Remember this next time people start pushing going cashless.
Doing so means that a third party is involved in every transaction you make, and that someone else will always have veto power over your commercial transactions.
Mass adoption of crypto will come with the same problem - middlemen slipping in under the guise of efficiency and convenience, who will then be compelled to cooperate with big brother.
PayPal and other pseudo currencies already did, for a while. You bought virtual currency (which PayPal was at first, and so was e-gold, webmoney, etc) and traded that for anything you could.
Then PayPal wanted to go big, other virtual currencies were caught in fraud scandals of their own (not their users'), people just lost trust and interest when card processing became more common.
Some are still around but sellers can't be arsed to use them. Maybe they will, once again.
What type of fraud? It seems to me that it would make it basically impossible to defraud a merchant with a stolen payment method (much like cash). Do you mean merchants defrauding their customers?
Right, but that means it will be a lot easier to scam regular people. The ability to clawback money is a vital way of stopping scams over the internet.
1. Freedom of Speech extends to all parties in a relationship
2. Freedom of speech includes choosing who I work with
3. It makes sense to have certain restrictions on freedom of speech, especially as it relates to clearly harmful discrimination (i.e. racial discrimination, gender discrimination)
4. It does not make sense to restrict freedom of speech in the case of pornography, specifically, whether a company can choose to work with pornographers or not
We mandate that some companies participate in the sex trade, at least to the extent that payment processors can be considered to be participating.
The electrical company is mandated to provide power to Onlyfans' datacenters, so long as they are paying for the service.
Also there's basically only four payment processors: Visa, Mastercard, Discover and Amex. None of them specialize in adult business. There are downstream processors along the lines of PayPal and Stripe, and some of them specialize in adult business, but they're entirely beholden to the big four.
I think this is different. If the customer is unhappy with the service provided, their dispute has nothing to do with the electrical company, nor are they going to claw back payments to them.
I highly doubt they are going through CCBill. They are too expensive at volume. Since they are only charging models 20% I suspect they tried to pretend to not be adult, which they probably weren't in the beginning. But not it is almost all adult and CC processors know that and want their higher cut.
There is this from January, where MasterCard wanted sellers of adult content to have more stringent verification of the age and consent of performers in the wake of the PornHub scandal, which I’ve seen people speculating may be related: https://thehill.com/policy/technology/548279-mastercard-upda...
These aren’t explicitly linked in the story but it would make sense IMO
You know how US Dollars say “This note is legal tender for all debts” on them?
It seems to absurd to allow companies with an oligopoly on most of the transfer of those notes to pick and choose what sectors are appropriate for citizens to interact with financially.
> companies with an oligopoly on most of the transfer of those notes
This is an important distinction. Credit card payments are not notes. They are not cash. So these companies have very little to do with the transfer of cash.
The point of "legal tender" is that if you try to pay off a debt in cash, they can't claim you haven't paid it and take you to court. If you try to pay for your meal in a restaurant with cash and they refuse, you can just walk out and they wouldn't have a legal case (probably. in theory. not legal advice).
What's tricky is this has to be a debt, as in past tense. If you try to buy groceries with cash and they refuse, you can walk out but you can't the groceries with you.
Participation in the cash market is mandatory on anyone who is owed money. Everything else on top (credit cards, checks) is essentially voluntary. Merchants can take it or leave it, the processors can come or go.
If you want to make an argument about the outsized effect that Visa has on the US monetary system, that's totally legitimate. It just has little to do with the concept of "legal tender".
If you try to pay for your meal in a restaurant with cash and they refuse, you can just walk out and they wouldn't have a legal case (probably. in theory. not legal advice).
I think they would have a case, because you still owe them a debt. But then after you lose the case you can pay in cash. Just how I understand it, could be wrong. Doesn't change your point though.
The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.
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The important distinction is payment for goods or services vs payment for a debt. Dine-in restaurants work on debt (you eat the food then pay for it), but grocery stores work on payment for goods (you get the food and pay for it in one transaction).
I don't think it's accurate to say restaurants are extending credit to their customers. If you walk out without paying, it's theft, not defaulting on a loan.
Let's say you had a business that only accepted pokemon cards as payment. One of your customers does not pay their bill, so you take them to small claims court. The judge is going to rule that they pay you the value of the card, because debts are settled with money.
The way to avoid this if you want to really pay in cash is to order the cash from your bank and have an armored car service transport it for you. There is just little point since that's more expensive than a check or ACH transfer.
And yes Civil Asset Forfeiture is pure evil, I agree.
There is no financial neutrality requirement, but perhaps there should be.
Also, that quote on the dollar has nothing to do with your argument. You seem to be projecting a layperson’s interpretation of those words instead of the relevant jurisprudence.
morality is relative.... next stop it is strip clubs, then hooters being banned?
Payment processors provide a utility. They should have the right not to process illegal transactions and illegal activities.
But as long as the activity is legal, it shouldn't be up to them to police morality.
They should be treated like utilities.
If we go down this path, the city's water and electric utilities can decide to shut down the new hooters, because it is obscene and against god (according to conservaties), or it uses women and is an oppressor (according to some liberals).
Utilities shouldn't be involved in morality policing.
There are a couple practical reasons why they wouldn't want to: high risk of fraud or chargebacks and difficulty keeping on top of content that veers into illegality spring to mind immediately.
Like paying for abortions or gay weddings in certain states? Buying cannabis from somebody on the street instead of somebody in a store 6 months later? Promoting unions depending on the decade? Letting “trespassing” black people buy coffee in shops that banned them in the 60s? Making breaking the law impossible is dangerous
This is a very legitimate concern -- payment processors could start enforcing that kind of thing based on morality.
However, unless something has changed lately, for decades the issue with adult content + online payment processors is not morality related. It's because of the high fraud/chargeback rates associated with online porn transactions.
Unless it's SESTA/FOSTA related, but I don't think anything's changed on that front for a while.
They can simply charge more based on a mathematically provable risk of fraud/chargebacks. We can regulate that to make it fair/transparent, and also regulate that payment processors must not discriminate against any activity that is legal.
Yeah, this is a fair point. I think it would make sense to require them to offer services, but let them charge a rate that allows them to make similar margins as on other business.
Why should it require specialization at all besides that laws pushed by religious conservatives to advance puritan ideals demand it? Don't be a doctor if you aren't willing to help your patient exercise their right to choose and don't be a payment processor if you're not willing to process payments in a neutral fashion. It's rediculous that at a time when equity and #metoo is all the rage that no one is talking about inequity in the law in the form of legal sandbags.
That is called democracy and yes there are a lot of things that are not sold.
General public agrees that explicit material is bad.
Right now we have in Poland shops closed each Sunday - it is annoying for me. Selling alcohol in Norway is heavily restricted and I see more and more restrictions on alcohol sales in Poland.
Explicit material is tied a lot to money laundering, there is also a lot of scams tied to it and lots of stolen cards are used to pay for explicit material. It is huge cost for payment providers, all the laws for anti-laundering trump any "payment neutrality".
If you want to see naked ladies go to "a place" and risk on your own, pay with cash.
Payment networks should operate according to laws and regulations, not reputation and public opinion. Would you want your electricity turned off because someone did not like who you were or what you believe? That is a road to tyranny.
I agree, but the law does have to consider the very different risk profile some customers present. As has been pointed out, adult businesses have to deal with shame and a lot of fraudulent chargebacks. The reality is that they are much more expensive to service.
Given that payment processors are an oligopoly, and it's incredibly difficult to build another Visa or MasterCard, they should be regulated as utilities (or at the very least, similarly to telecom providers), and be required to be content-neutral.
Just like Comcast can't tell me I can't download porn, Visa shouldn't be able to tell me I can't buy it, either.
I think you and @toomuchtodo are talking about different things.
Laws, democratic or otherwise, can indeed constrain what payment providers will allow themselves to be used for.
Public opinion short of law should not be able to add further constraints.
IMO the question of “what should Visa and MasterCard be allowed to restrict?” is the same category of question as “what category of app should Apple and Google be allowed to restrict?”
> Public opinion short of law should not be able to add further constraints.
Isn't reputational feedback one of the key enablers of the free market? Unless you want to move to a system that is fully centrally planned and noncompetitive, you'll have reputational differences (read: public opinion) affecting the success of a firm. To the extent that reputation affects a firm's success, the firm will make decisions (including "do we carry this unpopular thing") based on its reputation.
Shall we require all firms to do business with all potential partners, regardless of reputational repercussions, or if the partner has an established history of abuse (say, a contractor who repeatedly under-delivers on contracts)?
I see your point, but I was thinking specifically of the case where public opinion influences the behaviour of monopolies and duopolies. If there were e.g. a thousand payment providers each with 0.05-0.15% market shares, I’d agree with the free market and reputation approach; but as the number of important players gets smaller, public opinion becomes more like an plutocracy (because one dollar is one vote) without any of the institutional self-regulation governments develop out of necessity.
What if they decide people can no longer buy dildos or lube or condoms or guns or alcohol or meat on Fridays?
There’s no law with respect to “payment neutrality”??