This Payabl and VISA study, which was published in early December 2022, is being republished. Payabl has taken issue with our report containing an image that they posted on LinkedIn and Twitter. We are republishing the report without this photo to that extent. Payabl is presently receiving a lot of backlash on Twitter for gifting BMWs to its staff members. It aptly illustrates how lucrative it can be to work as a high-risk payment processor for the gaming and porn industries.
Visa and Mastercard banned card payments for TrafficJunky, the advertising division of MindGeek, the company that owns PornHub, in August 2022. This was in response to a lawsuit that highlighted concerns about the payment companies’ possible involvement in the monetization of child porn and sex trafficking. Visa’s attempt to get her claim dismissed was denied by a federal judge in California. The woman filed the lawsuit alleging that Visa helped distribute child pornography on PornHub and other MindGeek-run websites.
Additionally, campaigners and sceptic investors heavily criticised Visa for its cautious handling of PornHub. The parent business of PornHub is allegedly receiving money from Visa even though the billionaire hedge fund manager Bill Ackman, who has the authority to shut down the website in a matter of hours, knows it is “littered” with child porn. Ackman made this assertion in February 2022.
Before a verdict is made, the PornHub court battle is likely to go on for another year. It is currently impossible to predict whether Visa will lose and have to pay damages. Nonetheless, it is reasonable to believe that Visa ought to become more sensitive when handling payments for pornographic content suppliers.
We were taken aback by the affectionate embrace that transpired in Milan between the executives of Payabl., Theodoros Hadjistyllis and David Scalabrino, and the Italian Visa administrators, Luca Airoldi and Gianluca Magistroni. The two were Visa’s guests at the biggest payment convention in Italy, Il Salone dei Pagamenti. Payabl. posted the images on LinkedIn and Twitter.
Not that we’re accusing Visa or Payabl of any unlawful activity. That Visa is not fading into obscurity in the face of public outcry over its purported support of child porn and sex trafficking, however, surprises us.
Dietmar Knoechelmann and Ruediger Trautmann, two former Wirecard top executives, formed the high-risk payment processor Payabl. (previously PowerCash21 and Inatec) more than ten years ago as a member of Wirecard’s “Shadow Organization,” as the German prosecutors refer to it. The owners of sizable pornographic websites like StripChat and xHamsterLive are among Payabl’s clients.
Nearly 48% of Payabl’s referral traffic originates from pornographic websites, according to Similarweb. The remainder is derived from other high-risk sectors of the economy, such gambling and investing.
The Payabl website lists eToro, Basketnews, ShadowPay, and XM as among its partners and clients.
What is PornHub
The adult entertainment company Aylo owns a number of these websites, including the Canadian-owned pornographic video-sharing website Pornhub. Pornhub is currently the second most popular pornographic website, after XVideos, and the 14th most popular website overall as of December 2023.
Visitors to the website can watch pornographic videos in a variety of genres, such as amateur and professional pornography. On social media platforms, users have the option to share videos and cast “like” or “dislike” votes. In addition, users have the opportunity to create a free Pornhub account, which enables them to upload films of their own as well as download, favourite, and make comments on videos. If any content breaches the terms of service of the website, it can be reported. Every year, the Pornhub Awards are held on the website.
Payment processors Mastercard and Visa stopped providing services to Pornhub in December 2020 in response to a New York Times exposé about non-consensual pornography and sex trafficking (and the possible backlash it sparked). Pornhub then deleted all videos uploaded by unverified users, bringing the platform’s total content down from 13 million to 4 million videos. Money Shot: The Pornhub Story, a 2023 documentary, explores the opinions of certain pornographic artists as well as the opposition to Pornhub.
The Definitive Handbook of High-Risk Payment Gateways
1. Being aware of high-risk payment gateways
1.1 What is a Payment Gateway at High Risk?
A technique called a #high_risk_payment_gateway allows online firms to process credit cards. It is the digital counterpart of the actual point-of-sale terminal found in the majority of retail establishments. Sensitive data, including credit card numbers, is encrypted by #Payment_gateways to provide secure data transmission between the buyer and the seller.
1.2 Why a High-Risk Payment Gateway Is Required
Some industries are considered “high risk” in the context of internet business because of things like high chargeback rates, hazy regulatory frameworks, and reputational hazards. To guarantee smooth and safe transactions and enable them to take various payment methods from clients across the globe, these companies need a high risk payment gateway.
2. Merchant Accounts at High Risk
2.1 A High Risk Merchant Account: What Is It?
A particular kind of bank account that enables companies to take credit card payments is called a #high_risk_merchant_account. Specialized #merchant_accounts are necessary for businesses deemed high risk by banks and credit card processors. These accounts are intended to protect these businesses from potential financial and fraud concerns.
2.2 How a High-Risk Merchant Account Operates
These accounts work in the same way as standard merchant accounts, but because of the dangers involved, they have extra security features and significantly higher fees. In order to stop fraud, transactions made through high-risk merchant accounts are examined more closely.
3. Processing Payments at High Risk
3.1 Comprehending Payment Processing at High Risk Crédit card processing for high-risk enterprises is referred to as high-risk payment processing.
These companies need specialized high-risk payment processors that can handle the particular difficulties of their sector and provide sophisticated risk management tools, strong fraud protection protocols, and customized features.
3.2 The Significance of Processing High-Risk Payments
For companies that traditional banks or payment service providers view as high risk, high risk payment processing is essential. It offers #secure_payment_processing, guarantees adherence to industry rules, and improves consumer happiness and trust by doing all of these things.
4. High Risk Payment Processors’ Function
The link between high risk companies and the banking sector is high risk payment processors. They offer helpful guidance on keeping a positive processing history, help set up merchant accounts, and grant access to high risk payment gateways.
5. Examples of High Risk Industries
A wide range of sectors are classified as high risk because of the nature of their operations or business models. These consist of, among other things, telemarketing, online gaming, adult entertainment, cryptocurrency trading, online pharmacy, and travel services.
6. Elements of a High-Risk Business
A firm may be categorised as high risk for a number of reasons. These consist of the credit history of the business owner, the industry the company works in, the chargeback percentage of the company, and the location of the company. Additionally, companies that sell expensive goods or provide subscription-based services are frequently regarded as high risk.
7. Benefits and Drawbacks of Processing High-Risk Payments
Benefits of #high_risk_payment_processing outweigh its drawbacks, which include increased costs and more stringent rules. High-risk companies can sell goods or services deemed dangerous by conventional payment processors, have access to a worldwide market, and have the potential for larger sales volumes.
8. Security Protocols for Processing Payments at High Risk
Advanced security procedures are used by high-risk payment processors to safeguard sensitive information. These consist of address verification systems, secure sockets layer (SSL) protocols, and encryption technologies. To guarantee safe transactions, high risk processors also adhere to the Payment Card Industry Data Security Standard (PCI DSS).
9. Handling Payment Processing Fees at High Risk
The greater risk that high risk payment processors take on often results in higher fees. Chargeback fees, monthly fees, transaction fees, and setup fees are a few examples of these costs. Nonetheless, in order for high-risk firms to run efficiently and safely, these expenses are required.
10. Selecting the Best Provider of High Risk Payment Gateways
Selecting an appropriate #high_risk_payment_gateway_provider is essential to a high-risk business’s success. Companies should seek out suppliers who have a proven track record in the high-risk industry, extensive security protocols, open pricing, and first-rate customer service.
High risk enterprises require high risk merchant accounts, high risk payment gateways, and high risk payment processing. Even though these companies have particular difficulties, with the correct payment options, they can also take advantage of profitable prospects. Consequently, mastering these components and their nuances is essential to succeeding in the high-risk business environment.