3 ms·

I guess they reason is that big secure payment processors do not accept adult sites, which leaves them with more 'fishy' options.

by return0 11y ago

jacquesm 11y ago
There are specialty processors that deal with adult sites. The reason is not so much that the other processors would not like to do business with them but that adult sites tend to have higher charge back rates and consumer fraud rates than what the credit card companies will let them get away with (another factor is scams by the adult companies) which qualifies their charges as 'high risk'. Specialty processors take care of the issues in such a way that the risk becomes tolerable. Another reason is pressure from the big card companies not to accept such clients even when the processors would accept them otherwise. Hence the prevalence of adult customers with CCBill, Epoch, VXS and several others.
- Scoundreller 11y ago
  > Specialty processors take care of the issues in such a way that the risk becomes tolerable. So how many times higher a cut do the CCBill, Epochs, VXS and others take compared to... what a retail store would pay?
  - jacquesm 11y ago
    Not all that much once you take into account that 'high risk' merchants will pay more to the credit card companies as well and typically tend to eat quite a bit of their income due to all kinds of fines (charge-backs for instance) which are assigned fairly arbitrarily. Solutions such as VBV and meticulous logging can take care of this but are hard to implement in a bullet proof way to stand up in case of a dispute. The processors do a good job of this and in general are the more solid component of the eco-system. The only time the costs are excessive is when a processor goes belly-up, which has happened twice for a large enough processor that it affected thousands of merchants. Retail stores are at a huge advantage here because they have inherent address verification and a signature upon delivery, whereas most - if not all - adult sites operate entirely in the virtual domain. That does make it much easier for them to absorb the extra costs.
- goatforce5 11y ago
  I worked for a site in the adult space and fighting credit card fraud was a huge problem. A lot of effort was put in to preemptively trying to catch fraud (e.g., when your credit card country doesn't match the IP address and/or the location of the profile you're creating) and refund the charges before it even got to the chargeback stage. Inevitably there would be fraudulent chargebacks against the site when someones partner would read the credit card statement at the end of the month ("No honey, why would I use that site? Our credit card has been hacked!"). There was a team of people who would prepare reports of usage to fax to the banks to challenge the chargebacks. You want someone at a bank to get a faxed copy of naked pics? Upload them to the site and then deny the charges. Easy!

I guess they reason is that big secure payment processors do not accept adult sites, which leaves them with more 'fishy' options.

by return0 11y ago

I guess they reason is that big secure payment processors do not accept adult sites, which leaves them with more 'fishy' options.

jacquesm 11y ago

There are specialty processors that deal with adult sites. The reason is not so much that the other processors would not like to do business with them but that adult sites tend to have higher charge back rates and consumer fraud rates than what the credit card companies will let them get away with (another factor is scams by the adult companies) which qualifies their charges as 'high risk'. Specialty processors take care of the issues in such a way that the risk becomes tolerable. Another reason is pressure from the big card companies not to accept such clients even when the processors would accept them otherwise. Hence the prevalence of adult customers with CCBill, Epoch, VXS and several others.

Scoundreller 11y ago
> Specialty processors take care of the issues in such a way that the risk becomes tolerable. So how many times higher a cut do the CCBill, Epochs, VXS and others take compared to... what a retail store would pay?
- jacquesm 11y ago
  Not all that much once you take into account that 'high risk' merchants will pay more to the credit card companies as well and typically tend to eat quite a bit of their income due to all kinds of fines (charge-backs for instance) which are assigned fairly arbitrarily. Solutions such as VBV and meticulous logging can take care of this but are hard to implement in a bullet proof way to stand up in case of a dispute. The processors do a good job of this and in general are the more solid component of the eco-system. The only time the costs are excessive is when a processor goes belly-up, which has happened twice for a large enough processor that it affected thousands of merchants. Retail stores are at a huge advantage here because they have inherent address verification and a signature upon delivery, whereas most - if not all - adult sites operate entirely in the virtual domain. That does make it much easier for them to absorb the extra costs.
goatforce5 11y ago
I worked for a site in the adult space and fighting credit card fraud was a huge problem. A lot of effort was put in to preemptively trying to catch fraud (e.g., when your credit card country doesn't match the IP address and/or the location of the profile you're creating) and refund the charges before it even got to the chargeback stage. Inevitably there would be fraudulent chargebacks against the site when someones partner would read the credit card statement at the end of the month ("No honey, why would I use that site? Our credit card has been hacked!"). There was a team of people who would prepare reports of usage to fax to the banks to challenge the chargebacks. You want someone at a bank to get a faxed copy of naked pics? Upload them to the site and then deny the charges. Easy!