how to call them ). I wonder if climate change critics are next.
- sethammons 5y ago
  Wow, source? I'm not opposed to looking it up, but a claim like that will come across stronger if you link something
  - the-dude 5y ago
    Dutch source : https://www.metronieuws.nl/in-het-nieuws/binnenland/2021/08/banken-blokkeren-rekeningen-antivax-viruswaarheid/ https://www.metronieuws.nl/in-het-nieuws/binnenland/2021/08/... When I submitted it, I tried to find English sources, but couldn't.
glitchc 5y ago
Payment processors are heavily regulated by govts in the jurisdictions they operate in. They're not operating in isolation, rather they act as choke points for policy enforcement.
ikerdanzel 5y ago
American companies can only understand lawsuit. Microsoft, Google, Apple as examples in the pasts have been sued to behave. Banks are predominantly protected from lawsuits. Allows class action lawsuits and send ceos to death sentences like what commonly happen in China, problems will auto resolve. Bankers in America rarely get jail sentences. Even Madoff managed to get off several times while a black guy peddling something legit will get shot first and as question later.

alphabetting 5y ago

I doubt it. I'd imagine one of their top priorities is relationship with models on their site. It's not like they have some crazy proprietary platform that couldn't be copied. If it came out this was a head fake it would damage that trust with models.

smt88 5y ago

The CEO actually blamed banks, not payment processors. He specifically said MasterCard was not to blame, but name-dropped banks that he did blame. I don't think payment processors would care at all because they're an oligopoly. I doubt most banks would care much either, but maybe they are afraid of losing business from large-volume merchants. Most likely some alternative banks stepped up and told OnlyFans they'd love to work with them.

kilroy123 5y ago

I figured it was some kind of publicity stunt from the beginning. There is no way they didn't know this would kill the company.

ibejoeb 5y ago
Absolutely. They may indeed have had pressure from the banks, but this is a solvable problem. They're servicing pornhub. If this is just about KYC, they can roll out or use one of the myriad identity verification services.

EE84M3i 5y ago

The tweet from their official account[1] reads: Thank you to everyone for making your voices heard. We have secured assurances necessary to support our diverse creator community and have suspended the planned October 1 policy change. OnlyFans stands for inclusion and we will continue to provide a home for all creators. This seems to match your theory. [1]: https://twitter.com/OnlyFans/status/1430499277302816773 https://twitter.com/OnlyFans/status/1430499277302816773

ziml77 5y ago

Given that people predictably started leaving the platform, I doubt it. There isn't a social network or content discoverability aspect to the service, so hopping to somewhere else is easy. And people will remain wary of OnlyFans since they could try to restrict content again since they've already shown from the original announcement that they don't really care about supporting NSFW content creators

onion2k 5y ago

One effect of the proposed ban would presumably to motivate content creators to look for alternative platforms. If it was a publicity stunt it seems like it would have had a pretty big downside.