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I would go further and remove the "lawful" from that. If you pay me $50 it shouldn't matter to the payment processor whether I gave you a painting or a blow job

I would go further and remove the "lawful" from that. If you pay me $50 it shouldn't matter to the payment processor whether I gave you a painting or a blow job in return.

smilespray 3y ago
That went from lawful to mouthful pretty quickly.
hgsgm 3y ago
How would you handle chargeback claims? Should all users of the system share in the fraud risk?
- jaxrtech 3y ago
  I never can tell if chargebacks are truly a feature or a bug.
- arcticbull 3y ago
  Same way it's handled now, you charge a higher processing fee proportional to the chargeback risk in the industry. My only argument is that networks shouldn't be able to capriciously deny transactions that are legal, even if I disagree with them. I don't believe in the 2nd amendment, but to the extent it is lawful to buy a gun, you should be able to buy it with your Visa card, imo, and a lot of payment acquirers do not permit it. Similarly, legal drugs.
  - nickff 3y ago
    The reason the networks started denying service to firearms dealers is that the (Obama-era) Department of Justice pressured them to. They also went after pornography and marijuana dealers. https://en.wikipedia.org/wiki/Operation_Choke_Point https://en.wikipedia.org/wiki/Operation_Choke_Point
    - arcticbull 3y ago
      I don't disagree! I'm saying that by law that should not be an option.
  - Georgelemental 3y ago
    OK, the processing fee for PornHub and gun stores is now 237%. What are you going to do about it?
    - arcticbull 3y ago
      No idea where you got "237%" but no, of course, the rule I have in mind would require charging fees proportional to the risk. This is well-worn ground. And if somehow the risk is double what the charge is (?!) then that's the risk. They'll have to step up their customer validation at PornHub.
      - lazide 3y ago
        The poster was noting there is historic precedent for parties to charge punitive fees to the point it’s defacto banned for things they don’t like. It would be challenging to stop without mandating some explicit formula too, which can be gamed.
        stale2002 3y ago
        > The poster was noting there is historic precedent for parties to charge punitive fees to the point it’s defacto banned Obviously, the answer is to disallow that. And if people break the law, and do it anyway, by trying to be "clever" then a judge and jury can punish them. This punishment works especially well, with this thing called "discovery", in which the legal system can parse through your internal communications, to see if you are intending on defacto banning it. > It would be challenging to stop without mandating some explicit formula too No it wouldn't be. Just do it, like we do many other laws. Give a vague description of whats not allowed, and let the jury figure it out. And give a large fine if they lose the court case. That's enough deterrence to stop people from gaming the system. Just give them a huge fine if they try to do that.
        lazide 3y ago
        The reason that it is the way it is now is because people want it that way. So good luck with that.
- ianai 3y ago
  Someone charging back an illicit activity shouldn’t want it exposed to any inquisitive process-so don’t. Ie make it legal for the provider to report it, perhaps anonymously.
- deleted 3y ago
  [deleted]
theturtletalks 3y ago
It's a clever setup. Using laws like the Anti-Money Laundering rules, the government nudges credit card companies to avoid high-risk businesses. These companies can then turn away any business without explaining why, all in the name of "security through obscurity." But when you think about it, this setup skips past important legal protections like due process and the presumption of innocence. It's like the government has quietly asked Visa and Mastercard to play judge and jury.
- A4ET8a8uTh0 3y ago
  Which is extra interesting now, because fintrac and US treasury lately had to address issues of derisking ( banks choosing the easy way out from the burden of explaining every instance SAR and UTR was not filed ). Breaking point was coming for a while with crypto being an interesting symptom of the issue, but clearly things did not get bad enough yet.
- cyanydeez 3y ago
  On the other end you have crypto. Unfettered electronic currency has not shined a light on honest arbiters
  - deleted 3y ago
    [deleted]
- er4hn 3y ago
  patio11 covers this a bit in a series of blog posts in his newsletter: https://www.bitsaboutmoney.com/archive/money-laundering-and-aml-compliance/?ref=bits-about-money-newsletter https://www.bitsaboutmoney.com/archive/money-laundering-and-.... Quoting a relevant paragraph from the AML post above: Much like KYC, AML policies are recursive stochastic management of crime. The state deputizes financial institutions to, in effect, change the physics of money. In particular, it wants them to situationally repudiate the fungibility of money. (Fungibility is the property that $1 is $1 and, moreover, that you are utterly indifferent between particular dollars.) They are not required to catch every criminal moving money (that would not be a positive result!)
wwweston 3y ago
Would you feel differently for someone hired to break into your home and retrieve valuables or information? Or perhaps hired to perform a hit on the life of someone you care about? Transactional sex might not be something you want people drawing lines around with financial regulation, but usually people have a line.
- LewisVerstappen 3y ago
  Nope. There are other mechanisms to target illegal actions, such as sending the police to arrest the person. Those actions are guarded by due process and the right to trial. Using the financial system to target people is not.
  - tchaffee 3y ago
    So you would willingly, knowingly, and personally process a transaction to kill someone? Not your problem, let the police discover it?
    - zhfliz 3y ago
      if you know about/suspect it you report it. how do you know with 100% certainty/due process that this is indeed the case and it's not just your ML algorithm going crazy? people can also pay with physical money if they desire to do so.
      - tchaffee 3y ago
        What I asked is specific: if you know the money is for a hit job will you still accept the business and take your fee or is there a moral line you personally won't cross? Yes, it's the job of the police to investigate but do you want the freedom to not engage in business that you consider evil?
        zhfliz 3y ago
        at best you suspect it, you don't know it unless you're on the sending or receiving side of the transaction. it shouldn't be my decision whether i want to allow the transaction, even if i wouldn't want to allow it. i'm not in a position to perform due legal process to determine whether you're indeed being paid for a hit job. the provider should be in a neutral position.
tchaffee 3y ago
And if it's for human trafficking? Payment processors are made up of people, and people have to have the freedom of drawing a moral line they won't cross. The real problem as I see it is that payment processing is a near monopoly. Better competition and smaller players would almost guarantee that every transaction except the most egregious would have a willing payment processor. Diversity is so often the best answer over a one size fits all rule.
- polski-g 3y ago
  > Payment processors are made up of people, and people have to have the freedom of drawing a moral line they won't cross Not for services deemed important enough: > U.S. Supreme Court on Monday rejected an appeal from Kim Davis, the former Kentucky county clerk who cited her religious beliefs in refusing to issue marriage licenses to same-sex couples
- darkerside 3y ago
  It's odd to me that the way to combat this is to freeze money. Yes, money is the lifeblood, but that means you can also follow the money to the source. Wouldn't you want to do that instead of freezing it and killing the lead?
  - tchaffee 3y ago
    Depends on the case. If you already know who belongs to a terrorist organization then maybe stopping the money and limiting the ability to terrorize would be a higher priority.
  - elzbardico 3y ago
    Well, it looks like a lot of this is designed to make the job of law enforcement easier because politicians that seem "tough" on crime have better election prospects. Freezing the money is far more dramatic and provides nice numbers for said politician's re-election campaign.
  - kelnos 3y ago
    Sometimes the people who own that money are out of jurisdictional reach.
colinsane 3y ago
if the payment processor knew the transaction was for a contract killing but processed it anyway, would they not be facilitating a crime (“aiding and abetting”)? are you saying we should specifically exempt payment processors from being held responsible for crimes that the rest of us — or any other business — could be found guilty of when performing the same functions? or are you suggesting something more broad: that in the chain of cause and effect that eventually effects a crime, only the “last” party should ever be held responsible? e.g. anyone can sell weapons to anybody, only the person who pulls the trigger should be legally responsible? in this case presumably it’s legal to hire a contract killer, the only illegal part is the killing itself, and a skilled contractor could probably shift that final act onto the victim as well.
- FateOfNations 3y ago
  If they knew the payment was for a contract killing, they should be picking up the phone and calling law enforcement. This isn’t even about individual transactions. The situation here is more like them saying, “your business has characteristics in common with the kind of a business that might facilitate a contract killing and we’re lazy so we just aren’t going to do any business with you at all”.
  - jevgeni 3y ago
    The knots HN ties itself into bashing "EU regulations", but then easily deciding to impose arbitrary regulations on payment companies is a sight to behold.
    - colinsane 3y ago
      if you took a thousand people who adhere to different ethics and polled them on questions of ethics, would you expect the net responses to adhere to any consistent ethics even if each individual's responses did?
      - throwaway14356 3y ago
        I want to see a system where those who dont get what they want are compensated. Then we can all max out our unreasonablness.
throwaway14356 3y ago
I would go the other direction. You list the painting on the gov website, they do the transactions and all of the weird taxes, fees & vat around the world, check if is stolen, where it did come from, if it is real etc etc what ever weird shit they want, all you get is the after tax money. No need for accountants nor quadruple book keeping, just do the business.
- onionisafruit 3y ago
  That sounds like an expensive mess to run. If I’m wrong, then that would be a great service to have available.
YmiYugy 3y ago
Limiting access and monitoring financial services is one of the most powerful tools against organized crime, terror and corruption, tax evasion etc. So yeah, I think the lawful part is crucial. There is of course lot's of room for discussions about what should be legal.
- onionisafruit 3y ago
  I didn’t mean to say that a court shouldn’t be able to order a payment processor to not service a customer or a particular transaction. What I meant was that the payment processor shouldn’t be the one identifying the crimes.

I would go further and remove the "lawful" from that. If you pay me $50 it shouldn't matter to the payment processor whether I gave you a painting or a blow job in return.

smilespray 3y ago

That went from lawful to mouthful pretty quickly.

hgsgm 3y ago

How would you handle chargeback claims? Should all users of the system share in the fraud risk?

jaxrtech 3y ago
I never can tell if chargebacks are truly a feature or a bug.
arcticbull 3y ago
Same way it's handled now, you charge a higher processing fee proportional to the chargeback risk in the industry. My only argument is that networks shouldn't be able to capriciously deny transactions that are legal, even if I disagree with them. I don't believe in the 2nd amendment, but to the extent it is lawful to buy a gun, you should be able to buy it with your Visa card, imo, and a lot of payment acquirers do not permit it. Similarly, legal drugs.
- nickff 3y ago
  The reason the networks started denying service to firearms dealers is that the (Obama-era) Department of Justice pressured them to. They also went after pornography and marijuana dealers. https://en.wikipedia.org/wiki/Operation_Choke_Point https://en.wikipedia.org/wiki/Operation_Choke_Point
  - arcticbull 3y ago
    I don't disagree! I'm saying that by law that should not be an option.
- Georgelemental 3y ago
  OK, the processing fee for PornHub and gun stores is now 237%. What are you going to do about it?
  - arcticbull 3y ago
    No idea where you got "237%" but no, of course, the rule I have in mind would require charging fees proportional to the risk. This is well-worn ground. And if somehow the risk is double what the charge is (?!) then that's the risk. They'll have to step up their customer validation at PornHub.
    - lazide 3y ago
      The poster was noting there is historic precedent for parties to charge punitive fees to the point it’s defacto banned for things they don’t like. It would be challenging to stop without mandating some explicit formula too, which can be gamed.
      - stale2002 3y ago
        > The poster was noting there is historic precedent for parties to charge punitive fees to the point it’s defacto banned Obviously, the answer is to disallow that. And if people break the law, and do it anyway, by trying to be "clever" then a judge and jury can punish them. This punishment works especially well, with this thing called "discovery", in which the legal system can parse through your internal communications, to see if you are intending on defacto banning it. > It would be challenging to stop without mandating some explicit formula too No it wouldn't be. Just do it, like we do many other laws. Give a vague description of whats not allowed, and let the jury figure it out. And give a large fine if they lose the court case. That's enough deterrence to stop people from gaming the system. Just give them a huge fine if they try to do that.
        lazide 3y ago
        The reason that it is the way it is now is because people want it that way. So good luck with that.
ianai 3y ago
Someone charging back an illicit activity shouldn’t want it exposed to any inquisitive process-so don’t. Ie make it legal for the provider to report it, perhaps anonymously.
deleted 3y ago
[deleted]

theturtletalks 3y ago

It's a clever setup. Using laws like the Anti-Money Laundering rules, the government nudges credit card companies to avoid high-risk businesses. These companies can then turn away any business without explaining why, all in the name of "security through obscurity." But when you think about it, this setup skips past important legal protections like due process and the presumption of innocence. It's like the government has quietly asked Visa and Mastercard to play judge and jury.

A4ET8a8uTh0 3y ago
Which is extra interesting now, because fintrac and US treasury lately had to address issues of derisking ( banks choosing the easy way out from the burden of explaining every instance SAR and UTR was not filed ). Breaking point was coming for a while with crypto being an interesting symptom of the issue, but clearly things did not get bad enough yet.
cyanydeez 3y ago
On the other end you have crypto. Unfettered electronic currency has not shined a light on honest arbiters
- deleted 3y ago
  [deleted]
er4hn 3y ago
patio11 covers this a bit in a series of blog posts in his newsletter: https://www.bitsaboutmoney.com/archive/money-laundering-and-aml-compliance/?ref=bits-about-money-newsletter https://www.bitsaboutmoney.com/archive/money-laundering-and-.... Quoting a relevant paragraph from the AML post above: Much like KYC, AML policies are recursive stochastic management of crime. The state deputizes financial institutions to, in effect, change the physics of money. In particular, it wants them to situationally repudiate the fungibility of money. (Fungibility is the property that $1 is $1 and, moreover, that you are utterly indifferent between particular dollars.) They are not required to catch every criminal moving money (that would not be a positive result!)

wwweston 3y ago

Would you feel differently for someone hired to break into your home and retrieve valuables or information? Or perhaps hired to perform a hit on the life of someone you care about? Transactional sex might not be something you want people drawing lines around with financial regulation, but usually people have a line.

LewisVerstappen 3y ago
Nope. There are other mechanisms to target illegal actions, such as sending the police to arrest the person. Those actions are guarded by due process and the right to trial. Using the financial system to target people is not.
- tchaffee 3y ago
  So you would willingly, knowingly, and personally process a transaction to kill someone? Not your problem, let the police discover it?
  - zhfliz 3y ago
    if you know about/suspect it you report it. how do you know with 100% certainty/due process that this is indeed the case and it's not just your ML algorithm going crazy? people can also pay with physical money if they desire to do so.
    - tchaffee 3y ago
      What I asked is specific: if you know the money is for a hit job will you still accept the business and take your fee or is there a moral line you personally won't cross? Yes, it's the job of the police to investigate but do you want the freedom to not engage in business that you consider evil?
      - zhfliz 3y ago
        at best you suspect it, you don't know it unless you're on the sending or receiving side of the transaction. it shouldn't be my decision whether i want to allow the transaction, even if i wouldn't want to allow it. i'm not in a position to perform due legal process to determine whether you're indeed being paid for a hit job. the provider should be in a neutral position.

tchaffee 3y ago

And if it's for human trafficking? Payment processors are made up of people, and people have to have the freedom of drawing a moral line they won't cross. The real problem as I see it is that payment processing is a near monopoly. Better competition and smaller players would almost guarantee that every transaction except the most egregious would have a willing payment processor. Diversity is so often the best answer over a one size fits all rule.

polski-g 3y ago
> Payment processors are made up of people, and people have to have the freedom of drawing a moral line they won't cross Not for services deemed important enough: > U.S. Supreme Court on Monday rejected an appeal from Kim Davis, the former Kentucky county clerk who cited her religious beliefs in refusing to issue marriage licenses to same-sex couples
darkerside 3y ago
It's odd to me that the way to combat this is to freeze money. Yes, money is the lifeblood, but that means you can also follow the money to the source. Wouldn't you want to do that instead of freezing it and killing the lead?
- tchaffee 3y ago
  Depends on the case. If you already know who belongs to a terrorist organization then maybe stopping the money and limiting the ability to terrorize would be a higher priority.
- elzbardico 3y ago
  Well, it looks like a lot of this is designed to make the job of law enforcement easier because politicians that seem "tough" on crime have better election prospects. Freezing the money is far more dramatic and provides nice numbers for said politician's re-election campaign.
- kelnos 3y ago
  Sometimes the people who own that money are out of jurisdictional reach.

colinsane 3y ago

if the payment processor knew the transaction was for a contract killing but processed it anyway, would they not be facilitating a crime (“aiding and abetting”)? are you saying we should specifically exempt payment processors from being held responsible for crimes that the rest of us — or any other business — could be found guilty of when performing the same functions? or are you suggesting something more broad: that in the chain of cause and effect that eventually effects a crime, only the “last” party should ever be held responsible? e.g. anyone can sell weapons to anybody, only the person who pulls the trigger should be legally responsible? in this case presumably it’s legal to hire a contract killer, the only illegal part is the killing itself, and a skilled contractor could probably shift that final act onto the victim as well.

FateOfNations 3y ago
If they knew the payment was for a contract killing, they should be picking up the phone and calling law enforcement. This isn’t even about individual transactions. The situation here is more like them saying, “your business has characteristics in common with the kind of a business that might facilitate a contract killing and we’re lazy so we just aren’t going to do any business with you at all”.
- jevgeni 3y ago
  The knots HN ties itself into bashing "EU regulations", but then easily deciding to impose arbitrary regulations on payment companies is a sight to behold.
  - colinsane 3y ago
    if you took a thousand people who adhere to different ethics and polled them on questions of ethics, would you expect the net responses to adhere to any consistent ethics even if each individual's responses did?
    - throwaway14356 3y ago
      I want to see a system where those who dont get what they want are compensated. Then we can all max out our unreasonablness.

throwaway14356 3y ago

I would go the other direction. You list the painting on the gov website, they do the transactions and all of the weird taxes, fees & vat around the world, check if is stolen, where it did come from, if it is real etc etc what ever weird shit they want, all you get is the after tax money. No need for accountants nor quadruple book keeping, just do the business.

onionisafruit 3y ago
That sounds like an expensive mess to run. If I’m wrong, then that would be a great service to have available.

YmiYugy 3y ago

Limiting access and monitoring financial services is one of the most powerful tools against organized crime, terror and corruption, tax evasion etc. So yeah, I think the lawful part is crucial. There is of course lot's of room for discussions about what should be legal.

onionisafruit 3y ago
I didn’t mean to say that a court shouldn’t be able to order a payment processor to not service a customer or a particular transaction. What I meant was that the payment processor shouldn’t be the one identifying the crimes.