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The answer is deeper still. Remove charge backs so the credit card companies become "dumb" utilities rather than some sort of service that can provide "value ad

by zo1 5y ago

The answer is deeper still. Remove charge backs so the credit card companies become "dumb" utilities rather than some sort of service that can provide "value add". I actually don't know why it's even a genuine thing other than it's digital so "you can". In every other realm we deal with this concept using courts, police and as plain old fraud.

ALittleLight 5y ago
Why would you want to remove charge backs? If you pay for something and don't get it, have your payment instrument stolen, get tricked by a scam, etc then charge backs seem like an excellent tool to have. Charge backs are also not independent of the courts, if you trigger an illegitimate charge back then the counterparty can sue you.
- lotsofpulp 5y ago
  No need to remove chargebacks. But there does need to be an electronic analogue to paying with cash, a utility provided by the federal government. Supposedly it is being worked on and called "FedNow". https://frbservices.org/financial-services/fednow/ https://frbservices.org/financial-services/fednow/
  - anamax 5y ago
    What are the odds that FedNow will service the adult industry?
    - Nasrudith 5y ago
      Pretty good given the first ammendment and lack of other rationale such as scarcity of airwaved. A pretext to deny would be difficult for domestic companies.
      - anamax 5y ago
        The feds have been pressuring financial services companies to "de-platform" legal businesses, including those in the adult industry, for years. The govt's pretext has been "reputational risk." Isn't it nice of the feds to tell a bank that "someone" might not think well of them if they provide services to "those" people? It is established law that a business that acts at govt behest is a state actor, so that "pressure" is enough to bring the 1st amendment in. That is, if there's a 1st amendment argument. However, said de-plaforming doesn't seem to succumbed to a 1st amendment challenge. Maybe such a business would win with a first amendment argument on FedNow, but how many can survive until that decision comes down?
        lotsofpulp 5y ago
        >The feds have been pressuring financial services companies to "de-platform" legal businesses, including those in the adult industry, for years. Source? I have never heard of this.
        anamax 5y ago
        https://www.freespeechcoalition.com/blog/blog/2018/09/07/banks-adult-entertainment-and-selective-fear-of-reputational-risk-ynot https://www.freespeechcoalition.com/blog/blog/2018/09/07/ban... and https://www.wsj.com/articles/BL-252B-6265 https://www.wsj.com/articles/BL-252B-6265 see also https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3353847 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3353847
spookthesunset 5y ago
Take away chargebacks and then the tables will turn. Tons of super shady sites will capture your money and run off with it. There is a reason CC fees are so high in the porn industry and it isn’t just huge companies ripping off the little guy. The CC processor not only has to factor in the risks of client chargebacks but also the merchant themselves doing something shady (malicious or not)… say getting their DB hacked and having all the CC data in plaintext or something. Or just the merchant folds up shop and bails on the customers…. 10% rates exist for a very good reason
0ldskool 5y ago
you basically described one of the main use cases for crypto.
mtone 5y ago
I don't have numbers but I thought the motivation is that they make more money by making it safe for people to use - it encourages use and nets them more transaction fees. It probably helped kick off online shopping.

by zo1 5y ago

ALittleLight 5y ago

Why would you want to remove charge backs? If you pay for something and don't get it, have your payment instrument stolen, get tricked by a scam, etc then charge backs seem like an excellent tool to have. Charge backs are also not independent of the courts, if you trigger an illegitimate charge back then the counterparty can sue you.

lotsofpulp 5y ago
No need to remove chargebacks. But there does need to be an electronic analogue to paying with cash, a utility provided by the federal government. Supposedly it is being worked on and called "FedNow". https://frbservices.org/financial-services/fednow/ https://frbservices.org/financial-services/fednow/
- anamax 5y ago
  What are the odds that FedNow will service the adult industry?
  - Nasrudith 5y ago
    Pretty good given the first ammendment and lack of other rationale such as scarcity of airwaved. A pretext to deny would be difficult for domestic companies.
    - anamax 5y ago
      The feds have been pressuring financial services companies to "de-platform" legal businesses, including those in the adult industry, for years. The govt's pretext has been "reputational risk." Isn't it nice of the feds to tell a bank that "someone" might not think well of them if they provide services to "those" people? It is established law that a business that acts at govt behest is a state actor, so that "pressure" is enough to bring the 1st amendment in. That is, if there's a 1st amendment argument. However, said de-plaforming doesn't seem to succumbed to a 1st amendment challenge. Maybe such a business would win with a first amendment argument on FedNow, but how many can survive until that decision comes down?
      - lotsofpulp 5y ago
        >The feds have been pressuring financial services companies to "de-platform" legal businesses, including those in the adult industry, for years. Source? I have never heard of this.
        anamax 5y ago
        https://www.freespeechcoalition.com/blog/blog/2018/09/07/banks-adult-entertainment-and-selective-fear-of-reputational-risk-ynot https://www.freespeechcoalition.com/blog/blog/2018/09/07/ban... and https://www.wsj.com/articles/BL-252B-6265 https://www.wsj.com/articles/BL-252B-6265 see also https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3353847 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3353847

spookthesunset 5y ago

Take away chargebacks and then the tables will turn. Tons of super shady sites will capture your money and run off with it. There is a reason CC fees are so high in the porn industry and it isn’t just huge companies ripping off the little guy. The CC processor not only has to factor in the risks of client chargebacks but also the merchant themselves doing something shady (malicious or not)… say getting their DB hacked and having all the CC data in plaintext or something. Or just the merchant folds up shop and bails on the customers…. 10% rates exist for a very good reason

0ldskool 5y ago

you basically described one of the main use cases for crypto.

mtone 5y ago

I don't have numbers but I thought the motivation is that they make more money by making it safe for people to use - it encourages use and nets them more transaction fees. It probably helped kick off online shopping.