"Hello from the other side." Why adult/findom payments are so difficult.
Photo by micheile dot com on Unsplash
It’s very frequent in the Findom Twitter space (and online adult services space more widely) to hear of problems with payments. People often find their Cashapp accounts closed, Paypal accounts suspended or their card company blocking their transactions.
In some extreme cases, (like the recent suspension of Tributify by Stripe for example) entire websites can have their services withheld, cancelled or closed by their payment acquirers/processes with very little notice or reason as to why.
Quite often, I see people extremely upset about such cases. Its understandable. But often, they believe there are reasons for such events that might not be quite true in my experience.
Having worked in the electronic payments space for over 17 years (in cards and banking payments), I quite often have been “in the room” or around the people who make such decisions. What it often comes down to is a very cold decision about risk vs money. Getting that balance right yields great profits. Getting it wrong brings disaster.
Let me try and explain and show you what I mean with a little bit of a story , with you as the protagonist.
You wake up at about 7:00am. It’s Monday morning. And if that's not enough, you’ve entered a parallel universe.
In this universe you are a CEO of “Happy Pay”, a mildly successful but small electronic payments firm based in London.
Your company offers payment services. You have the fancy technology that connects your systems to Visa, Mastercard and to the banking networks.
You rent or resell this ability to other companies and people who run websites. When one of your customers users pays for something with their card, the transaction is sent to you and you pass it on to Visa or Mastercard so the money is properly deducted from the card.
Minus a little fee of course ;) You have to eat too!
You are proud of what you’ve achieved. Not only was it very expensive to get that technology and very difficult to build but you also had to overcome another big problem.
Licensing.
Not only did you need the technology to run the business, the government and regulators wouldn’t let you go into business unless you applied and paid for a license.
It felt like a nuisance to go through to get it but, at the same time, it kind of made sense?
At the end of the day, you are handling other people’s money and their information. You have to prove you aren’t a criminal and you are competent.
You yourself wouldn’t just give away your credit card information to any random person in the street?
Even though the license application itself only cost £5,000 – to fill out all the paperwork and get all the right evidence together was so vastly complicated and difficult, you had to employ a lawyer and a consultant to help you get it right. Hell, you needed a lawyer just to understand what they wanted from you!
The lawyer and consultant charged you thousands more on top. Whats more, the regulator demanded you and your company were worth at least 450,000 EUR – and you weren’t!
To get all of this done and get the engineers to build the technology for you cost over a two million euros in the end.
You had to turn to an investment firm to get that money. There was a lengthy contract drawn up which said that they were entitled to some of your profits in order to pay them back. It also said that they owned 49% of your company.
The boss there phones you up every week and gives you a hard time. But at least you got the money and got going! And overall you are in charge and make the decisions!
You power dress like a boss and head into the office.
You’ve barely managed to have a cup of coffee and turn on your laptop when the chief finance officer arrive at your desk. They don’t look very happy. It’s bad news.
The yearly finance report is out on your companies performance. Revenue is down. Remember all those fees you were taking for your work on passing messages into MasterCard and visa? Well this year, you took 15% less of them than last year.
You ask how on earth that can be?
It isn’t that your service is bad – but there are just so many competitors! A big chunk of your original customers have not resigned their contracts with you for this year, because they could go somewhere else for a cheaper price.
You ask your chief finance officer if theres a way to lower your fees but they can’t find a way.
Just when you think your day can’t get any worse, the phone rings.
Its the boss of the investment company who gave you the 2 million to get started. They have read the report too and they aren’t happy. After all the accusations of “pissing their money up the wall” and calling you a “waste of their grand childrens inheritance” you manage to convince them you are in control and that it’s just a temporary problem. The revenue will return to where it was and then some and their 2 million investment is safe. They’ll still get it all back plus more as agreed.
But as you hang up the phone you don’t feel so confident. You put your head in your hands. How on earth are you going to get out of this?
Just at that moment, when all seems lost, your Chief Commercial Officer shows up and they’re weirdly in a great mood. “Boss! Amazing news!” they say.
They’ve just agreed a massive new deal with a company called “Grant-a-wish”
You’ve heard of them before! They are big! They offer celebrities, sports stars and content creators the ability to setup a list of “items” that are published on line. Their fans can buy from them or, pay to support them.
SOME of the “content creators” on their platform, are in fact, adult content creators.
The amount of payments these guys will be sending to you will be HUGE apparently. WAY bigger than any other customer you’ve worked with so far.
You let out a massive sigh of relief. The fees from this customer will more than make up for the decrease!
You just need to put your signature on the contract. The chief commercial officer rushes off to go and get the paperwork for you to sign.
Just as soon as they leave the office though, the door bursts open again and in walks your chief risk officer.
They want to warn you about this deal. Whilst Grant-a-wish look like a clean, reputable company, your risk officer isn’t happy they are always looking closely into who they let sign up for their services. In other words, they don’t carefully inspect their own customers. Also, he isn’t very happy about the adult nature of some of their business.
You ask for evidence of this and they point to an audit report from two years ago.
You roll your eyes a bit. Is this one of those stuffy, conservative guys who just has a downer on sex work?
Once the chief commercial officer returns with the paperwork, you ask them about the risk of working with this new customer.
But they assure you, they know the CEO there really well and trust her implicitly. That audit report the risk guy was talking about is two years old and Grant-a-Wish is still trading stronger than ever. It must all be nonsense?!
Then they show you the predicted revenue again – and it looks amazing.
You grab your pen and sign.
In the first 9 months alone, Grant-a-wish send you 100 times all the other transactions from your other customers alone.
The end of the year is amazing. The boss of the investment company hails you as a “savior” for turning around a failing company and gives you a £50,000 bonus.
Your Chief commercial officer gets a bonus too and your staff all get free champagne at a lavish christmas party. Everything is amazing. So amazing, the industry press write an article about you and your company wins a prestigious industry award for “great customer service” which “wins customers round to you”
Your name is on the map. People start to hear it. They know you don’t mind working with adult content. The phone starts ringing.
At the start of the next year, your Chief Commercial Officer has done it again!
This time, its a deal with FinCam – a company that provides the technology to multiple adult webcam site operators and also does content distribution and sales.
Their model is pretty simple. They provide software and connection to people that want to run cam sites with multiple models. They also have lots of clever technology to take payments. They want to pass these payments to your system to handle with Visa and Mastercard.
The deal is awesome. Once again, its going to be HUGE numbers of payments that you will get to take fees for. You know just how lucrative cam sites and things like OnlyFans can be.
But once again, before you can put pen to paper, the chief risk officer has sent you emails complaining about this deal. They’re going on and on about how this line of work is risky and how you should be more careful about working in supporting sex work and adult content.
You think back to your time before this job and your involvement in adult. You always agreed that sex workers were being erased. Silenced. Either through shadow bans or payment blocks, it always seemed this way.
They weren’t always able to take payments properly. You remember Paypal accounts being closed, wish list sites being cancelled and Cashapp usage being banned – just because consenting adults wanted to give each other money for services. You remember how angry it made you. You joined discord groups about it, made posts about it on Twitter and even signed petitions to the government and OnlyFans to keep access to payments open.
It always struck you that it was just about oppression, perhaps sexism? That most of the beneficiaries of the payments for these services were women – and they were always being closed down? It wasn’t just or fair. Sex workers needed support.
And here is this risk officer – sending you email after email about how it was a bad idea?
You dismiss their warnings outright and sign on the dotted line. This is your moment to support sex workers and send a positive message to that community.
And they hear it.
FinCam announce the new business and soon payments are flowing more freely than ever. You are mentioned by name on Twitter by more than a few sex worker accounts. You are some what of a hero to them.
All goes well and you close the financial year in an even better position.
All is well until one cold rainy Tuesday morning the following January.
The chief risk officer at your desk.
“Have you seen the news?” they ask.
You open Apple news on your laptop and front page is a story about people trafficking at Funcam and JuicyChat.
Apparently, the offices for both of these webcam sites had been raided by police and many of their executive officers arrested. It had been found that up to 40% of the models on their site were either underage, or had been trafficked into performing on cam. The article you read follows the harrowing story of just one of the girls involved - “Amanda”- who was essentially kidnapped in Romania and bought to England to work as a cam model and prostitute by a criminal gang. Her passport was taken and she wasn’t allowed to go home until she had “earned enough.”
“This is terrible” you say “but what has it got to do with us?”
The chief risk officer lets you know, both of these websites were customers of FinCam - and both had been processing payments, ultimately through your system. Without knowing it, you had inadvertently supported a criminal gang in trafficking and abusing over 100 women, many of them underage.
By the following Thursday, things have gotten worse. A journalist has phoned your marketing team for comment on what has happened and how it was possible - and there is now apparently an ongoing police investigation into the situation. Your marketing teams and lawyers tell you they’ve received a court warrant ordering they turn over all documentation and emails related to your involvement with FinCam.
The police see all the emails where you were warned about this being a risky business. You will have to attend a meeting with them next week as they now suspect you of being involved somehow.
You put your head in your hands.
But it’s not over yet.
Whilst you are with your marketing and legal team, they tell you that the CEO of Grant-a-wish, the first company you signed, has been arrested in Lithuania as part of an ongoing investigation in money laundering. Apparently, some of the content providers making wish lists on their platform, weren’t actually content providers. They were criminal gangs, using the platform as part of a money laundering operation, to take in money from stolen credit and debit cards and get “clean” money from the payouts. It seems the crime may have run into hundreds of thousands of pounds.
Again, all of the transactions came into your platform and there is suspicion your company is involved somehow.
At the end of the day, you briefly flick through the same Twitter feeds and Discord servers that you were once hailed in as a hero to the sex work industry and find that the picture is now very different. Some of the same accounts that once commented on the good work you were doing are now openly calling you a pedophile, an abuser and being complicit in crimes against women.
Just before your first police interview, your lawyer cautions you. If the company has been found as complicit in some way in these crimes at FinCam – you could face time in prison. They also let you know, the regulator is meeting at the end of the week to discuss suspending your license. Without your license, you can no longer do business.
Your reputation is in tatters
Your business faces closure
You face bankruptcy and even prison
You suddenly realise why handling payments for adult services is so difficult.
Whilst this scenario is entirely fictional, it’s not that far from the truth and not much different from some situations I’ve heard of at payment companies.
The problem with adult and gambling transactions, especially online, is often not a moral one. And it often actually isn’t political either.
It’s a risk one.
Business ultimately is always, risk vs reward.
It turns out that the adult industry is often a difficult place to police and control carefully. Payment companies cannot easily validate the age and consent level of everyone easily, especially where customers are serving other customers.
Yet despite this, they are given moral and regulatory responsibility to make sure they are not aiding/abetting criminals. Equally, in payment services models where one company is serving another, it can be very hard to identify who end customers really are and to know exactly what they are REALLY using the system for?
Adult services often also involves high numbers of lower/medium sized volume transactions (such as tips for cam girls or small value findom reimbursements/drains) and these can be very hard to tell apart from money laundering transactions.
But as soon as it becomes clear a crime has occurred, payments companies are the first in the firing line. Blamed for being complicit or not doing enough. “How were we supposed to know?” and “but it wasn’t our responsibility” are not excuses that fly when children are being sexually abused. The court of public opinion usually convicts, even if no legal wrong doing was proven.
Aside from these “practical” risks, there are other, economic risks. Chargebacks (where a customer complains and wants to be refunded for a service) are a normal feature of credit cards and debit cards and are actually helpful to consumers in many cases. But in adult services, these become extremely difficult for companies involved to sort out.
Given the risks, the difficulties and the complexities and that, adult is a percentage of overall payments, it’s not that surprising that many payments companies just put a note in their terms and conditions upfront that their services cannot be used for these purposes.
And why, when they find a company or individual breaking these terms and conditions, they come down so hard with (often unfair and uneven) knee jerk reactions to them. Yes, I speak as someone who has had three Paypal accounts closed myself.
It’s much easier and less risky for them to just not get involved at all. And it’s often THIS is really the reason why we often see a problem with adult payments, rather than sexism or politics.
All of this said, the concept of most adult services in the UK are, of course, legal. Consenting adults should and DO have the right to sell each other material and services of an adult nature. This isn’t an insignificant industry and I should add, actually is an important one for many reasons. So as a classical liberal and personal freedom advocate (not to mention a raging pervert!), I fully support the need for people to be able to pay each other for such things.
It is no doubt a shame that adult services find the payments sector difficult to navigate. Whilst there are things that can be done to make them safer and less risky though, I think perhaps there needs to be somewhat of a shift in societies thinking in general about sex work, adult services and the people who buy and sell in that space.
Perhaps this is really what is behind some of the more radical views on why payments in the space is difficult – and for that I have some sympathy.
I would just urge, we don’t always assume the worst when actually, the risk vs reward nature of the capitalist game being played is actually often behind the decision to close your CashApp account and not a direct attack on you as an individual or you as a sex worker/content buyer.