alt Hacker NewsWhy do payment processors do stuff like this? Is there some regulation that requires them to? I get that they don't want to process fraudulent transactions, but I'd think the response to a higher percentage of fraud from some industry would be to charge them more. It doesn't make sense to me why they would be concerned about the content of games, as long as everything is legal and the parties concerned aren't subject to sanctions.
Some of these games seem completely abhorrent, and probably illegal in more restrictive jurisdictions, but not the United States. And I've not seen any suggestion they're funding terrorism or something. So I'm perplexed.
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My guess is it's simply a chargeback risk. It's the reason casinos and adult sites have trouble getting credit card processing and are charged much higher basic rates, even under the best of circumstances when the casino or adult site is operating entirely within the law in the jurisdictions it allows.
Punters run a lot of chargebacks on casinos, and people whose spouses catch a XXX video or game on their card statement will lie and run chargebacks too.
In the case of Valve, a lot of chargebacks would drastically increase the processing rates demanded by the payment providers for all transactions across the board, not just those related to adult games.
There's probably a great market opportunity here for a game store focused on adult games and willing to take on that risk.
At least at one time, part of the answer would have been Operation Choke Point: https://en.wikipedia.org/wiki/Operation_Choke_Point
However, that's clearly not all that's going on -- it doesn't seem like the government is still doing this.
If I remember correct from the hot money podcast https://www.ft.com/content/762e4648-06d7-4abd-8d1e-ccefb74b3... part of the problem for the credit card companies is figuring what are the boundaries of legality. Countries have very different laws. Things like representing homosexuality or age of consent are very different and credit cards feel that it is a risky business because of that.
The USA is extremely litigious, rules are decided not by the legislature usually but instead by people suing each other to establish case law, and anyone with a bone to pick could sink you in legal fees and proceedings at a whim. So probably people who don’t like the idea of adult content can use the courts to make payment processors’ lives painful and they decide to just forgo that business.
US courts are too easy to use as a tool of abuse.
Another factor is that credit providers (i.e. banks) are increasingly using customer transaction data to assess customer behaviour as part of its risk scoring.
If a customer is regularly purchasing adult material that would be definitely be a red flag.
See Bill Ackman and his crusade against PornHub.
It's not just games.
Payment processors ban many things that are completely legal, even foods and dietary supplements. It's ridiculous. They have too much power.
It could be a holdover from Operation Choke Point, an Obama-administration arm-twisting initiative that would subject banks to more regulatory scrutiny and possible disciplinary action if they did business with certain "high-risk businesses" including firearm and pornography sellers. Ostensibly the initiative was ended in 2017, but banks are probably still afraid to be handed the black spot for doing business with the "wrong" sorts of people.
This is one of the ways the government can censor people despite the first amendment. It’s absolutely by design. The regulators “express concern” about certain financial activity and then the companies remove it.
> Why do payment processors do stuff like this? Is there some regulation that requires them to?
Generally no, but they exist in a regulatory morass where it's impossible to do what they do without arguably or perhaps technically being in violation of hundreds of regulations at any given time.
The US government then uses their power to selectively enforce the voluminous mess of bad regulations to coerce parties to undertake actions which it would be flatly illegal for the government to perform directly such as cutting off sexually explicit content from payment rails.
e.g. https://en.wikipedia.org/wiki/Operation_Choke_Point
The practice isn't limited to payment processors but they're a particularly good vector given the level of regulation they're subjected to. Choke Point (and Choke point 2) are just specific examples of a general tactic to end run around the public's rights that has been used by the US government for decades. In most cases the abuse isn't so well organized that it has a project name you can point at.
Congress and the whitehouse leaning on social media companies to suppress lawful opinions on covid policy is another example of that kind of abuse that has received some public scrutiny. Most cases, however, go without notice particularly since the ultimate victims of the actions generally have no way to know the cause.
I suspect Valve is blaming the credit card companies for something they really wanted for themselves. Steam is a big store open to everyone and you’re going to scare away a big chunk of seniors, Christians, etc with stuff like incest, ageplay, and rape just so that a small minority uses you instead of…itch.io? Better to keep the big safe names like Being a Dik and Eternum on Steam and flush the rest so that you can have the best of both worlds.
One factor is the ongoing campaigns from number of moral crusading groups who lobby them to cut off payment processing for things they don't approve of. NCOSE has been working for decades on the project, and targeting credit card companies has been a successful tactic for them for a decade or so.
[1] https://www.eff.org/deeplinks/2020/12/visa-and-mastercard-ar...
[2] https://www.newsweek.com/why-visa-mastercard-being-blamed-on...
[3] https://scholarworks.iu.edu/dspace/bitstreams/761eb6c3-9377-...