In the fall of 2002, I was a budding entrepreneur, launching my very own porno website. At 20 years old I was wide eyed, naive, and rather ignorant about the workings of the adult industry. But a few weeks into my tenure as a pornographer, Visa and MasterCard made an announcement that forced me to wise up quick—and that shaped the way the adult industry, and anyone who works in sex, has done business online ever since.
The simple version of the story is that in 2002, frustrated with the high rate of chargebacks related to porn sites (possibly due to scammy behavior on the part of porn merchants, but more likely due to shame-induced buyer's remorse on the part of porn consumers), Visa and MasterCard made the decision to classify adult sites as "high risk," and require anyone hoping to process payments for adult content to pay an upfront registration fee, plus annual renewal every year after. (Rates can vary depending on payment processors, but popular adult payment processor CCBill currently charges $1000 annually.)
On the surface, this might seem like nothing more than an annoying additional expense, one easily borne by any successful business. But in practice, it provided payment processors with a license to discriminate against anyone working in sex—even in situations that have nothing to do with their work.
Shortly after the Visa/MasterCard announcement, PayPal announced that it would no longer be processing payments for anyone tied to sex (which, it should be noted, also included sex toys). PayPal is not alone in this stance: dig into the TOS of virtually any popular digital payment platform, and chances are good you'll find some sort of ban on adult content and services, a ban that payment processors are free to employ with broad jurisdiction.
Online payment platforms make it near impossible for members of the sex industry to accept payments
In 2014 porn performer Eden Alexander tried to use crowdfunding platform GiveForward to raise funds for medical expenses, only to have WePay, GiveForward's payment processor, confiscate her funds on the basis of her profession. In an interview, pro-domme and porn performer Bella Vendetta informed me that around the same time as Eden Alexander was getting shafted (in the bad way) by WePay, she had an unfortunate run in with PayPal. Vendetta was using the site to raise funds to fly in a performance artist from Norway for a flesh hook suspension event; after she'd raised nearly $1000, PayPal froze her account and permanently banned her from PayPal, citing her history of sex work as a sign that she was "high risk" and not fit to use PayPal, even for a fundraiser for a friend.
So if online payment platforms make it near impossible for members of the sex industry to accept payments online, how, exactly, does anyone working in sex ever get paid? For most people in the industry, the answer is very cautiously, and with whole bunch of headaches and additional fees.
In her work as a pro domme, Vendetta's used a number of mainstream payment platforms—including GiftRocket, Google Wallet, bitcoin, Venmo, and yes, even PayPal—to accept tributes from her clients with varying degrees of success. While it's possible to fly under the radar of a mainstream payment processor's acceptable use policy, any sex worker making use of one of these platforms always runs the risk of having their account frozen and their finances seized with no notice. (To this day, I immediately withdraw any funds deposited in my PayPal account out of sex industry-related paranoia.)
There are mainstream payment processors are slightly more adult friendly—Dwolla, used to process payments by MakeLoveNotPorn.tv, is at least tacitly tolerant of adult content—but oftentimes these processors are obscure, complicated to use, and much shadier than their competitors. It can be difficult to get a client to connect their bank account to a payment platform they've never heard of, and it's hard to feel comfortable using a service that could easily shut down overnight, taking whatever money that might be owed to you with them as they cut and run. When adult payment processor Globill shut down with no notice in the summer of 2003, I lost hundreds of dollars, and I was one of their luckier ex-clients.
Of course, not all sex work is created equal. MakeLoveNotPorn was built out of Cindy Gallop's legendary talk, and yet still had trouble finding a payment processor.
The safest option is to work with a payment processor that's specifically intended to be used by the adult industry. Annoyingly, those options also happen to be really fucking expensive. In addition to the annual fees paid out to Visa and MasterCard, adult industry-focused payment platforms charge sizeable fees, often three to five times the amount taken by PayPal or other mainstream payment processors. For example, CCBill fees range from 10.8 percent to a whopping 14.5 percent of a seller's transactions.
Even back in 2002, when the adult industry was flush with cash, these fees were a painful nuisance. As piracy and tube sites have led to dramatically decreased profits for porn companies, they've become a much greater burden for the adult industry to bear, especially for escorts, cam girls, and other independent sex workers like Vendetta, who—unlike some of the larger corporate entities of the porn world—are on their own and navigating payment processing without the cushion of corporate-sized profits.
Adding insult to injury is the fact that adult industry payment processors aren't usually the most innovative or dynamic players. Many are still tied to a subscription site model that's fallen out of favor as a plethora of free porn makes an ongoing commitment to one site less appealing to most consumers. Pornographers looking to shake up their payment structure and get creative about how they get paid can find themselves out of luck and with few places to turn to.
When adult oriented crowdfunding platform Offbeatr couldn't find a payment processor willing to work with its model, the company was forced to secure a merchant account of its own—an arduous, expensive, and incredibly difficult process that most adult entrepreneurs aren't really up to.
And unfortunately, there's no real end or solution in sight. Unless there's major pressure on Visa or MasterCard to roll back these fees—a difficult proposition in a world where the stigma around paying for sex-related items will always make consumers more likely to cry fraud, even on legitimate charges—it'll always be more expensive to do business with sex workers, and even the most well-intentioned payment platforms won't be able to cut adult workers much slack. Should bitcoin ever become a truly viable currency adopted by the mainstream, it might be a solution to the sex industry's woes, but there's no guarantee that bitcoin won't take a similarly conservative stance on adult content once it achieves more mainstream acceptance (and, let's be serious: the chances of bitcoin becoming widely adopted are still pretty slim).
If you're motivated to do something to help out people working in sex, well, consider this one more reason why you should be paying for your porn. Sure, it won't eradicate the discrimination from credit card companies or payment processors, but it'll at least give members of the sex industry some scratch to help cover those exorbitant fees. (And, uh, if you do hold some sway over the decision makers at Visa, MasterCard, or any major banks, feel free to petition them to change their policies.)