4 ms·

Serious question - why do credit card companies care? What harm does it do to them if people buy adult oriented games?

Apreche 1y ago
The same reason they make it difficult to use credit cards for gambling. Merchants that sell porn, gambling, and other vice have higher rates of fraud. If they allow them to accept credit cards at all, they charge them much higher merchant’s fees to do so.
- Insanity 1y ago
  Ah, gotcha. That rationale does make some sense then.
  - BizarroLand 1y ago
    Well, until you realize that the merchants affected in this specific incidence, itch.io and steam, have had 12 and 21 years respectively of operation without causing issue for online payment systems, indicating that this is a BS excuse.
    - babelfish 1y ago
      If the payment systems find that 90% of the fraud/chargebacks through these platforms is from 0.1% of the games, of course they would push for those 0.1% to be banned.
      - multjoy 1y ago
        The payment networks don’t pay for the cost of chargebacks - that’s borne by the merchant or the card issuer, the network makes money either way. This is one of those situations where the optimal level of fraud isn’t zero.
      - leereeves 1y ago
        Who does chargebacks on Steam? They'd lose their whole account.
      - michaelt 1y ago
        Why should that be the case? Do the credit card companies go to Wal-Mart, find all the fraud is people buying cigarettes, spirits and razor blades, and tell Wal-Mart to stop stocking those? Of course they don't.
      - sltkr 1y ago
        Is there any evidence that this is the case, though?
- sltkr 1y ago
  If this was all there was to it, I'd expect a surcharge for risky payments instead.
  - creer 1y ago
    Exactly. And that mechanism is already in place: some payment processors will accept sex industry vendors. They just charge more.
benkel 1y ago
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- quickthrowman 1y ago
  This has absolutely zero effect on Visa and Mastercard, they exist to make money and they’ll process any dollars they can, provided the chargeback and fraud rate is low enough. In the case of porn, it isn’t. They’d probably need to charge merchants 5-10% fees to cover the fraud and chargebacks on porn sites. Again, Visa and MC arent declining on ethical grounds, it’s not profitable for them without gouging merchants on processing fees.
  - wmf 1y ago
    That's a common narrative but how do you explain Steam?
    - quickthrowman 1y ago
      Maybe the chargeback rate on porn games is lower than actual pornography, the credit card statement will just say “Steam” or “Valve” instead of ‘Monthly subscription to kink.com”. Do you really think that Visa and MC are ethical organizations who listen to whiny Christian conservatives about porn? They’re giant money making machines, and porn is legal. If it was profitable, they’d allow it, their shareholders would demand it.
      - wmf 1y ago
        What's your explanation for why Visa/MC specifically demanded incest games to be banned from Steam? They can't even see which games are causing chargebacks.
      - ryoshoe 1y ago
        Their shareholders only demand the price stays up. Headlines claiming Visa and MC are associated with legal but morally controversial material is likely to hurt shares regardless of whether such claims are valid
deleted 1y ago
[deleted]
michaelt 1y ago
There's an unwritten compact between American politicians and American payment providers. The payment providers get to charge a 2% fee on all transactions, without any pesky questions about antitrust law. In exchange, when politicians ask nicely, the payment provider cuts folks Wikileaks, out of the financial system without any pesky questions about the first amendment.
scythe 1y ago
I think the root of the problem is that it's just extremely unpleasant to moderate user-generated adult content. It's already difficult to moderate content on a somewhat serious online forum like Hacker News. Facebook moderators have been in the news and on South Park due to the emotional drain of the task. Who's going to sign up to pore over everyone else's weirdest thoughts given form? Certainly not me. So this results in websites that allow people to upload pornography having lapses of moderation where something bad gets through every now and then. One day some creepy clip goes viral among some social conservatives and they try to make legal threats against the site and anyone they consider "affiliated". This creates problems, credit card companies are very protective of their reputations, and they usually decide the conservatives seem less bad. Then someone sets up a new site that allows user-generated adult content and the cycle repeats.
IshKebab 1y ago
I suspect they really couldn't give a shit either way but porn is not a remotely significant proportion of their profit and it's just easier to cave to the "think of the children" busy bodies. They'd like to keep their sweet gig out of the news as much as possible and standing up to that noise attracts attention for little gain.

The same reason they make it difficult to use credit cards for gambling. Merchants that sell porn, gambling, and other vice have higher rates of fraud. If they allow them to accept credit cards at all, they charge them much higher merchant’s fees to do so.

Insanity 1y ago
Ah, gotcha. That rationale does make some sense then.
- BizarroLand 1y ago
  Well, until you realize that the merchants affected in this specific incidence, itch.io and steam, have had 12 and 21 years respectively of operation without causing issue for online payment systems, indicating that this is a BS excuse.
  - babelfish 1y ago
    If the payment systems find that 90% of the fraud/chargebacks through these platforms is from 0.1% of the games, of course they would push for those 0.1% to be banned.
    - multjoy 1y ago
      The payment networks don’t pay for the cost of chargebacks - that’s borne by the merchant or the card issuer, the network makes money either way. This is one of those situations where the optimal level of fraud isn’t zero.
    - leereeves 1y ago
      Who does chargebacks on Steam? They'd lose their whole account.
    - michaelt 1y ago
      Why should that be the case? Do the credit card companies go to Wal-Mart, find all the fraud is people buying cigarettes, spirits and razor blades, and tell Wal-Mart to stop stocking those? Of course they don't.
    - sltkr 1y ago
      Is there any evidence that this is the case, though?
sltkr 1y ago
If this was all there was to it, I'd expect a surcharge for risky payments instead.
- creer 1y ago
  Exactly. And that mechanism is already in place: some payment processors will accept sex industry vendors. They just charge more.

benkel 1y ago

[dead]

quickthrowman 1y ago
This has absolutely zero effect on Visa and Mastercard, they exist to make money and they’ll process any dollars they can, provided the chargeback and fraud rate is low enough. In the case of porn, it isn’t. They’d probably need to charge merchants 5-10% fees to cover the fraud and chargebacks on porn sites. Again, Visa and MC arent declining on ethical grounds, it’s not profitable for them without gouging merchants on processing fees.
- wmf 1y ago
  That's a common narrative but how do you explain Steam?
  - quickthrowman 1y ago
    Maybe the chargeback rate on porn games is lower than actual pornography, the credit card statement will just say “Steam” or “Valve” instead of ‘Monthly subscription to kink.com”. Do you really think that Visa and MC are ethical organizations who listen to whiny Christian conservatives about porn? They’re giant money making machines, and porn is legal. If it was profitable, they’d allow it, their shareholders would demand it.
    - wmf 1y ago
      What's your explanation for why Visa/MC specifically demanded incest games to be banned from Steam? They can't even see which games are causing chargebacks.
    - ryoshoe 1y ago
      Their shareholders only demand the price stays up. Headlines claiming Visa and MC are associated with legal but morally controversial material is likely to hurt shares regardless of whether such claims are valid

deleted 1y ago

[deleted]

michaelt 1y ago

There's an unwritten compact between American politicians and American payment providers. The payment providers get to charge a 2% fee on all transactions, without any pesky questions about antitrust law. In exchange, when politicians ask nicely, the payment provider cuts folks Wikileaks, out of the financial system without any pesky questions about the first amendment.

scythe 1y ago

I think the root of the problem is that it's just extremely unpleasant to moderate user-generated adult content. It's already difficult to moderate content on a somewhat serious online forum like Hacker News. Facebook moderators have been in the news and on South Park due to the emotional drain of the task. Who's going to sign up to pore over everyone else's weirdest thoughts given form? Certainly not me. So this results in websites that allow people to upload pornography having lapses of moderation where something bad gets through every now and then. One day some creepy clip goes viral among some social conservatives and they try to make legal threats against the site and anyone they consider "affiliated". This creates problems, credit card companies are very protective of their reputations, and they usually decide the conservatives seem less bad. Then someone sets up a new site that allows user-generated adult content and the cycle repeats.

IshKebab 1y ago

I suspect they really couldn't give a shit either way but porn is not a remotely significant proportion of their profit and it's just easier to cave to the "think of the children" busy bodies. They'd like to keep their sweet gig out of the news as much as possible and standing up to that noise attracts attention for little gain.