> OP also misses the fact that Visa and MC can gate-keep legal activities as well. Selling smoking accessories is legal under US law, but good luck getting a payment processor that'll let you sell those goods online
Yes, but Stripe or Paypal adhere to their rules. Visa and MC are the reason those processors don't allow high risk businesses.
For example, OnlyFans last year nearly banned adult content because their processor was going to drop them. Visa/MC were blamed for that, but they ended up making an exception. If you go out to build an OnlyFans alternative, you won't get a processor.
So are you suggesting Visa/MC shouldn’t comply with laws & regulation?
Visa/MC aren’t the “bad guys” here. They are just trying to adhere to the required laws & regulations impose on them.
EDIT: I can’t reply to your comment below, so I’m going to reply here.
> If selling adult services or goods is "illegal," then the US law should codify it, not leave it up Visa/MC/processors to decide.
This is where I think you’re confusing matters. Visa/MC aren’t “deciding”. They are simply asking a merchant to prove if unknown activity is NOT illegal.
If the merchant can’t prove its not illegal, then correct - that merchant can’t continue to transact.
But they aren’t deciding. And that’s the big difference.
EDIT2:
> Now, it’s within Visa and MC’s prerogative to operate how they see fit. A government-backed or decentralized network would bring some needed competition.
The merchant doesn’t have to accept those card networks. They could accept cash, check, ACH, bitcoin, bank transfer, PayPal, WePay, Zelle, etc.
>> So are you suggesting Visa/MC shouldn’t comply with laws & regulation?
Of course Visa/MC should stop payments for illegal activities, but they go after legal activities as well. That's the issue. If selling adult services or goods is "illegal," then the US law should codify it, not leave it up Visa/MC/processors to decide. And it Visa/MC straight up banned these sort of payments, it wouldn't be an issue, but they play favoritism for some companies and ban others out right. Not to mention, many legal businesses lose payment processing ability without even a reason. They claim that even giving a reason will give violators too much information about their internal security.
The EU is actually building their own payment system to combat this [0] and I really think the US should as well.
>> This is where I think you’re confusing matters. Visa/MC aren’t “deciding”. They are simply asking a merchant to prove if unknown activity is NOT illegal.
This is the fundamental difference. Why is the burden of proof on the merchant of wrongdoing? And in reality, payment processors don’t ask for proof, they ban without recourse. Just google getting banned on PayPal and you’ll see thousands of merchants selling legal non-adult goods getting banned.
Now, it’s within Visa and MC’s prerogative to operate how they see fit. A government-backed or decentralized network would bring some needed competition.
Visa & MC are not processors.