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I don't think they're that reluctant, honestly. But it goes beyond credit card companies too. It applies to the whole banking system. It will soon be the case

• jnwatson 5y ago
  The clothing manufacturing industry is also deeply tied to human trafficking, but no one is talking about banning credit card transactions at the Nike store.
  • tantalor 5y ago
    There is no US law against that.
    • Spivak 5y ago
      Yeah, there’s a big difference between “dudes with guns will throw me in prison for this” and “as a company we cannot in good conscience contribute to xxx.” Banks and CC companies by usual standards are staying out of things more than average. If it’s not a risk to their liberty or wallets the financial sector is happy to stand back and watch all sorts of awful things.
      • arcticbull 5y ago
        And frankly, I don't want them to project their own morality on my transactions any more than I want Comcast to. It's the job of legislators to decide what is and isn't legal. This is just financial infrastructure.
        • techwizard81 5y ago
          In the case of adult content, they aren’t doing this because they are morally against it, it’s because there is a lot of porn from human trafficking, underage or simply non consensual (like stolen personal videos or revenge porn). It should not be allowed to profit from these things, so I think it’s right that the bank imposes rules on those sites for them to be able to process credit card transactions.
          • arcticbull 5y ago
            > It should not be allowed to profit from these things, so I think it’s right that the bank imposes rules on those sites for them to be able to process credit card transactions. In my opinion it's not the role of the card issuers to make this determination or to implement unilaterally the restrictions. This is a matter of law and should be handled in court.
  • devoutsalsa 5y ago
    I had no idea that human trafficking in the garment industry was a thing. https://www.borgenmagazine.com/textile-industry/ https://www.borgenmagazine.com/textile-industry/
• paisawalla 5y ago
  I find it remarkable that in the same post where you criticize those who would maintain bans on drug purchases, you end up finding your own reasons why to maintain a ban on a different vice. But sex work has externalities I guess is how you might respond, but drug bans are also based on arguments of externalized social harm. At first I thought you were going to give an argument for removing financial gatekeeping, which I think is an inappropriate point to apply leverage towards moral ends. But -- and this is the heart of the problem everywhere -- you end up picking and choosing between vices. This maintains the processor's position as the morality enforcer, which is the entire issue: it's just one more thing that power-driven agents can strive to influence.
  • HWR_14 5y ago
    > you end up finding your own reasons why to maintain a ban on a different vice. From my understanding, based on that 2018 rule, the executives at CC processors are personally liable if they process money for sex work. Like "you are an accomplice to human trafficking" guilty.
  • cletus 5y ago
    > ... where you criticize those who would maintain bans on drug purchases, you end up finding your own reasons why to maintain a ban on a different vice. Well done on missing my point entirely, possibly intentionally. I'm fine with whatever happening between consenting adults. Unfortunately, there's a link between sex work and human trafficking that cannot be ignored [1]: > Countries with legalized prostitution are associated with higher human trafficking inflows than countries where prostitution is prohibited. and > Criminalization of prostitution in Sweden resulted in the shrinking of the prostitution market and the decline of human trafficking inflows. Sex trafficking impacts people who aren't consenting (including minors). So what are the negative externalities of cannabis consumption? Long term cannabis abuse can be a problem but pales in comparison to, say, alcohol abuse. Basically, there's no world that makes sense for alcohol to be legal and cannabis not to be. Also, cannabis legalization has arguably hurt the illegal drug trade [2]. [1]: https://orgs.law.harvard.edu/lids/2014/06/12/does-legalized-prostitution-increase-human-trafficking/ https://orgs.law.harvard.edu/lids/2014/06/12/does-legalized-... [2]: https://time.com/3801889/us-legalization-marijuana-trade/ https://time.com/3801889/us-legalization-marijuana-trade/
• villasv 5y ago
  The US is an exception in its fragmented banking system. Usually there's no conflict of legality between state and federal government, and banks are consolidated in a few big players that are pretty eager to satisfy business owners demands so having bank accounts is not usually an issue (even for somewhat-illegal or unregulated market business). Even startups nowadays are getting fast access to corporate credit cards. But credit cards are on scope of an entirely different order of magnitude compared to a local bank checking account. Visa and Mastercard are global authorities on cashflow. And this is exactly why they're accidentally becoming regulators, they transcend the US weirdly fragmented banking system.
• A4ET8a8uTh0 5y ago
  I was initially going to say the same thing, but then I reflected on what I saw in the past. In a very real sense, government required compliance effectively forces banks into a gatekeeper position. And while some BSA enforcers do act in their interest the same any group does ( cops, politicians, IC, doctors ) by extending their reach and influence, others are wary of expanding it beyond current regime ( which is already pretty onerous ). It does help that banks tend to get very sensitive about some things as they do rely on deposits to survive. In one of the banks I used to work for, teller BSA training included a mention to be sensitive about customers and questions along with a story of a teller, who prodded a little beyond what the customer deemed acceptable and who then proceeded to close the account with 'none of your god damn business'. What I am saying is that things are only the way they are, because we allow it that way. Cash is still a viable, albeit annoying choice. And banks have been complacent until now, but the cost of complacency seems to be going up. All that said, ABA better gets it shit together. Between high compliance burden on banks combined with low to non-existent compliance on fintech startups can quickly amount to real trouble for the banking system in US.
• _fat_santa 5y ago
  Dispensaries are getting wise too. Even though you can't use a credit card anywhere, they have found a way for you to use a debit card. Basically it's just like an ATM withdrawl but they tie it into the checkout flow so to you the customer, its just like you paid with a debit card.
  • wutbrodo 5y ago
    I've used a credit card at dispensaries many times. Details in this comment: https://news.ycombinator.com/item?id=28829949 https://news.ycombinator.com/item?id=28829949
  • deleted 5y ago
    [deleted]
• shartacct 5y ago
  > Yet you can't use a credit card to buy cannabis pretty much anywhere AFAIK. Every dispensary I've visited here in the northeast accepts cash and debit cards, I assume they don't accept credit due to higher processing fees and higher risk of chargebacks rather than processors being problematic (otherwise they would not accept debit since they get ran through the same system anyway).
  • jeromegv 5y ago
    Your assumption is wrong, they are being refused by Square, Stripe, etc, etc. CBD are also in a grey zone which cause them tons of problems accepting credit cards. This isn't because of higher processing fees.
  • rootusrootus 5y ago
    Or they are working the system and making an ATM withdrawal look like a debit from the consumer's point of view.
    • shartacct 5y ago
      How does that make any sense? I put my card into the reader and it debited from my bank account. I didn't pull cash from an ATM and there was no ATM present in the business.
      • Swizec 5y ago
        In California they charge your debit card and return cash change. They even overcharge your card to ensure there is cash to give back. $5 or so. This turns it into an ATM withdrawal apparently.
        • HeyLaughingBoy 5y ago
          And the really nice thing about this is that there are no fees. If I just need $80 or so (I think the limit is $100), it's faster to go to the local Walmart and buy a candy bar or something and get back $80 cash than to go the closest ATM owned by my bank to avoid the double dipping fees.
• kevingadd 5y ago
  Human trafficking isn't happening on Patreon or OnlyFans, though.
• some_random 5y ago
  >It will soon be the case where the majority of Americans live in states where recreational cannabis is legal (it was ~1 in 3 last year but NY, NJ and others will push it over). Yet you can't use a credit card to buy cannabis pretty much anywhere AFAIK. There is not a single state where cannabis is legal, there are only states that have decided they won't enforce federal law.
  • doublescoop 5y ago
    No states enforce federal laws. The federal government does that. If there is no state law criminalizing cannabis use there it's legal in that state.
    • throwaway0a5e 5y ago
      The locals generally enforce and investigate and then the feds prosecute.
    • School-Cotton 5y ago
      No, the feds refusing to prosecute doesn’t make it legal. Federal crimes are crimes everywhere, even in states that don’t have the same crime on their statute books.
  • vdqtp3 5y ago
    States don't enforce federal law.
  • cronix 5y ago
    > There is not a single state where cannabis is legal, there are only states that have decided they won't enforce federal law. The feds don't really enforce it either. Is there a state the feds have sanctioned over legalization? They even collect federal tax dollars on the businesses selling these "illegal" products. Unless a law is actually enforced, it's just words on paper.
• jonas21 5y ago
  > Granted, the legality of cannabis is a grey area since states allow it but the Federal government still maintains it as illegal. This isn't some incidental detail - it's the entire reason why the banking and credit card industry doesn't want to interact with cannabis right now. Guess who regulates the banking industry and has authority over interstate commerce? The federal government. This particular example has nothing to do with credit card companies making a statement against cannabis, and everything to do with them not wanting to break the law.
  • tantalor 5y ago
    You don't give the banking industry enough credit here. They are involved in designing the legislation/regulations governing themselves. The market for legal marijuana projected to be $100B by 2030. If the banks want a piece of that pie, then they will change the rules and "fix" the problem. https://flowhub.com/cannabis-industry-statistics https://flowhub.com/cannabis-industry-statistics
  • ashtonkem 5y ago
    The moment they’re legally allowed to they will be all over legal weed. It’s not like the finance industry has any issues profiting from other recreational substances, such as alcohol or tobacco.
    • 542458 5y ago
      Agreed. Any suggestion that “the banks won’t deal with $GROUP even though they could be making money” is an allegation that the banks aren’t actually very profit-motivated. This allegation seems unlikely to me. As far as I can tell, the stuff the banks won’t touch is either legally risky (weed) or financially risky.
      • arcticbull 5y ago
        The financially risky stuff they're usually willing to take on too, but the folks providing the service usually find the associated interchange fees unreasonable.
• wutbrodo 5y ago
  > Yet you can't use a credit card to buy cannabis pretty much anywhere AFAIK. The dispensaries I've been to in LA will generally take credit cards now. They round it up to multiples of 5 and give you change in cash, and I think under-the-hood they're doing a cash advance or something? This doesn't detract from your point; if anything, it reinforces it. Just an interesting factual point.
  • morpheuskafka 5y ago
    If they were doing this with credit cards people would know since they'd be hit with a cash advance fee and no grace period on interest.
  • romwell 5y ago
    They take cards, not credit cards. Those are debit cards; the transaction is a cashback (that's why they give change in cash).
• echelon 5y ago
  The reason the payments industry doesn't like sex isn't human trafficking. It's the high fraud and charge back rate. When your parent or partner finds out you paid for an OnlyFans membership, you lie and tell them you lost your card. This happens incredibly often, and payments companies don't want to touch this.
• xer0x 5y ago
  +1 the credit-card companies are surprisingly keen to be our morality police.
• varispeed 5y ago
  > Yet you can't use a credit card to buy cannabis pretty much anywhere AFAIK. You can in the UK. Dispensaries here do accept credit cards.
  • zinekeller 5y ago
    "anywhere" is basically inside US, not in other countries. (Yes, I also hate it, but I do concede that America is physically big.)
• dec0dedab0de 5y ago
  As for sex work, in particular, this one is tricky. While I fully support body autonomy and in an ideal world, sex-for-money and the like should be legal, it's not that simple in reality. Why? Because the sex industry is deeply tied to human trafficking. I have no idea how to solve that problem. You can't solve that problem, but I believe you could mitigate it by making prostitution legal. Funny thing is that prostitution is legal at the federal level, it's just that all the states except Nevada have laws against it. So it's kind of the opposite of cannabis, and if the credit card companies wanted to be consistent in following federal law they would allow it.
  • snotrockets 5y ago
    The Netherlands can serve as a counter-example to your wrongly held belief
    • alsetmusic 5y ago
      > The Netherlands can serve as a counter-example to your wrongly held belief This is vague. What are you saying? Please cite sources for whatever position you’re presenting (I’m not trying to be argumentative; truly can’t tell).
      • snotrockets 5y ago
        Parent has unbased beliefs, and I should do the work of doing the leg work for him? For those that has yet to learn about the Googles, then they should know that sex work is legal in the Nethelands: https://www.government.nl/topics/prostitution https://www.government.nl/topics/prostitution, yet human trafficking for prostitution is still a very real problem there: https://www.dutchnews.nl/news/2017/10/some-6000-people-a-year-in-the-netherlands-are-victims-of-trafficking/ https://www.dutchnews.nl/news/2017/10/some-6000-people-a-yea...
• obviouslynotme 5y ago
  The credit card companies, like every heavily regulated industry works like the federal government without the rules holding them back. Banking is only the most powerful hammer for it's favorite nails, but has been reluctant to use it much until recently. Once they started removing the gun industry's credit card access, it has slowly creeped everywhere. I am happy because it will only be a matter of time before people move to alternatives like crypto.
• stooliepidgin 5y ago
  > sex industry is deeply tied to human trafficking Which career? Where? Sex workers encompasses a number of careers including escorts, prostitutes, strippers, burlesque dancers, cabaret artists, nude models, and solo and porn performers. Prostitution is already legal in most of the world, apart from the puritanical US where prohibition is seen as a panacea. Sex work is not the problem. When human trafficking is prevented and policed sufficiently and the participants are assured to be consenting adults, there are no valid objections remaining apart from shrieks from moral panickers believing sex will bring about the rapture. Solve human trafficking by solve human trafficking, not by blaming sex work or sex workers.
• heavyset_go 5y ago
  > Why? Because the sex industry is deeply tied to human trafficking. I have no idea how to solve that problem. I mean, drug trafficking is deeply tied to human trafficking, as well, and your post concerns cannabis legalization, which is one way to combat that problem.
• robbedpeter 5y ago
  The benefit of public oversight over free trade is accountability via due process. If you manufacture a hot dog and it's contaminated with something, or falsely advertised as kosher or halal, or doesn't meet any of a thousand little constraints in production, maintenance, delivery, and communication about the product, you are held accountable for violating the law. Sex trade is different because of stigma and culture and prohibition. Stigma and culture have to change through education, activism, and time, but prohibition can be dealt with immediately. Create a robust framework of protections for sex work, protecting the rights of workers, and incorporate the industry into the existing legal system. Getting rid of trafficking, pimps, and lack of recourse for workers and consumers negates far greater harms than any moral social corruption predicted by pearl clutchers. The same applies to almost everything which society tries to cope with through prohibition. Black markets spawn second class dealers in vice, money and trade off book to the detriment of everyone except kingpins and corrupt agents of government and law enforcement. The vulnerable and desperate get locked into feedback loops of abuse and exploitation. Legalizing all drugs and sex work almost completely eliminates the niches that perpetuate black markets. Forcing banks and legal jurisdictions to treat trade in vice equally to any other economic activity gives society the opportunity to treat drug abuse as a health issue. It enables sex workers to receive justice for abuse. It virtually eliminates the primary sources of income for cartels and kingpins. It forces culture to adapt, eventually allowing activists the opportunity to destigmatize responsible activities of adults in private. We have laws that protect consumers and service providers, that give resource for violence and theft and fraud. It shouldn't matter what substance or sex act or hot dog brand was involved if a citizen is injured. Adults have no business telling other adults what they can consume, or do in private. The business of government is behavior in public and in maintaining the rights of citizens in private. We have ample and overwhelming evidence that prohibition always creates more harm than good, across thousands of years of history. It never works and always creates opportunities for abuse and horror. We also know that legalized vice results in more responsible use and less frequent consumption and fewer harms across the board. It should be a no brainer. We should have responsible drug use education. We should have public sex work education. Financial institutions crafting pseudo-moral gatekeeping policy from the whims of executives, pr departments, and Twitter outrage is a disgusting offense against society.