Payment processors as gatekeepers is absurd, even worse the entire system is completely opaque.
A local company who makes swords (very nice ones) ran into an issue where they couldn't take credit cards. No warning, they weren't even told, they were just added to a list and couldn't take payment. https://www.youtube.com/watch?v=nLIcohyT5Dc
They still haven't completely resolved the issue / don't know how they ended up on a bad list.
The idea that someone somewhere else complains inside an opaque system, and your ability to do business ends without warning is absurd. You can't appeal, you can't talk to anyone, you're just hosed. In some cases you AREN'T EVEN TOLD what is going on.
> Payment processors as gatekeepers is absurd, even worse the entire system is completely opaque.
Yes... but if payment processors are going to be charged in criminal cases that involve the use of their systems for purchasing things that are illegal, then they have an interest in not being in that situation.
> Jan 24 (Reuters) - Mastercard and Visa failed to stop their payment networks from laundering proceeds from child sexual abuse material and sex trafficking on the popular website OnlyFans, according to allegations in a previously undisclosed whistleblower complaint filed with the U.S. Treasury’s financial crimes unit.
> The whistleblower, a senior compliance expert in the credit card and banking industries, said the two giant card companies knew their networks were being used to pay for illegal content on the porn-driven site since at least 2021, and accused them of “turning a blind eye to flows of illicit revenue.”
> On Friday, July 29, a federal court issued a decision in ongoing litigation involving MindGeek, the owner of Pornhub and other websites. In this pre-trial decision, the court denied Visa’s motion to be removed from the case on a theory that Visa was complicit in MindGeek’s actions because Visa payment cards were used to pay for advertising on MindGeek sites, among other claims. We strongly disagree with this decision and are confident in our position.
Given this, it is a completely reasonable position for payment processors to decide not to touch anything that they can be brought into legal liability.
They'd likely prefer not being gatekeepers of money, but if they're going to be brought into a court and sued each time someone uses them to purchase something that may be illegal, they're going to take steps to not be brought into court.
The fundamental issue is the existence of an iron clad monopoly of 2 payment providers.
It’s a choke point on the entire economy for any sufficiently motivated interest group that wants to ban something that would otherwise be legal…lobbying a few executives at Visa/Mastercard to shut off the taps is much easier than lobbying government to pass a law.
With no mandated open protocol for (legal) payments or legal protections like the internet has, this will continue to be a problem and will only get worse.
Ultimately I think digital payments should be facilitated on government rails just like cash is. Where any decision to block a payment should be determined by law, and require actual skin in the game from elected representatives who are fireable by their constituents.
I have had running ideas for creating a credit card company for about a year now. It's an idea my head keeps wandering back into. The system is so ripe for disruption.
But the start-up costs are mind-bogglingly insane, and the organizations best equipped to help you with capital and/or navigation are the very organizations you would be rug pulling in some way or another.
Is it? Assuming nobody opposed you, you'd need to convince merchants to have a different payment terminal and train staff on it. You'd need to convince POS providers to provide an integration. You'd need to convince banks to allow your card to be accessible in their systems (or find an alternative way for your customers to pay their card). Once this is done you have to convince people to become your customers for a card that only works in some scenarios.
Assuming absolutely everyone felt neutral about this, what's the incentive for any of the above parties to say yes? For everyone involved it seems to be a lot of work for little benefit.
They haven’t been deputized, in fact the opposite.
When they block a payment it’s typically due to some interest group threatening bad PR hit pieces on them.
If you’re running a duopoly money printer, the worst thing that can happen is to have people realizing it and talking about it.
Hence why you’ll never hear an ad from Mastercard or Visa touting the dominance of their payment networks or even trying to sell you their products. It’s always brand-washing PR fluff about saving whales or Olympic ice skaters.
For the average person wont this just change to the leading custodians having the near monopoly similar to the exchanges or how credit card providers were before becoming what we have today?
It sounds like the payment processors aren't well-equipped to know what item counts as illegal content or not, and that relying on the reckons of some evangelical activist group with a history of homophobia is predictably terrible option.
I suppose other than the expensive and years-long task of developing significant domain expertise themselves, payment processors would probably like instead to defer their decisions to some other legal entity, perhaps some kind of government-funded organisation.
With the surge in anti-gay 'groomer' conspiracy theories now retargeted towards trans people comprising much of the electoral campaign of the incumbent president, it is hard to imagine a less appropriate climate for a US government to create anything to fill that gap.
> “If Visa was aware that there was a substantial amount of child porn on MindGeek’s sites, which the Court must accept as true at this stage of the proceedings, then it was aware that it was processing the monetization of child porn, moving money from advertisers to MindGeek for advertisements playing alongside child porn like Plaintiff’s videos,” Judge Carney wrote.
> Judge Carney: “When the Court couples MindGeek’s expansive content removal with allegations that former MindGeek employees have reported a general anxiety at the company that Visa might pull the plug, it does not strike the Court as fatally speculative to say that Visa — with knowledge of what was being monetized and authority to withhold the means of monetization — bears direct responsibility (along with MindGeek) for MindGeek’s monetization of child porn, and in turn the monetization of Plaintiff’s videos.”
Part of the issue is that Steam wasn't properly enforcing rule 6.
6. Content that violates the laws of any jurisdiction in which it will be available.
Some of that content was violating the laws for what was available in Australia.
And since they weren't doing that, the payment processors were getting pressure and in turn putting pressure on Steam.
So now we've got rule 15.
15. Content that may violate the rules and standards set forth by Steam’s payment processors and related card networks and banks, or internet network providers. In particular, certain kinds of adult only content.
Then it should have only been removed from the Australian storefront, rather than the payment processors forcing its removal worldwide. The payment processors shouldn't have been involved at all.
Wherever a good or service is legal, a global duopoly of payment processors should be forced to process payments for it.
Yes. The article does quote the complainants saying that they tried contacting steam and only after getting no response for months contacted the payment providers. Steam could have delisted in Austria but didn't.
So why wouldn't the Australian government go after Steam? If you're a legitimate company legally operating in a locale, then it would be reasonable to assume they are following the law if the local authorities are not taking action.
That should be the responsibility of the storefront, and there should be publicly actionable ways to force them to comply. Payment processors reaching extra judiciary agreements is not the way to go.
"If Visa was aware that there was a substantial amount of child porn on MindGeek’s sites,"
It would be reasonable for anyone to believe that a registered business that is a major operator is following the law. If they are not, then why hadn't the government intervened? As a user when you go to pornhub or any other site with the legal footnote about age, you have the reasonable expectation that you aren't going to get child porn.
"substantial" is doing a massive heavy lifting here as well. I don't really buy that somehow Pornhub has more CSAM than Youtube, Facebook, or Twitter. They were targeted for ideaological reasons.
Was anyone ever arguing that child porn is not illegal? And from the Judge's statement, Visa and Mastercard were aware it was there and also aware it was illegal
So.. what are you even trying to say here?
Make an argument, don't just blindly post paragraphs like that is supposed to discredit what I'm saying
And just to clarify for certain: what I am saying is that when Visa and MasterCard became aware of the child porn they should have taken action at that time
Anytime that someone is going to get sued for monetizing something that is illegal somewhere, the payment processor is likely to get pulled in also as part of the lawsuit. It's been shown that the payment processor can't say "we just move money from one customer to another" and absolve themselves of liability in the court case.
While some of that content may be legal in the US, it isn't everywhere else in the world. As such, they're going to be in the situation of Collective Shout saying "when we sue {company} for hosting that content, we're going to sue you too for allowing {company} to monetize it through your system."
Payment processors have lost that court case before and are likely rather risk adverse to be brought into another one.
Yes. Like any other lawsuit. They try to sue anyone tangentially related to the case. That is more a quirk/issue with the American legal system more than anything.
>While some of that content may be legal in the US, it isn't everywhere else in the world.
Okay, then they deal with it in the other parts of the world. We wouldn't have much of the internet available if companies had to comply worldwide with every local law.
But why should the payment processors be in court? They are just a 'road for money'. Normal roads nor toll road operators aren't going to be charged with a felony if a criminal uses their roads, why should that be different for payments processors?
Reply to self: One reason is of course they get paid per transaction, so if a criminal transaction takes place on their service, they make money off criminal activity.
Well, then stop doing those transactions in <country>, not globally. Why am I not allowed to buy something just because some organization in <country> threatens lawsuits there or whatever?
In other cases multi-nationals (e.g. AWS) are perfectly willing to claim that they're operating a local company under local laws and you can totally trust them to protect local customers from extraterritorial government reach.
Additionally, if this were only about legal risk to the payment processors themselves there would be no reason for them to demand that those games are delisted. They'd only have to refuse supporting the transaction. The game stores could continue to list them and require different payment methods.
(note, that changes when the payment process has been legally made aware, with acknowledgement, of a specific seller being in violation of the law, and the payment processor continues to facilitate sales for that seller. But that's not the case. The products sold are "morally reprehensible" but not explicitly legal)
Yeah but here's the thing though: if the "games" in question are considered illegal in Australia, then if Steam was already trivially demonstrably breaking Australian law by selling them in the Australian market and could have been taken to court.
That is not what happened here. Instead an Australian group demanded Australian law be applied globally, and now you can fuck right off and maybe learn about the fact that an entire planet exists outside of where you live, with not just wildly different laws, but also wildly different attitudes towards what is considered real or not.
Yes, Steam should have followed Australian law (it was even part of their pre-existing rules that were being poorly enforced).
The Australian group said to Visa and Mastercard "people have taken your merchants to court before, and you weren't able to get out of those cases. We're going to take Visa and Mastercard to court for Australian law infractions, and you're going to be part of the defendants, again."
Visa and Mastercard then put pressure on Steam and Itch to remove anything that might bring Visa or Mastercard into court too, and if Steam and Itch didn't, they would drop them as merchants.
From the article:
> “We raised our objection to rape and incest games on Steam for months, and they ignored us for months,” reads a blog post from Collective Shout. “We approached payment processors because Steam did not respond to us.”
Payment processors do not want a repeat of what happened before...
> On Friday, July 29, a federal court issued a decision in ongoing litigation involving MindGeek, the owner of Pornhub and other websites. In this pre-trial decision, the court denied Visa’s motion to be removed from the case on a theory that Visa was complicit in MindGeek’s actions because Visa payment cards were used to pay for advertising on MindGeek sites, among other claims. We strongly disagree with this decision and are confident in our position.
I've seen this happen to a lot of businesses around all kinds of arms, even if not directly selling weapons, but doing training, etc. I've also seen social media figures who are prominently politically oriented face similar issues with donation platforms due to pressure from payment processors/cc companies.
It's really icky to say the least. There's plenty of groups I'd love to see debanked on a personal level... that said, I think it's entirely wrong for anyone not breaking domestic laws where they are.
Becuase guns have higher protections, more stringent seller regulations, and advocacy groups. In some localities, things like swords can be illegal to own. The dealers generally don't need a special license. With guns, you have an FFL which is heavily regulated. So as a payment processor, there's a greater chance that a merchant selling a sword might be violating the law than an FFL selling a gun. Then the advocacy groups for guns are much more active than the ones for knives and swords.
you could have just said advocacy groups and be done with it. That's all that matters, someone who can yell loudly when they try to ban something. There's regulations and protections around an 18+ anything as well.
> Payment processors as gatekeepers is absurd, even worse the entire system is completely opaque.
This is what the end-game of unspooling government functions into the private sector looks like. The decision still has to be made, but rather than petitioning representatives to arrive at a democratic solution, we have to appeal to corporations and fight public opinion turf wars where optics and boycott pressure are the levers of change for our collective rights.
Not quite, the payment processor monopoly is maintained in part due to regulation, so the government has a hand in this private-public scheme, and this would not happen if there were competition, which is why porn sites and such often accept crypto now.
> rather than petitioning representatives to arrive at a democratic solution, we have to appeal to corporations and fight public opinion turf wars
This sums up my experience with my representatives in recent years. You only get a meeting with my reps if you're a large donor or you cause enough public outrage.
Otherwise they feel no obligation to their constituents and hope that the automated form letter (in varying font sizes and colors between paragraphs) they send you in response is enough to appease you.
Well, not really. Right now we're making two separate decisions. One for what is legal to sell, and one for what you can meaningfully sell. Those shouldn't be different, so the latter decision shouldn't be happening.
Paypal blocked our entire account because we sold a product called "La Aroma De Cuba", a cigar manufactured in nicaragua. No discussion would resolve it. We regexed the product name on the payload to replace it with LADC and we were reinstated.
I had a similar experience with a payment processor for a client that sold manufacturing accessories for a completely benign industry - but one morning they were suddenly cut off and forbidden from processing all transactions. The payment gateway would not tell us why, just that the account was permanently suspended for “service violations”.
We had to quickly onboard them onto a new gateway, and while testing in their sandbox environment a rep saw the issue. Turned out one of their products ended up with an auto-generated part code that had the four-letter term for sexual assault in it. That was it.
You'd think we'd be passsed basic word filters for major industries like this. I guess all grapevines (and wineries, by extension) are screwed as well.
And people wonder why many are anxious about AI. Garbage in, garbage out. Automating the process amplifies that.
Is there any chance that "La aroma de Cuba" brand is associated to tobacco, while LDAC sounds more like a sound codec? Tobacco might be the issue in that case.
I am in no way implying there is no Cuban embargo, nor Cuban censorship.
By the way, why is the name "La aroma de Cuba" and not "El aroma de Cuba"?
actually it's a huge issue. we had to use a non-good tech stack credit card provider that constantly went down becuase they were the only ones who would take us because we sold tobacco. No braintree or auth.net just some janky stuff from the 90s because that was the only company that fit our risk profile.
The amount of times we got paged because we coudlnt take cards was ridiculous, because we couldn't ever do anything about it.
Having gatekeepers isn’t so much the problem — there’s stuff almost everyone agrees should be gatekept (and other things that maybe should be even when not everyone agrees).
The problem is that we build these systems where no one seems to want to or have incentive to thin about responsible administration, reasonable feedback, appeal, and accountability. Everybody who can just gets lawyers that work to insulate themselves, sometimes because they don’t give a damn and sometimes because that’s what the incentives of exposure sometimes abused are.
I prefer to pay in cash when I can do so. I think payment by cash and by barter will be better, in situations where that works.
However, for computer payment, I had another idea is to make a "computer payment file" that contains the order division and payment division, and with encryption and signature, and send that to them. You will first receive the file telling what payments are acceptable and can use that to make the file to send to them. Stallman mentioned the possibility of payment by cash by pay phones (or with a prepaid phone card), so that might be one way to do it, too; after you figure out the price, you can receive the payment code and include that in the payment file. Other methods of payment would be possible (e.g. store credit), so the payment file can work independently of what kind of payment.
most commerce sites allow you to buy a product and ship it to a different address than the billing. it's an ok way to buy stuff if they agree to barter.
One problem with bitcoin is requiring too much energy use, but anyways it is independent from the "computer payment file" which can be used with multiple methods of payment. (Computer payment file is also intended to solve some other problems involved with computer payment, including various types of cheating that the merchant might do.)
It's an unfortunate mathematical requirement to create trust in a hostile/trustless reality. Just like how it's inefficient but necessary to spend money on defense in a world with potentially hostile foreign powers, we need to spend energy to ensure no parties can compromise the blockchain. There's no way around it (no, PoS is flawed).
It is easy to save energy when you are OK with a lower level of decentralization. I could probably run a payment processor on my computer alone that handles 100k transactions per second.
I happen to know a guy who has invested a lot in solar parks. He’s deeply unhappy about that investment because the electricity prices are often zero or negative when the sun is up and he’s underwater on that investment.
I also know a guy who recently installed a dummy load in a thermal power plant which they switch on when they can’t give the power to the network due to overcapacity, as they can’t just switch off the plant willy nilly.
The point is, in a grid with lots of renewables in it not only there’s a lot of stray energy that can be captured, but a flexible load that can be switched on/off in milliseconds is actually hugely valuable if we’re to have stable grids.
On top of that, how many people die each year due to the American War Machine that can only exist due to the US Dollar and the Fed's ability to print money and pass off the debt to the future generations?
Lightning channels are centralized entities with their own fee structures
They can be opened peer to peer, or hop between other channels, similar to dns routing
They are prefunded with a certain quantity of bitcoin that dictates the size of bitcoin that can move in that route at once - although smaller denominations can go through in rapid succession this just means more fees levied
All of this incentivizes a larger channel to be created by a well funded party, which can be coaxed into censoring transactions because they are a payment processor or institutional service. Likely an incumbent such as Visa joining the lightning network as a victim of LN’s own success.
There are some mitigations built in and actively developed. We are 8 years deep into Lightning.
The difference is that becoming a larger channel is not gatekept by regulation, and not at all necessary. Creating small channels between two parties, e.g. for subscriptions, is viable. Though not as convenient, it is at least more convenient than getting blacklisted by Visa.
Right, yeah, but isn’t the network large enough by now where a transaction would be routed around the censoring nodes regardless? Much like how there are censoring miners on the mainnet, but the censored transactions still go through due to not everyone doing the censoring?
Yes, they can route around. I think the number of people needing to open channels to deal with this, undermines the utility and scaling point of the Lightning network if it ever takes off. L1 will be so bogged down with channels opening and closing.
Sure, but it also brings a whole lot of other problems along with it. Personally, cryptocurrencies are a nonstarter for me because of them, but if it's an acceptable solution for others, then more power to them.
"The moral of the story is: if you’re against witch-hunts, and you promise to found your own little utopian community where witch-hunts will never happen, your new society will end up consisting of approximately three principled civil libertarians and seven zillion witches. It will be a terrible place to live even if witch-hunts are genuinely wrong." - Scott Alexander [0]
I don't have an answer on how to address that, though. You need to have a very strong stance early on to prevent witchery so your communtiy adjusts accordingly. But decentralization, by its nature, has no way to moderate behavior outside of the core design of the tech.
Banking is sadly one of those few aspects where you need some centralization, in my eyes. That's why finance is regulated the hardest in any given society. You need trust above all else to keep and use a digital currency.
The trade-off is different, sure. Much like the trade-offs between using a gasoline vs an electric car are different. But it doesn’t mean it’s not a solution to sidestep private corporations needing to serve as global content gatekeepers.
For a class of non technical people having the bank or credit card company in this case help them reverse charges when they’ve been scammed, and they are at risk of being scammed for a significant chunk of their resources.
I get why crypto enthusiasts like the irreversibility but the inability to understand why someone would want a protected system with an arbiter over it feels like the same energy I get from engineers who can’t fathom why anyone would choose the walled garden that comes with Apple products despite ample evidence for their popularity with the average joe
You could reimplement the traditional censorable banking system on top of bitcoin, where users never touch the asset, and instead interact with tokens/promises of money and transactions were reversible. Reversibility is not an inherent property of the medium of value it’s the property of the trustful model we’ve layered on top.
The difference is that normal people have access to uncensorable digital payment rails if they are motivated and accept the associated risks (the same they accept when performing cash transactions)
This is also true for debit/cash, basically all payment methods throughout history except for credit cards.
This is also not entirely true, to a minor extent law enforcement and the legal system can provide redress for scams. It helps to only do business with registered entities so you can at least take them to court/small claims.
> This is also true for debit/cash, basically all payment methods throughout history except for credit cards.
Of course it is, since credit cards are a recent innovation if you are analyzing across historical time frames.
And even so, do you see most people preferring to pay in cash nowadays? Or debit card even? I’m not sure on debit vs cc usage rates but I’d for sure be surprised if cash was in use at a higher rate than cc
credit cards make it relatively easy to get a chargeback, few questions asked. They will do the trouble of blacklisting the merchant instead of battling with the consumer. That's very much not the case with crypto.
It's always funny to me how may of the local small business folks align themselves with what they think are business friendly politicians. Those politicians don't care about them ... they care about big business and big business doesn't care about small / happy to push them out of the way.
That's not really surprising. The size of the audience for the latter >> the size of the audience for the former. Most people aren't going to go out of their way to sit on the phone for hours because a small business in another country is being treated unfairly.
Consumers don't necessarily care about businesses, they care about products. And even then they will feel like bad products getting screwed "deserved it".
But when they value something and it's taken away, yea. Recipe for mass anger.
I hate to say it, but one more reason for crypto or any other alternatives. Those companies became too central and crucial. And with power always comes pressure from various sides and corruption.
There's a ton of other payment methods that don't go through CC processors. Wire transfers, ACH, digital checks, payment apps (which are an abstraction over these), or direct payment platforms (like Paypal).
Game retailers could get together to form their own payment company, let's call it GamerPay, which deducts purchases directly from a bank account, just like most other bills we pay. They could probably get a lot of non-gaming related companies on board if they offered lower fees and/or more transparency.
People seem to forget that banks have been transferring funds between accounts for much longer than credit cards have been around. The infrastructure exists for bypassing credit cards, they just aren't what the majority use.
Because almost no administration was ready to regulate it until recently. Payment and remittances are such obvious use cases but if every transaction create a tax event, it's also too cumbersome to implement for most merchant.
If the government has to regulate cryptocurrency for it to be useful as a currency, then it's not very useful as a decentralized currency, is it? In my view, most cryptocurrencies (bitcoin, at the very least) are built on fundamentally unsound economic principles which incentivize hoarding and speculation.
Are we surprised at this outcome? Most of HN encourages forming companies to find a niche in the world, build an arbitrage over it and charge rent. Payment processors and banks do that. Just like startup founders they then listen to the stakeholders with the biggest wallets. It turns out prude Christians have fucking money and apparently more than horny gamer bros.
I don't think you read the post you are commenting about. Article says explicitly what is the problem with problematic content. It explicitly mentions rape and incest content.
Is this content legal, or do you just personally find it objectionable?
Because, no offense, nobody cares what you find objectionable. You could've replaced "rape and incest content" in your comment with "silly content" and it would've had the same impact.
Not that I don't think rape or incest are objectionable, of course I do. I just don't think I or you get to make that determination. I'm self-absorbed, but not that self-absorbed. That's a collective decision that should be made.
A local company who makes swords (very nice ones) ran into an issue where they couldn't take credit cards. No warning, they weren't even told, they were just added to a list and couldn't take payment. https://www.youtube.com/watch?v=nLIcohyT5Dc
They still haven't completely resolved the issue / don't know how they ended up on a bad list.
The idea that someone somewhere else complains inside an opaque system, and your ability to do business ends without warning is absurd. You can't appeal, you can't talk to anyone, you're just hosed. In some cases you AREN'T EVEN TOLD what is going on.