Valve confirms credit card companies pressured it to delist certain adult games

Why do payment processors do stuff like this? Is there some regulation that requires them to? I get that they don't want to process fraudulent transactions, but I'd think the response to a higher percentage of fraud from some industry would be to charge them more. It doesn't make sense to me why they would be concerned about the content of games, as long as everything is legal and the parties concerned aren't subject to sanctions.

Some of these games seem completely abhorrent, and probably illegal in more restrictive jurisdictions, but not the United States. And I've not seen any suggestion they're funding terrorism or something. So I'm perplexed.

My guess is it's simply a chargeback risk. It's the reason casinos and adult sites have trouble getting credit card processing and are charged much higher basic rates, even under the best of circumstances when the casino or adult site is operating entirely within the law in the jurisdictions it allows.

Punters run a lot of chargebacks on casinos, and people whose spouses catch a XXX video or game on their card statement will lie and run chargebacks too.

In the case of Valve, a lot of chargebacks would drastically increase the processing rates demanded by the payment providers for all transactions across the board, not just those related to adult games.

There's probably a great market opportunity here for a game store focused on adult games and willing to take on that risk.

That's the problem though. The risk means the market for those riskier credit transactions is literally categorically not a great market. You think JP Morgan gives a shit about Japanese titty games? Hah. No. They care that these games get charged back way more often.

If there is a market opportunity, it's probably in a processor for debit-based transactions that are harder to reverse. But then that makes fraud harder to combat, and one of the reasons everyone loves credit cards so much is because consumers are far more confident to buy from random shops if they know they can always get their money back if the shop scams them.

So - this whole system's lucratively is entirely predicated on easy credit and low risk meaning low fees. Anyone who wants to play in the mud that's leftover by these companies taking the good business are inherently playing a low margin risky game.

I wouldn't scoff at the leftovers. You're talking about maybe a trillion dollar industry that struggles to find payment solutions. This is why I gave up on credit card processing for my startup casino in 2010 and just went to taking Bitcoin and other crypto. I originally planned to just take Visa. I wasn't looking to skirt the law. Card companies are looking out for themselves, and they don't really even need regulatory capture to shaft anyone running a business that the public could consider shady or immoral. There's plenty of demand out there, and in my opinion they're leaving money on the table. But their business model makes it difficult to take on the risk, especially in the case of something like Valve where they can't pick each transaction apart and evaluate the risk separately. So yeah... a globally accepted porn and gambling card? That would be a home run if the bills showed up never to someone's spouse, and it won't happen. Using a combination of crypto and higher CC fees to sell the content, though, there's a lot of pent-up demand.

>This is why I gave up on credit card processing for my startup casino in 2010 and just went to taking Bitcoin and other crypto.

And how many customers you lost in 2010 because of that? Probably more than 90%. Even now people are reluctant to use crypto but tbh crypto crowd is so big that you can perhaps succeed in opening crypto only business.