8 ms·

Gumroad no longer allows most NSFW art, leaving its adult creators panicked

51 points by rahidz 3y ago

falcolas 3y ago
I'm sure this will end well for them. I guess if you go out of business, you don't have to worry about running afoul of your choice of payment provider's requirements. So far as I know, Gumroad is basically the artists' OF. Without porn, what will they really have left?
- gjsman-1000 3y ago
  Reminder that NSFW content has disproportionate amounts of fraud and chargebacks. This is also why Stripe, PayPal, Visa, etc. hate it just from a business perspective.
  - falcolas 3y ago
    I know. But I also know that if NSFW content makes up the majority of your store and/or sales, it behooves you to find a payment processor who accepts that risk (albeit at a higher cost).
    - latency-guy2 3y ago
      Then the artist can take on the risk by establishing their own business and finding a payment processor who accepts that risk instead. Will they? Won't they?
      - Denvercoder9 3y ago
        If everyone on your platform does that, you no longer have a platform though. Banning/outlawing the majority of your users, no matter how annoying or costly they are, is generally not a winning move for a platform that lives off its users.
        shawn_w 3y ago
        You'd think they would have learned from the example of Tumblr.
    - moooo99 3y ago
      Funnily enough, I bought lots of stuff on GumRoad and wasn’t aware that NSFW is huge there. I only knew it as the platform for online courses, ebooks and mediocre notion templates
  - PedroBatista 3y ago
    That's "common knowledge" but I wonder how true that is. I have a feeling NSFW attracts more problems from a "moral", political and pressure groups perspective than actual fraud and that's the main reason companies don't want to touch it.
    - gjsman-1000 3y ago
      The rate depends, but take OnlyFans: They cascade (I.e. spread out) payments across at least 3 providers, and automatically rotate between them to avoid any of them getting a rate too high. Seems like quite a bit of logistics if it was not really an issue.
      - nhinck2 3y ago
        But a rates a rate?
      - pseudo0 3y ago
        That doesn't really make sense unless they have a way to flag higher-risk charges and route them to a processor that is more risk-tolerant (and usually more expensive). Eg. I could see segmenting the charges for the first month or two into a higher risk bin, and then moving recurring customers into low-risk bins on processors with cheaper rates.
      - Freak_NL 3y ago
        There is a difference between straight up porn and fan-service (OnlyFans) and the adult artwork and erotic educational content on Gumroad. I would be surprised if these suffer from the same amount of chargebacks.
    - deleted 3y ago
      [deleted]
  - zajio1am 3y ago
    So why not offer payment methods without chargebacks? Here in Europe, i pay 95% online payments with direct bank transfers, which do not offer chargebacks.
    - gjsman-1000 3y ago
      Because in America, direct bank payments are a pain, and come with the risk of more money being taken out than displayed onscreen. Your bank account information might also get re-used. There’s a reason why it’s common advice to use credit cards and not debit cards, simply because the fraud protections and laws are stronger.
      - danShumway 3y ago
        But if you can't accept credit cards for some reason, no one would tell you to close up your business instead of accepting debit cards. "This specific category has a high risk of chargebacks, so it's using a less convenient/safe system" does not seem like an absurd thing for a payment processor (or a storefront) to say. Services like Paypal support direct bank access for payouts, right? The systems may not be ideal, but payment processors are not so uncomfortable with them that they won't support them at all. This doesn't really explain why payment processors couldn't restrict payments for adult material to a subsystem or charge higher transaction fees for it specifically. If this is just about risk, then... risk can be priced. It doesn't seem that complicated. You calculate the chargeback rate for the category and you price transactions for that category accordingly. Part of the financial cost of payments online goes into subsidizing risk, this is already something that we all do every time we use a credit card on a service with transaction fees. Stripe couldn't have a different pricing tier for payments or businesses operating within specific categories?
jzig 3y ago
Aren’t there payment processors that allow adult content? Makes me wonder why a platform like Gumroad couldn’t just use a different processor for customers that mark themselves as NSFW.
- Zambyte 3y ago
  As much as people love to hate it: crypto
  - colesantiago 3y ago
    absolutely not the solution.
    - tslocum 3y ago
      Why? To me, it seems like a clear solution, and is actually one of the core goals of the creation of cryptocurrency.
      - colesantiago 3y ago
        Many artists I know are ferociously against crypto and they and their fans don't know how to use crypto at all. Use bank transfer or better yet instead, purchase gifts for the creator on their Amazon, Etsy, etc wishlist in exchange for content or use gift cards. The above solutions are way better than crypto as it's mostly used for crime and illicit transactions and speculation.
        mattdesl 3y ago
        By what metric are these better solutions? Modern blockchain payment systems (see Base) have transaction fees that are an order of magnitude cheaper than any trad processors; they don’t discriminate based on moral grounds; transactions settle in seconds rather than days; they are not bound to only certain countries; funds are not custodially held by a single centralized tech company; the list goes on. Much of the rationale for anti-crypto among communities that would most benefit from it (eg: NSFW art) is ill conceived and held together by an almost religious zeal.
danShumway 3y ago
> “Should Gumroad hire a lobbyist?” he asked in an email to TechCrunch. Yes? I'm a little confused as to why platforms that feature adult material wouldn't be lobbying around payment processing requirements and regulations. I don't know much about the porn industry, but are there seriously not lobbyists in that industry? OnlyFans got (effectively) banned from multiple states. They absolutely have a legal team and a PR team that's focused on the government. How would any platform that features adult content not be looking at OnlyFans and thinking, "maybe we should start prepping for legal/regulatory battles."? I mean, heck, how are they not "lobbying" payment processors? TikTok basically unleashed its entire userbase on the government over a potential ban. When a payment processor starts messing with the content you can allow on a storefront, is there a reason why Gumroad isn't making contact information available for those payment processors and encouraging users to write to them? I'm sure it wouldn't help Stripe's relationship with Gumroad be any more chummy, but like... this is a business relationship, not a friendship. I don't know, these platforms act like they just got an edict from God rather than that they are being pressured by a business partner to make a business decision that their userbase dislikes. Am I out-of-line on this? I feel like when business agreements get restricted and that affects customers, it's relatively common for businesses to use that discontent as leverage in negotiations and not just say, "well, hands are tied, sorry everybody." When Sony restricted Spiderman, Disney was not shy about encouraging people to contact Sony. I guess I assume there are complications with business relationships with payment processors that makes that harder? I don't know if there are any payment processors that do work with adult content, maybe Gumroad just knows that it doesn't have any bargaining chips to work with? But I kind of get whiplash between looking at how companies respond to things like iOS restrictions vs how they respond to payment processing restrictions. I would have assumed that these types of businesses were already lobbying, everybody else seems to be. Maybe Gumroad is too small to have those kinds of legal resources? Is Patreon working with lobbyists? Is Kickstarter?
Freak_NL 3y ago
> “We have been asked to be more rigorous in enforcing our ToS and must comply,” Gumroad founder Sahil Lavingia told TechCrunch. He declined to say which company asked Gumroad to enforce stricter rules. This refusal to even name which payment provider is being an ass irks me, and makes me worry that this may just be a convenient excuse to get rid of adult content 'because the payment providers made me do it'. Gumroad already was hostile to adult content by forcing anyone looking for sex-related content (regardless of its type) to repeat every search by explicitly ticking the 'Show NSFW' checkbox way down the bottom of the filter list, and have to repeat this for every search, with no way of opting in in the settings.

51 points by rahidz 3y ago

I'm sure this will end well for them. I guess if you go out of business, you don't have to worry about running afoul of your choice of payment provider's requirements. So far as I know, Gumroad is basically the artists' OF. Without porn, what will they really have left?

gjsman-1000 3y ago
Reminder that NSFW content has disproportionate amounts of fraud and chargebacks. This is also why Stripe, PayPal, Visa, etc. hate it just from a business perspective.
- falcolas 3y ago
  I know. But I also know that if NSFW content makes up the majority of your store and/or sales, it behooves you to find a payment processor who accepts that risk (albeit at a higher cost).
  - latency-guy2 3y ago
    Then the artist can take on the risk by establishing their own business and finding a payment processor who accepts that risk instead. Will they? Won't they?
    - Denvercoder9 3y ago
      If everyone on your platform does that, you no longer have a platform though. Banning/outlawing the majority of your users, no matter how annoying or costly they are, is generally not a winning move for a platform that lives off its users.
      - shawn_w 3y ago
        You'd think they would have learned from the example of Tumblr.
  - moooo99 3y ago
    Funnily enough, I bought lots of stuff on GumRoad and wasn’t aware that NSFW is huge there. I only knew it as the platform for online courses, ebooks and mediocre notion templates
- PedroBatista 3y ago
  That's "common knowledge" but I wonder how true that is. I have a feeling NSFW attracts more problems from a "moral", political and pressure groups perspective than actual fraud and that's the main reason companies don't want to touch it.
  - gjsman-1000 3y ago
    The rate depends, but take OnlyFans: They cascade (I.e. spread out) payments across at least 3 providers, and automatically rotate between them to avoid any of them getting a rate too high. Seems like quite a bit of logistics if it was not really an issue.
    - nhinck2 3y ago
      But a rates a rate?
    - pseudo0 3y ago
      That doesn't really make sense unless they have a way to flag higher-risk charges and route them to a processor that is more risk-tolerant (and usually more expensive). Eg. I could see segmenting the charges for the first month or two into a higher risk bin, and then moving recurring customers into low-risk bins on processors with cheaper rates.
    - Freak_NL 3y ago
      There is a difference between straight up porn and fan-service (OnlyFans) and the adult artwork and erotic educational content on Gumroad. I would be surprised if these suffer from the same amount of chargebacks.
  - deleted 3y ago
    [deleted]
- zajio1am 3y ago
  So why not offer payment methods without chargebacks? Here in Europe, i pay 95% online payments with direct bank transfers, which do not offer chargebacks.
  - gjsman-1000 3y ago
    Because in America, direct bank payments are a pain, and come with the risk of more money being taken out than displayed onscreen. Your bank account information might also get re-used. There’s a reason why it’s common advice to use credit cards and not debit cards, simply because the fraud protections and laws are stronger.
    - danShumway 3y ago
      But if you can't accept credit cards for some reason, no one would tell you to close up your business instead of accepting debit cards. "This specific category has a high risk of chargebacks, so it's using a less convenient/safe system" does not seem like an absurd thing for a payment processor (or a storefront) to say. Services like Paypal support direct bank access for payouts, right? The systems may not be ideal, but payment processors are not so uncomfortable with them that they won't support them at all. This doesn't really explain why payment processors couldn't restrict payments for adult material to a subsystem or charge higher transaction fees for it specifically. If this is just about risk, then... risk can be priced. It doesn't seem that complicated. You calculate the chargeback rate for the category and you price transactions for that category accordingly. Part of the financial cost of payments online goes into subsidizing risk, this is already something that we all do every time we use a credit card on a service with transaction fees. Stripe couldn't have a different pricing tier for payments or businesses operating within specific categories?

jzig 3y ago

Aren’t there payment processors that allow adult content? Makes me wonder why a platform like Gumroad couldn’t just use a different processor for customers that mark themselves as NSFW.

Zambyte 3y ago
As much as people love to hate it: crypto
- colesantiago 3y ago
  absolutely not the solution.
  - tslocum 3y ago
    Why? To me, it seems like a clear solution, and is actually one of the core goals of the creation of cryptocurrency.
    - colesantiago 3y ago
      Many artists I know are ferociously against crypto and they and their fans don't know how to use crypto at all. Use bank transfer or better yet instead, purchase gifts for the creator on their Amazon, Etsy, etc wishlist in exchange for content or use gift cards. The above solutions are way better than crypto as it's mostly used for crime and illicit transactions and speculation.
      - mattdesl 3y ago
        By what metric are these better solutions? Modern blockchain payment systems (see Base) have transaction fees that are an order of magnitude cheaper than any trad processors; they don’t discriminate based on moral grounds; transactions settle in seconds rather than days; they are not bound to only certain countries; funds are not custodially held by a single centralized tech company; the list goes on. Much of the rationale for anti-crypto among communities that would most benefit from it (eg: NSFW art) is ill conceived and held together by an almost religious zeal.

danShumway 3y ago

> “Should Gumroad hire a lobbyist?” he asked in an email to TechCrunch. Yes? I'm a little confused as to why platforms that feature adult material wouldn't be lobbying around payment processing requirements and regulations. I don't know much about the porn industry, but are there seriously not lobbyists in that industry? OnlyFans got (effectively) banned from multiple states. They absolutely have a legal team and a PR team that's focused on the government. How would any platform that features adult content not be looking at OnlyFans and thinking, "maybe we should start prepping for legal/regulatory battles."? I mean, heck, how are they not "lobbying" payment processors? TikTok basically unleashed its entire userbase on the government over a potential ban. When a payment processor starts messing with the content you can allow on a storefront, is there a reason why Gumroad isn't making contact information available for those payment processors and encouraging users to write to them? I'm sure it wouldn't help Stripe's relationship with Gumroad be any more chummy, but like... this is a business relationship, not a friendship. I don't know, these platforms act like they just got an edict from God rather than that they are being pressured by a business partner to make a business decision that their userbase dislikes. Am I out-of-line on this? I feel like when business agreements get restricted and that affects customers, it's relatively common for businesses to use that discontent as leverage in negotiations and not just say, "well, hands are tied, sorry everybody." When Sony restricted Spiderman, Disney was not shy about encouraging people to contact Sony. I guess I assume there are complications with business relationships with payment processors that makes that harder? I don't know if there are any payment processors that do work with adult content, maybe Gumroad just knows that it doesn't have any bargaining chips to work with? But I kind of get whiplash between looking at how companies respond to things like iOS restrictions vs how they respond to payment processing restrictions. I would have assumed that these types of businesses were already lobbying, everybody else seems to be. Maybe Gumroad is too small to have those kinds of legal resources? Is Patreon working with lobbyists? Is Kickstarter?

Freak_NL 3y ago

> “We have been asked to be more rigorous in enforcing our ToS and must comply,” Gumroad founder Sahil Lavingia told TechCrunch. He declined to say which company asked Gumroad to enforce stricter rules. This refusal to even name which payment provider is being an ass irks me, and makes me worry that this may just be a convenient excuse to get rid of adult content 'because the payment providers made me do it'. Gumroad already was hostile to adult content by forcing anyone looking for sex-related content (regardless of its type) to repeat every search by explicitly ticking the 'Show NSFW' checkbox way down the bottom of the filter list, and have to repeat this for every search, with no way of opting in in the settings.