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Talking of this, wasn't the issue for OnlyFans related to payment processing and banking? What's to stop a company like that from buying a bank and setting up i

Talking of this, wasn't the issue for OnlyFans related to payment processing and banking? What's to stop a company like that from buying a bank and setting up its own credit card? Is the main issue that it would still be a visa/master/discover card, and therefore they would have the same payment processing woes?

judge2020 5y ago
In theory nothing, in practice setting up a bank is a big undertaking and a national bank more so.
- repomies69 5y ago
  Nothing with banking is technically that difficult, it is about licenses and permissions.
  - salawat 5y ago
    Hahahahaha. No. You have no idea whatsoever. The financial services industry might as well be a surveillance mechanism for the U.S. government at this point. Compliance/AML/KYC is huge, complex, and a giant pain in the arse.
    - mcny 5y ago
      Absolutely. Simple Bank tried so hard and so long. It just isn't easy to start a bank and probably for a good reason. For every well intentioned startup like simple, there will probably be a thousand snake oil salespeople.
jasode 5y ago
>, wasn't the issue for OnlyFans related to payment processing and banking? What's to stop a company like that from buying a bank and setting up its own credit card? Because having an "OnlyFans Bank" to underwrite the "OnlyFans Mastercard" wouldn't accomplish anything because the credit-card _network_[1] was also getting more restrictive about the adult content rules. The major separate entities in the chain of making credit cards work: - processors, gateways: e.g. early PayPal, Stripe, - payment networks: e.g. Mastercard, Visa - merchant banks: e.g. Wells Fargo Merchant Services, Worldpay Getting transactions rejected by any of those 3 middlemen would be a showstopper for many businesses. If heightened fears about child pornography and sex trafficking causes all 3 financial layers to crack down with stricter rules, it would be impossible for most businesses like OnlyFans to overcome it. So being your own bank to get around Wells Fargo Merchant rules doesn't solve the issue for Mastercard's rules unless you're willing to create a new payment communications network and convince millions of consumers to apply for a new credit-card using that unfamiliar network. It's not impossible as Discover Card and American Express did it but even they don't have the wide acceptance of Mastercard/Visa. [1] Mastercard _network_ cracking down on adult content: https://www.mastercard.com/news/perspectives/2021/protecting-our-network-protecting-you-preventing-illegal-adult-content-on-our-network/ https://www.mastercard.com/news/perspectives/2021/protecting...
- onlyrealcuzzo 5y ago
  Right - but why can't you issue your own card, on your own bank, and process your own payments? People will do a lot for good porn.
  - gruez 5y ago
    Because you're not going to get awkward questions if people found out you had a mastercard, but you are going to get it if you had a onlyfans credit card.
    - CapitalistCartr 5y ago
      I hadn't thought of such a card. Now I want one.
    - onlyrealcuzzo 5y ago
      How are people going to find out? It could be an online only thing.
      - gruez 5y ago
        try explaining that to your spouse.
        jakeva 5y ago
        not everyone is married
      - throaway46546 5y ago
        credit reports
  - 1123581321 5y ago
    It’s a good question. I’d guess a combination of the expense of operating all three, obtaining the banking license and surviving US Treasury Dep’t scrutiny and pressure. In 2021 it’s probably much easier and cheaper to accept cryptocurrency and let the user figure out how to move the money from their bank account to their wallet(s).
repomies69 5y ago
> What's to stop a company like that from buying a bank and setting up its own credit card? They can set up their own credit card network, sure. If they want to issue their own credit card with existing network like visa or mastercard, they need permission from visa or mastercard. These payment networks have huge network effects. I can't imagine anyone really entering that market.
TheOnly92 5y ago
The problem is in the end, you still need to move the money from the customer's bank to yours. That can happen either directly, or through an intermediary. If you have a direct relationship with the customer's bank, then all is well and dandy, but as a risky business you'd probably have a hard time doing this kind of direct relationship. The easier alternative is to find an intermediary bank that has connections to a lot of major banks. If you can actually find an intermediary bank willing to do business with you, i.e. open a corresponding account for your business, then you can pretty much accept payments. The trouble is if other banks find out that your intermediary bank is doing business with you, they might be able to force your intermediary bank to cut off that relation. I believe Bitfinex allegedly had that issue. So in the end, unless the customer is directly handing in cash to you, you're pretty much at someone's mercy, regardless of what channel the payment is performed in. If you want to setup a new credit card brand, better make sure the customer's bank is willing to send you the funds when its time for settlement.

judge2020 5y ago

In theory nothing, in practice setting up a bank is a big undertaking and a national bank more so.

repomies69 5y ago
Nothing with banking is technically that difficult, it is about licenses and permissions.
- salawat 5y ago
  Hahahahaha. No. You have no idea whatsoever. The financial services industry might as well be a surveillance mechanism for the U.S. government at this point. Compliance/AML/KYC is huge, complex, and a giant pain in the arse.
  - mcny 5y ago
    Absolutely. Simple Bank tried so hard and so long. It just isn't easy to start a bank and probably for a good reason. For every well intentioned startup like simple, there will probably be a thousand snake oil salespeople.

jasode 5y ago

>, wasn't the issue for OnlyFans related to payment processing and banking? What's to stop a company like that from buying a bank and setting up its own credit card? Because having an "OnlyFans Bank" to underwrite the "OnlyFans Mastercard" wouldn't accomplish anything because the credit-card _network_[1] was also getting more restrictive about the adult content rules. The major separate entities in the chain of making credit cards work: - processors, gateways: e.g. early PayPal, Stripe, - payment networks: e.g. Mastercard, Visa - merchant banks: e.g. Wells Fargo Merchant Services, Worldpay Getting transactions rejected by any of those 3 middlemen would be a showstopper for many businesses. If heightened fears about child pornography and sex trafficking causes all 3 financial layers to crack down with stricter rules, it would be impossible for most businesses like OnlyFans to overcome it. So being your own bank to get around Wells Fargo Merchant rules doesn't solve the issue for Mastercard's rules unless you're willing to create a new payment communications network and convince millions of consumers to apply for a new credit-card using that unfamiliar network. It's not impossible as Discover Card and American Express did it but even they don't have the wide acceptance of Mastercard/Visa. [1] Mastercard _network_ cracking down on adult content: https://www.mastercard.com/news/perspectives/2021/protecting-our-network-protecting-you-preventing-illegal-adult-content-on-our-network/ https://www.mastercard.com/news/perspectives/2021/protecting...

onlyrealcuzzo 5y ago
Right - but why can't you issue your own card, on your own bank, and process your own payments? People will do a lot for good porn.
- gruez 5y ago
  Because you're not going to get awkward questions if people found out you had a mastercard, but you are going to get it if you had a onlyfans credit card.
  - CapitalistCartr 5y ago
    I hadn't thought of such a card. Now I want one.
  - onlyrealcuzzo 5y ago
    How are people going to find out? It could be an online only thing.
    - gruez 5y ago
      try explaining that to your spouse.
      - jakeva 5y ago
        not everyone is married
    - throaway46546 5y ago
      credit reports
- 1123581321 5y ago
  It’s a good question. I’d guess a combination of the expense of operating all three, obtaining the banking license and surviving US Treasury Dep’t scrutiny and pressure. In 2021 it’s probably much easier and cheaper to accept cryptocurrency and let the user figure out how to move the money from their bank account to their wallet(s).

repomies69 5y ago

> What's to stop a company like that from buying a bank and setting up its own credit card? They can set up their own credit card network, sure. If they want to issue their own credit card with existing network like visa or mastercard, they need permission from visa or mastercard. These payment networks have huge network effects. I can't imagine anyone really entering that market.

TheOnly92 5y ago

The problem is in the end, you still need to move the money from the customer's bank to yours. That can happen either directly, or through an intermediary. If you have a direct relationship with the customer's bank, then all is well and dandy, but as a risky business you'd probably have a hard time doing this kind of direct relationship. The easier alternative is to find an intermediary bank that has connections to a lot of major banks. If you can actually find an intermediary bank willing to do business with you, i.e. open a corresponding account for your business, then you can pretty much accept payments. The trouble is if other banks find out that your intermediary bank is doing business with you, they might be able to force your intermediary bank to cut off that relation. I believe Bitfinex allegedly had that issue. So in the end, unless the customer is directly handing in cash to you, you're pretty much at someone's mercy, regardless of what channel the payment is performed in. If you want to setup a new credit card brand, better make sure the customer's bank is willing to send you the funds when its time for settlement.