Since the Credit Card companies & banks create lots of problems as soon as sex is involved (see FetLife's misadventures in HN previous articles for instance) in addition to the big chargebacks issue, and given that customers lie a lot (because they can), I think that the best solution for pornsites would be something similar to prepaid cards used for Google Play, consoles networks and the like.
You buy a card, this puts a limited amount on your "PornPlayButDontSayItIsForThat" account, it's easy to control, anonymous, limits risks even if the account is compromised or the porn site dodgy (hidden automatic renevals & the like) since at most you'd lose that limited amount, then you can buy porn without the issue of the SO (a big problem it seems) and without any banks (or whatever) knowing about your -still badly perceived- habits.
In fact, I'm surprised such a system (not specific to a porn site/network) is not already widely available. Of course, it would not present itself as "the Porn Prepaid Card" because of the stigma... Note that some sites/networks accept gift cards already (I've checked), but it's not very practical (not fine grained, you must use the whole card) and they don't accept ALL cards, what do you do when you're living in France and they only accept American gift cards? You can also buy "tokens" in many sites (especially Webcams) but they still require a CC, so the problem is not solved. A more general "ePurse" system would be better.
This is much more realistic -IMO- than using Bitcoins or the like (too difficult to use and too volatile).
Of course, to REALLY solve the problem you'd "only" need people to stop seeing sex (and porn) as bad, dirty, taboo, etc. But this won't happen anytime soon :-(((
If just 25% of the customers let the subscription run for an average of 1 additional year, you will net 4x more money compared to a site that needs to renew the purchase every month, with zero customer acquisition costs and zero marginal costs for the provider - the content and platform are a sunk cost and traffic charges are negligible. Only now you have 4x more money to produce the content and generally be more competitive, pushing out of the market those who don't adopt the same tricks.
This is what The New York Times and porn sites have in common, and that's why you will see similar dark patterns of making subscription hard to cancel. In the porn's case, it's a much steeper uphill battle to get the money from the customer and his bank (and his wife), so they are forever relegated to the high-chargeback bin and must internalize that into their business model. Which might explain some of the "breakage" the original author is observing.
Companies like Stripe could easily say: Yes, we do accept payments for adult sites, but 3D Secure will be enabled on all purchases. I don't think that would scare of more customer than bouncing them between multiple payment provides and seeing the their payment reject multiple times.
This is why few Adult companies have setup Verified by Visa or 3-D Secure (though as I noted elsewhere, 3-D Secure rarely actually works) for verifying cards before charging the transaction. This is why Adult companies in the UK started scrambling when they passed legislation requiring driver's license verification. This is why no prepaid adult content card -- and there have been numerous, including one promoted by Howard Stern -- has ever really caught on. Any extra step required to pay for a site increases the percentage of people that just click off to somewhere else. Luring those people to your site in the first place is expensive, involving all sorts of advertising and affiliate deals, so anything that reduces the conversion ratio is a deal breaker.
The form says "To subscribe, remit $25 to account 12345678, and paste the transaction ID into this field." The merchant could then verify that the transaction ID matched up with a payment he received and complete the sale.
With a standardized microformat for the payment data, this could probably all be detectable and streamlined into browser plugins or apps-- you'd just see a button that redirects you to log into your bank's site with the transfer details prewired.
I figure this has plenty of benefits:
* The only remotely sensitive data you pass to the merchant is a transaction ID. You'd probably be able to actually do the sale without SSL, but certainly without most of the PCI compliance hassle.
* The merchant can't use the info you provided to enable an unexpected second charge or subscription.
* The bank can choose to make their process for executing the push transactions as "easy" or as "secure" as they (or the users) want. The merchant doesn't have to know, care, or worse, spend money to retool their site to support changes.
In a way, PayPal's flow is sort of push-oriented, but it's ugly in a lot of ways.
One of the possible issues here is that some of these cards, specially anonymous ones, may take time to validate. Users may not want to wait 24hrs+ for their digital content to arrive.
This should be a solvable problem, though.
It won't, since it is not universally true, that seeing porn is not bad. There are thousands of personal accounts, or even a whole communities of people, who are trying to get rid of porn watching due to damage it brought to their lives.
E.g. I watch porn and I don't need their efforts on liberating me from it, thank you.
There are cultures out there where men were nothing more than a stick around their penis. I would personally not be comfortable with that, but presumably the people born in those cultures are.
Or for a better example of a perfectly above-board and healthy activity enjoyed by huge numbers of people that can become addictive and "a problem" - how about gaming?
(I'm not trying to belittle your point or resort to "whataboutism" here, just pointing out some examples from other industries).
The problem with porn is that it's sex and sex is dirty and bad and you should feel ashamed for having anything to do with it. /s
"Joe" would have a happier life if he and his wife were open about how much money they were each spending on porn. They might learn something about each other. Hiding it in layers of shell billing companies isn't just ridiculous at the technical level described here, it's unhealthy.
Also needs to be noted that —as others have said— card processing companies need to get the hell out of the way and just deal with money at a fair risk level. Adult entertainment is higher risk than a card-present or delivered transaction, but absolutely no worse than your Netflix subscription. Considerably less risky than the in-app junk that Adyen happily underwrites ("My toddler bought this without my permission, waaa").
I would also point out Adult CNP is far from the only category to get this treatment, but they are one of the only high risk categories that have four major banks more than happy to take their business. Travel sites, dating sites, and other high risk CNP merchants don’t have the same benefit.
The techniques described in this article are exactly why issuers block transactions. Merchants are trying to force transactions that are likely to be charged back by engaging in increasingly elaborate, and likely illegal, schemes.
If you’re operating a legitimate adult CNP site, there are plenty of options available to you and the adult-focused processors will hold your hand through rejecting sketchy charges even if it means lower up front revenues.
I have seen bad actors open up fake porn sites to obtain processing for their illegal activities because adult processing for legitimate sites is that available.
Edit:typos
Risk from transactions: stolen credit cards get default checked on adult sites (digital good delivery instantly verifies if the card is still useable).
Bad faith merchants. This goes from outright scams to the still widely used practice of "card banging", when they tack on added services or hit you with a huge fee after your free trial ends (which is not presented to the customer).
Affiliates screwing sites, sites screwing affiliates.
Billing support building more and more barriers for customers to get a hold of them or to cancel subscriptions.
And then let's not even get into the industry's backbone, content producers...
"Adult merchants are more likely to have chargebacks" is akin to saying "Blacks are more likely to commit violent crimes". In terms of overall statistics, it's factually true, but there's still something reprehensible about judging individuals this way.
When I was at kink.com (10 years ago), our chargeback rate was tiny - lower than most online businesses, and nowhere near yellow flag territory. Yet despite our long history of good citizenship, we were still lumped into the high-risk category. Visa rules only allow banks to process a certain percentage of their volume as "high-risk", so getting merchant accounts which could handle our payment volume was a major challenge.
We have the tools to judge individuals and businesses by actions, not as members of arbitrary groups. Sure some businesses may deserve some initial extra scrutiny, but at some point your history should speak for itself.
Sorry, but [citation needed]. I don't agree with your assertion. I've seen horrible chargeback rates in apps and non-adult VoD. As high as 4.something percent at one point for one developer. The problem: kids. The lack of control over the payment process was killing him.
And that's the thing, it's not 1999 any more. You can improve chargeback rates by collecting more data, forcing 3DS, forcing AVS, SMS verification, doing statement charge verification (old school), fingerprinting every authenticated transaction. If my business and my processor's continued business depends on it, I can get beyond reasonable doubt and prove it's you making a transaction. That means a lot more drop-off (AVS alone can be 5%) but chargebacks past that are either your fault or stupidly simple to refute with evidence.
But many processors are still just unwilling.
The only way things become more reasonable is that we stop forcing otherwise legitimate adult content sites into the arms of companies that coast along on decades-old tech, making the good actors pay to offset the bad actors' actions.
Until then, when we can have mainstream processors allay risk fairly, putting a spur-of-the-moment sub-$1 micro-transaction through isn't viable and that's where porn's going to explode.
If you have a suggestion for teaching someone how to get crypto in the US and send it to an adult site with less steps than it takes to use a visa/mc and without the end user needing to give up more PII(?) (personally identifying info) to more people (than you would by simply using a visa prepaid card with a single merchant) - then I would really like to know about such a guide.
Sure I looked at ads, but I never used any except an accidental click.
This is borderline a free/voluntary to create content with almost no barrier to entry. Hosting it is the only cost IMO, and that sound expensive.
But porn doesn't have high margins. No one (except the large distributors like Mindgeek - Pornhub, Redtube, YouPorn) is making much money. Especially these small sites that are being built. After you subtract legal, production, performer fees you're left with almost nothing.
I worked in the Adult Industry for several years, but building tech for the industry wasn't financially stable for me so I had to leave. Still really passionate about the sex worker community though. Porn performers/activists are the kindest, sweetest, most intelligent group of folks I've ever worked with.
Maybe we can start a small group of engineers who want to discuss working through some solutions together. My email is hello@marik.io if anyone is interested.
In what form exactly hasn't the industry been "financially stable" for you and why? As a contractor? As an employee?
Many adult services providers are burning through hundreds of merchant accounts, getting them closed/actioned, and repeating as long as they aren't prosecuted. The moment they have to deal with any criminal prosecution, however, there are going to be a lot of problems now that the feds have learned to prosecute this as money laundering.
EDIT: Holy shit, the author cops to being an accomplice to wire fraud in the comments: https://i.imgur.com/S5UWBZZ.jpg. He needs to take this post down immediately. This is why programmers need to learn about the world before they do things to it.
"the concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses"
Illegally obtained money being they key term!
> literally what the feds took down Backpage for recently.
Also, incorrect. Backpage was taken down because they facilitated human trafficking https://www.google.com/amp/s/amp.usatoday.com/amp/501214002
This was, in fact, one of the actual mechanisms brought to bear against Backpage. Certainly the indictment was motivated by, you know, underage sex trafficking, but the enforcement mechanism used to achieve a verdict was mostly money laundering. You can read the indictment yourself: https://www.justice.gov/file/1050276/download. How many counts of trafficking vs money laundering do you see?
And finally, no, they are not "selling different content through other processors." These processors' entire business model is to create "legitimate," totally unrelated transactions to the credit card authorities, to take a cut, and pass back the funds to the merchant. I believe Backpage was instructing people trying to purchase ad inventory to go to a portal to purchase dog food for a while.
Although at this point we're just arguing semantics.
I can see how it's against the rules of the payment provider but this wouldn't be fraud would it?
In a hypothetical scenario where I saw this occurring, I would look for emails, texts, etc where you admit that you actually intend to sell memberships, and the T-shirt sales are merely to obtain payment processing services to get the fraud charges up.
Then I’d rack up the dollar amounts against you under money laundering statutes and stack them so you’d be looking at some pretty major prison time.
All this over selling some T-shirts to get a payment processor for your adult site? You bet! I’m working on very similar cases now.
Can you not determine who the author is? Based on clues like the author's name in the article heading, and the comment poster's name being different? And the author posting a reply to the circled comment you posted indicating that this approach does happen, but is sketchy... seems to point to a reading comprehension problem here.
The intention here is to circumvent the high chargeback rate of porn by disguising the purchase from the customer's bank, thus making it harder for him to issue the chargeback for an amount you have legally charged. That does not sound like an illegal action, but a breach of contract with the payment processor.
My fiance was upset at this news, to this day she is sad about it: https://www.theguardian.com/culture/2017/jan/25/porn-bdsm-ki...
(I'm not really into it, but I fully believe in to each their own!)
I wasn't really into it that much either to be honest. It was fun and novel and I got to learn a lot, but I'm like you, to each their own. =)
Edit: It is always funny how when you claim that people are biased and don't have arguments on Hacker News, they downvote you. People really can't get out of their heads. My point still stands. Good programmers doesn't have to go into controversial industries. They don't need excuses to justify how things "actually really are". The article says that the porn industry is "leading" in technology. That is bullshit. They might be leading in commercialization of certain technologies for a brief second, but that is all. How many programming languages did they invent? Zero.
Don't go into mediocre industry where people accept problems as a feature. All the people around will be there because they don't care about certain things and so won't you. You might not like it, that is up to you, but don't come complaining when you can't find a job after 40 because you haven't developed the skills companies are looking for at that age. Like identifying, solving and taking responsibility for larger problems.
People don't have to be ashamed of it in the sense that they didn't choose to get so damaged to be attracted by it, but abuse and it's consequences is a major elephant on the couch of the porn industry, and I also don't feel a shred of shame for not lumping it all together into one giant bag of "it's all fine", just like I can't lump it together as being all bad.
To each his own also means that I see what I see, and judge it as I judge it.
This was a really bad example, as Stripe actually charges more than 30 cents for a $1 charge ;P. More reasonable companies (including PayPal) give you better rates for small receipts; PayPal offers 5%+$0.05 as a "micropayment rate". But yeah: with a better example, this is still clearly a point ;P.
Would be nicer if paypal just ... adjusted your charges. I used paypal in a situation where some charges would be ~$5, and some would be $50+. The 5% rate applied to a $60 charge was comparatively crazy. I ended up creating 2 paypal accounts, and routed $5 charges to the 'micropayment' account, and others to the regular once. It was against paypal terms of service, technically, but... was also annoying. I was doing enough transactions that the 2% spread was... well... I wasn't raking in millions, but the 2-3k I did some months meant a difference of $50/month or so.
Like the video chat company that I worked for was called Telecom. Their website said nothing about this, all general words about what a good company they are with happy employees and nothing specific. Put it on my CV with no issues.
Then they have an affiliate website where everything was happening. All charges were direct through this Telecom company. If someone asked about the billing they probably answered something about a phone, extra charges etc.
> To those of you spreading the "you're admitting to fraud" comments, you're the reason we can't have nice things.
I fail to see how this forced you to remove the post.
- fast enough. 15 minutes to validate a transaction is sufficient for a porn site.
- as certain as wiring money. There's no chance a customer can force money back from you once paid.
- anonymous. Your wife won't find out in a bank statement, so less chance of "fake-angry" customers trying to force money back.
- The money goes directly to the content creators. No need for sketchy middleman services.
The disadvantage is that most people don't know how to use crypto. Therefore, laymen-friendly online wallets are the solution that basically baby users into uploading cash, clicking a big "send" button, and copy-pasting a wallet ID. I have not seen an online wallet simple enough for the average computer to use, but it's close.
A quick Google search shows a few sites that accept Bitcoin, but they probably make up less than 0.1% of the market. Why don't major sites use cryptocurrencies at least as an alternative option? It seems like a quick and easy 100%-commission payment method to me for the customers that are capable of it.
Right, she'll think you're buying drugs instead when she sees the charge for cryptocurrency.
There's a thing called 0-conf where you accept a transaction even before it's included in a block. This is used by BitPay, the worlds largest Bitcoin payment processor, to accept Bitcoin Cash in just a couple of seconds.
It's safe enough (there's always a risk/reward trade-off) for smaller purchases if you just use a few simple heuristics like requiring a sane fee and checking for double spend attempts for a couple of seconds.
And what happens in that 15 minutes? Does the user have access to the site in that time? If so, what happens when the transaction doesn't validate? Just lock out their access? Ok. You can download quite a bit in 15 minutes. And then you can just run another fraudulent transaction to regain access.
> - as certain as wiring money. There's no chance a customer can force money back from you once paid.
Which is great for actual fraud. Especially when you make it super easy to do. Like buying coins online and clicking a button.
You do realize the issue is that neither side of a payment fully trusts the other, right? We can't just pass the ball to whichever side when it's most convenient. Cash works because it's in person. You see me, I see you. I hand you cash, you hand me a product/perform a service.
> anonymous
Bitcoin is not anonymous. It's at best pseudonymous. Not to mention, if the bitcoin can reach you, you are reachable. It can be made difficult, but no matter what there has to be a path back to you in order for you to receive the coins.
And you are ignoring that crypto is incredibly volatile. I think bitcoin went from near $20,000 to $6000 in this year alone. Imagine losing 70% of your value just because. That that $5 you collected from Joe Shmoe in January became $1.50. It's why a lot of businesses started backing off of it. It's just too volatile to be used as a currency. And let's not pretend that there's any other crypto worth talking about other than bitcoin. Ethereum, Litecoin, BCH, etc all follow bitcoin.
To expand on this, it's hard to turn crypto into rent. You mentioned the friendly online wallets - they're almost a necessity if you want to accept bitcoin, and then turn it into fiat currency.
The idea of directly paying content producers is great (mumble mumble some middlemen do add value), but it doesn't do them much good if they can't buy a gallon of milk or a pair of shoes.
This is the problem with permissioned transactions which cryptocurrencies remove. The only thing missing is adoption.
With the fees and issues I don't understand why the porn business isn't pushing harder for cryptocurrency use on their sites. There's huge amount of money to be saved here.
https://web.archive.org/web/20180809104802/https://dev.to/jw...
Quite often, the AVN Expo had better actual technical content than CES (which was held at the same time).
The porn industry was the first to adopt videodiscs, VHS, DVD, handheld cameras, the web, online payments, etc. Basically, if any new technology was useful for porn, it was going to catch on.
The "tube" sites are more exploitative than the rest of the industry in that they don't actually pay the performers, they're simply piracy, and because small independent producers don't have the political leverage to impose an equivalent of content-ID on them they stay that way.
You build a gigantic audience on pirated content, then once you are many people's go-to destination for porn, you can allow the big companies to have official partnerships.
They are kind of stuck with that partnership because of the size of the Tube sites audience, which they built illegally. They also CONTINUE to post pirated content everyday, which sustains that audience and prevents those companies from just making their own TUBE site. But because the pirated content posted today will be from users, and the TUBE site will eventually take it down, the TUBE company is not a bad actor in this situation.
At the end of the day, I can still watch the newest Netflix Standup special I've been waiting for, for free on Youtube. And I'll still catch the new Adult Avenger's Parody on another TUBE site for free, without the consent of the companies that paid to create those films.
I may have missed the boat as this is what can be seen on the original post:
"I've deleted the post because some of you are [insert expletive]. The client I do work for is not doing anything illegal. There's no money laundering going on. It's a more legit business than some big-chain stores I shop at."
Anybody care to provide a gist of what was originally posted? Tried cached version [1] but contents are still the same.
[1 https://webcache.googleusercontent.com/search?q=cache:qqZZR3... [2] https://archive.is/mP6Ky
- Would ACH solve an issue like this? There are some clean interfaces (e.g. Plaid), and chargebacks are not trivial.
- Would 3-D secure solve the chargeback problem? As I understand it, it shifts liability to the consumer, not the business.
- Is blockchain being adopted anywhere for micropayments like this?
Still doesn't solve the problem of people with shared accounts and then one half pays for porn without telling the other. It happens so often UK banks have ways of looking up subscriptions.
People would reverse the transaction, still enjoy porn and the company goes out of business.
> Would 3-D secure solve the chargeback problem?
As far as I know, that's a European only thing? It shifts it to the consumer, but people get very angry on the phone to the bank causing a higher chargeback rate.
The problem we ran into was that since the 3-D Secure verification (which is a page you redirect the surfer to, or an iframe or similar) is handled by the credit card issuing bank, each page is different, and since no one actually uses 3-D Secure, when we tried to implement it, it mostly didn't work.
Reducing chargebacks is great, but if you lose 30% of your sales by redirecting them to broken pages, it defeats the purpose.
Also I don't believe chargeback on a 3D Secured transaction doesn't count as a strike towards the seller, not to sure about that one though. It would seem reasonable not to count it, seeing as the seller was in good faith, and the card company claims to have verified the buyer... but the rules of online credit card payment are anything but fair.
These aren't really micropayments, just regular small payments. Cheap cryptocurrencies like Bitcoin Cash work well for these amounts.
As a bonus you can stay private enough from your spouse and the chargeback issue basically goes away from the business side.
Though similar problems exist in business for things like weed companies. Banks don't want to touch em.
There's no way to ascertain how much profit a payment provider makes based on the transaction cost. That 30% fee might be necessary in order to make a profit after covering all the expenses incurred by dealing with vast amounts of fraudulent transactions, chargebacks, lawyers, etc. Maybe Stripe aren't giving up a lot of money; maybe providing payment services to the adult entertainment industry is just really expensive per transaction.
Stripe would have to setup an entirely separate legal entity to do this. Otherwise they would risk not being able to process ANY card transaction, because the porn sites have to many chargebacks. It would potentially be a risk to their primary business.
I think Stripe is "giving up" on the money for the same reason many others are: It's simply not worth the hassle. If you have a nice income doing payments for non-adult sites, why bother?
We had to do all of our own bare metal hosting cause at the time cloud companies wouldn't touch us.
What we ended up developing was our own micro currency 'kinks', which enabled a lot of other possibilities for us, like pay-per-minute video. Charge one larger purchase for something tangible and it helped prevent chargebacks.
We were also one of the first companies to do near realtime, live streaming 1080p HD video. I remember having to search around for an HD mixer cause nothing existed yet.
If they're doing legal business, why should they?
That is, to simplify the process of doing business.
(I don't understand what other meaning you'd get from the other post)
