> 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.
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.
From earlier this year:
https://www.reuters.com/world/us/us-whistleblower-says-maste...
> 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.”
And from 2022:
https://corporate.visa.com/en/sites/visa-perspectives/compan...
> 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.