Banks frequently refuse to do business with, or heavily restrict, businesses that they deem risky from a financial perspective. Adult content, pharmaceuticals and travel are all industries that experience significantly higher occurrence of fraud and chargebacks than others. For example, your spouse sees a weird item on your credit card for a porn site. "Wasn't me! Must be stolen I'll report it." Sometimes it's the other direction. Travel businesses often get by on very thin margins with any significant balances due to deposits. If something happens, customers might get deposits back, or they might get chargebacks, and the business can rapidly end up deep in the red.

Often times to bank successfully you need large stagnant balances that are semi-frozen, or meaningful collateral.

This becomes problematic through payment provider platforms which other platforms build upon: it's not straightforward to manage these relationships through so many layers of abstractions. It's easier just to ban the industry.

I don't know the specifics of Kickstarter, but I've seen this happen countless times, so it's not difficult to connect the dots.

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projektfu 2 days ago | parent | next [-]

Every time my credit card number was stolen, it was used to buy sneakers. I think this isn't uncommon but there's no blanket rule against sneaker sales.

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chimeracoder 2 days ago | parent | prev | next [-]

> Adult content, pharmaceuticals and travel are all industries that experience significantly higher occurrence of fraud and chargebacks than others. For example, your spouse sees a weird item on your credit card for a porn site. "Wasn't me! Must be stolen I'll report it." Sometimes it's the other direction.

No, it has nothing to do with chargebacks. It's not even presented that way in their policies when they ban it. They consider it a "brand risk", which is completely different.

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qingcharles 2 days ago | parent | next [-]

I had an opportunity to see the real chargeback data for this type of content and it is not high. It's low. If any bank says they are refusing service because of chargebacks they are lying and using that as an excuse to cover some other reason.

I also remember a story from someone I worked with in the 90s. At that time there were adverts in the back of newspapers for VHS tapes, very cheap. It would say "Get these 8 HOT VHS tapes for $4.99 inc shipping." People would call up and order on their credit card. The reality was the company would only send out a handful of these packages and then claim to be out-of-stock, then they would mail a refund check out to everyone else. The check would be from BIG TITTY BUSTY WHORES LLC or something. Literally nobody would cash the check.

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xyzzy_plugh 2 days ago | parent | prev [-]

For some types of explicit content, sure, I don't disagree. I've seen instances where "fraud" was used as an excuse for an otherwise unpalatable brand.

There hasn't been sufficient reporting on all the lobbying and back-room dealing.

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chimeracoder 2 days ago | parent [-]

> There hasn't been sufficient reporting on all the lobbying and back-room dealing.

There has been tons of reporting on this in the industry. It is not hidden. The war on sex work is extremely well-documented, as is the explicit shift in tactics to targeting financial infrastructure as a tactic.

	▲	xyzzy_plugh 2 days ago \| parent [-]
		What I'm trying to say is that the industry reporting isn't percolating up to e.g. TFA, which makes no mention of any of this.

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KennyBlanken 2 days ago | parent | prev [-]

This hand-waving about fraud is complete nonsense.

The banking industry shrieks about fraud and chargebacks yet gyms, which are basically the scummiest retail businesses on the planet aside from payday lenders, are allowed to use the ACH system and get direct access to money, not credit - that is a royal pain in the ass to revoke?

So much so that my state has an entire set of laws devoted toward curtailing the gym industry's various shitty cancellation policies? I believe they're even prohibited from requiring ACH payment - they must offer other options.

And what about all the local newspapers that make it impossible to cancel? Or all the made-for-TV product companies?

	▲	xyzzy_plugh 2 days ago \| parent [-]
		Brick and mortar is a whole different ballgame.