5 ms·

According to previous posts* this company sells something related to cannibis. I'd love to know why certain categories are always flagged or silently banned. C

According to previous posts* this company sells something related to cannibis. I'd love to know why certain categories are always flagged or silently banned. Cannibis, sex toys, porn, crypto, etc. Payment processors seem to always give these categories the worst service and whenever a company is nuked like this, it's usually one of these categories. Why is that? It almost feels like there's some secret government organization tasked with upholding religious values telling payment processors to fuck with random accounts and swearing them to secrecy. I obviously don't believe that, but it's equivalent to the scale of whatever is going on due to natural causes. I don't believe that these industries are prone to higher than usual fraud. So what is it? * - https://news.ycombinator.com/item?id=32263429 https://news.ycombinator.com/item?id=32263429

jdminhbg 4y ago
Re: cannabis, it's federally illegal and you can get into serious legal trouble for facilitating payments. There have been several attempts to write legislation to fix this so state-legal cannabis operations don't have to work entirely with cash, but none have passed yet. Re: porn, the issue is its sky-high chargeback rates.
carrotcarrot 4y ago
"whatever is going on due to natural causes" lol
soared 4y ago
In addition to the other comment about cannabis, crypto is financial and comes with many laws and regulations that a payment process would need to be very aware of and follow. Porn is ripe with fraud/theft/bad actors/etc. It’s not a shadow government, it’s common sense.
- pas 4y ago
  It is a shadow government but it also makes sense.
  - soared 4y ago
    It’s not a shadow government if the laws and policy are public. You can read all of the laws.
    - deely3 4y ago
      Basically "educate yourself", yes?
    - from 4y ago
      > It’s not a shadow government if the laws and policy are public. You can read all of the laws. This is not really true. The BSA says banks have to maintain an "adequate AML program" and policies to "reasonably know your customers identities" or whatever. These policies are deliberately vague. Then based on these deliberately vague rules, banks have to make a compliance program that usually goes above and beyond the minimum that is required (in order to avoid being fined). These compliance programs that specify what kinds of behavior and transactions to consider risky are never made public.
    - pas 4y ago
      there's no FOIA for banking processes that affect you. consumer finance protection regulations are also a complete joke (oh no, banks have to file some more reports, oh the horror).
dflock 4y ago
> I don't believe that these industries are prone to higher than usual fraud. This belief might be wrong - or at least not shared by payment processors?
jabart 4y ago
Credit card processing requires a sponsor bank, and that sponsor bank sets what categories they want to process for. If you fall out of that, or the account gets reviewed a second time and someone thinks it falls into one of those categories, the account is shut down. OF almost had this happen to them because of their sponsor bank and I've seen it happen for other companies from the underwriting department (not stripe, another processor).
mellavora 4y ago
re: sex toys, potential felony in texas https://en.wikipedia.org/wiki/Texas_obscenity_statute https://en.wikipedia.org/wiki/Texas_obscenity_statute or google "texas six dildoes" <edit> https://www.theregister.com/2016/12/13/us_purchase_government_spying/ https://www.theregister.com/2016/12/13/us_purchase_governmen... and https://onwardtexas.org/trending/is-it-illegal-to-own-more-than-six-dildos-in-texas-yes-it-is/ https://onwardtexas.org/trending/is-it-illegal-to-own-more-t... which was posted on HN about 3 months ago and flagged. </edit>
- thro388 4y ago
  You could rape someone with a dildo, it is basically a gun and should be banned as such!
themoonisachees 4y ago
Cannabis is federally illegal, sex toys and porn have incredibly high chargeback rates and crypto has this handy thing where since you can't reverse anything, as soon as the crypto you bought is out of the custody wallet you cant get the thing back so the chargeback rates are also very high. Don't believe me? Ask anyone at the front desk of a hotel the rate of attempted chargebacks for ppv porn. You can get vetted by banks, visa and co for those things (maybe not cannabis with US companies) but the fees are considerably higher because of the chargeback rates. This is why onlyfans announced then backtracked the porn ban, visa told them "either you're paying us like you distribute porn, or you stop doing it".
- jesterson 4y ago
  If it's the case, perhaps it makes more sense to block based on chargeback rate (that's actually what payment processors are doing) instead of blocking on nature of business?
  - remram 4y ago
    This seems incredibly obvious, and would probably be fairly easy once your business picks up volume. That or make you absorb the charge backs yourself, or via an independently-contracted insurance.
- remram 4y ago
  > the front desk of a hotel the rate of attempted chargebacks for ppv porn To be honest this seems more like a hotel problem than a porn problem. E.g., I viewed it by mistake, I didn't understand the pricing, etc. I would expect that there is a similar amount of complaints about the hotel room's minibar and snacks that are lying there but charged an incredible rate afterwards if touched.
lmm 4y ago
> It almost feels like there's some secret government organization tasked with upholding religious values telling payment processors to fuck with random accounts and swearing them to secrecy. I obviously don't believe that, but it's equivalent to the scale of whatever is going on due to natural causes. Operation Choke Point pretty much worked like that. I don't have a problem with the government fucking with the cannibis business given that it's still federally illegal, but the messing with legal businesses needs to stop.
motohagiography 4y ago
It may be related to a general policy of burning grey market businesses that has been going on for a decade or so: https://en.wikipedia.org/wiki/Operation_Choke_Point https://en.wikipedia.org/wiki/Operation_Choke_Point While I don't know what the incentives are for payment processors, they act as though they are under a quota, similar to SARs in banks, where it's mainly about showing they are getting petty crime as a means to protect their interest in partnership level crime.
Cederfjard 4y ago
Am I missing something? That thread from almost two months ago is about a completely different business. OP linked it in his initial post, mentioning that reading it was what triggered him to post this one, but nothing more than that.
iuiz 4y ago
Nice to see my post linked. Last time I was accused of being a shill account, however I just do not post often. :D
psteinweber 4y ago
There’s a really good Podcast from FT on the payment issues with porn. It’s more complicated than the chargeback rates. If you want to go down that rabbit hole: https://www.ft.com/content/762e4648-06d7-4abd-8d1e-ccefb74b3244 https://www.ft.com/content/762e4648-06d7-4abd-8d1e-ccefb74b3... The podcast is quite a nice history wrap-up on online payments. Episode 8 addresses the current situation with credit card companies most detailed.

jdminhbg 4y ago

Re: cannabis, it's federally illegal and you can get into serious legal trouble for facilitating payments. There have been several attempts to write legislation to fix this so state-legal cannabis operations don't have to work entirely with cash, but none have passed yet. Re: porn, the issue is its sky-high chargeback rates.

carrotcarrot 4y ago

"whatever is going on due to natural causes" lol

soared 4y ago

In addition to the other comment about cannabis, crypto is financial and comes with many laws and regulations that a payment process would need to be very aware of and follow. Porn is ripe with fraud/theft/bad actors/etc. It’s not a shadow government, it’s common sense.

pas 4y ago
It is a shadow government but it also makes sense.
- soared 4y ago
  It’s not a shadow government if the laws and policy are public. You can read all of the laws.
  - deely3 4y ago
    Basically "educate yourself", yes?
  - from 4y ago
    > It’s not a shadow government if the laws and policy are public. You can read all of the laws. This is not really true. The BSA says banks have to maintain an "adequate AML program" and policies to "reasonably know your customers identities" or whatever. These policies are deliberately vague. Then based on these deliberately vague rules, banks have to make a compliance program that usually goes above and beyond the minimum that is required (in order to avoid being fined). These compliance programs that specify what kinds of behavior and transactions to consider risky are never made public.
  - pas 4y ago
    there's no FOIA for banking processes that affect you. consumer finance protection regulations are also a complete joke (oh no, banks have to file some more reports, oh the horror).

dflock 4y ago

> I don't believe that these industries are prone to higher than usual fraud. This belief might be wrong - or at least not shared by payment processors?

jabart 4y ago

Credit card processing requires a sponsor bank, and that sponsor bank sets what categories they want to process for. If you fall out of that, or the account gets reviewed a second time and someone thinks it falls into one of those categories, the account is shut down. OF almost had this happen to them because of their sponsor bank and I've seen it happen for other companies from the underwriting department (not stripe, another processor).

mellavora 4y ago

re: sex toys, potential felony in texas https://en.wikipedia.org/wiki/Texas_obscenity_statute https://en.wikipedia.org/wiki/Texas_obscenity_statute or google "texas six dildoes" <edit> https://www.theregister.com/2016/12/13/us_purchase_government_spying/ https://www.theregister.com/2016/12/13/us_purchase_governmen... and https://onwardtexas.org/trending/is-it-illegal-to-own-more-than-six-dildos-in-texas-yes-it-is/ https://onwardtexas.org/trending/is-it-illegal-to-own-more-t... which was posted on HN about 3 months ago and flagged. </edit>

thro388 4y ago
You could rape someone with a dildo, it is basically a gun and should be banned as such!

themoonisachees 4y ago

Cannabis is federally illegal, sex toys and porn have incredibly high chargeback rates and crypto has this handy thing where since you can't reverse anything, as soon as the crypto you bought is out of the custody wallet you cant get the thing back so the chargeback rates are also very high. Don't believe me? Ask anyone at the front desk of a hotel the rate of attempted chargebacks for ppv porn. You can get vetted by banks, visa and co for those things (maybe not cannabis with US companies) but the fees are considerably higher because of the chargeback rates. This is why onlyfans announced then backtracked the porn ban, visa told them "either you're paying us like you distribute porn, or you stop doing it".

jesterson 4y ago
If it's the case, perhaps it makes more sense to block based on chargeback rate (that's actually what payment processors are doing) instead of blocking on nature of business?
- remram 4y ago
  This seems incredibly obvious, and would probably be fairly easy once your business picks up volume. That or make you absorb the charge backs yourself, or via an independently-contracted insurance.
remram 4y ago
> the front desk of a hotel the rate of attempted chargebacks for ppv porn To be honest this seems more like a hotel problem than a porn problem. E.g., I viewed it by mistake, I didn't understand the pricing, etc. I would expect that there is a similar amount of complaints about the hotel room's minibar and snacks that are lying there but charged an incredible rate afterwards if touched.

lmm 4y ago

> It almost feels like there's some secret government organization tasked with upholding religious values telling payment processors to fuck with random accounts and swearing them to secrecy. I obviously don't believe that, but it's equivalent to the scale of whatever is going on due to natural causes. Operation Choke Point pretty much worked like that. I don't have a problem with the government fucking with the cannibis business given that it's still federally illegal, but the messing with legal businesses needs to stop.

motohagiography 4y ago

It may be related to a general policy of burning grey market businesses that has been going on for a decade or so: https://en.wikipedia.org/wiki/Operation_Choke_Point https://en.wikipedia.org/wiki/Operation_Choke_Point While I don't know what the incentives are for payment processors, they act as though they are under a quota, similar to SARs in banks, where it's mainly about showing they are getting petty crime as a means to protect their interest in partnership level crime.

Cederfjard 4y ago

Am I missing something? That thread from almost two months ago is about a completely different business. OP linked it in his initial post, mentioning that reading it was what triggered him to post this one, but nothing more than that.

iuiz 4y ago

Nice to see my post linked. Last time I was accused of being a shill account, however I just do not post often. :D

psteinweber 4y ago

There’s a really good Podcast from FT on the payment issues with porn. It’s more complicated than the chargeback rates. If you want to go down that rabbit hole: https://www.ft.com/content/762e4648-06d7-4abd-8d1e-ccefb74b3244 https://www.ft.com/content/762e4648-06d7-4abd-8d1e-ccefb74b3... The podcast is quite a nice history wrap-up on online payments. Episode 8 addresses the current situation with credit card companies most detailed.