A few weeks ago, I wrote an article discussing whether 3DX artists should continue to trust Patreon as a source of funding. In light of the events of the time – namely small-time right-wing publications raising hell due to an unrelated incident – there was concern we would be cut off, and soon. While things have calmed down, the precarious nature of our relationship with Patreon was exposed.
It also revealed something else uncomfortable: It’s rather difficult to legitimately earn money as a creator of adult content. A few people complained about my article, saying that I gave Patreon a bad break because it was apparently easy for them to pay in comparison to other sources (including the Affect3D Store). What consumers don’t understand is that things aren’t that simple. Allow me to give you a tour of how payments work in this business, and we’ll see how your view changes.
The Ugly Truth about Paying for Porn
At the center of Internet shopping, whether it’s for porn or for oven mitts, are the payment processors. They’re the digital equivalent of a cash register you find at actual stores. You give your credit card details, they charge it. Some places, like Amazon, have their own payment processor, but many use third-party companies with names like Stripe or Square.
In order to pay for using these services, these processors ask for a fee. It’s usually a small percent of each purchase. So if, say, you buy something for $10, they might get 60 cents out of it. Now, for many mainstream payment processors, this fee is about 3-5%, with maybe some additional cents attached. Not a big deal, right?
There’s just one minor problem, in that they’re mainstream. In other words, all of them have a clearly defined rule: No porn or sexual material. In other words, they’re inaccessible to adult artists, game devs, and others. They’re not even available to people who just do non-porn sex stuff.
Why is that? A part of it has to do with banks and credit card networks like Visa and MasterCard not wanting to associate themselves with porn. But there’s another unfortunate factor related to porn that artists don’t talk about: Fraud.
Consumers As Grifters
Let’s say you’re a married guy. You keep few or no secrets from your wife, and that includes financial bills. One day, a credit card bill comes in. She sees a charge that doesn’t look right. Vague name, oddly specific amount of money. You know exactly what it is: It’s a purchase you made to the Affect3D Store. However, you don’t want to tell your wife you’ve been jacking off to Sayako sucking off her dingaling and possibly ruin your marriage.
So what do you do? You claim it’s a fraudulent purchase, call the credit card company, and dispute the charge. After a few weeks, the charge is off the record, and you get your funds back. It’s fine, right? Except what you did is called a chargeback. In other words, you forced the credit card company to take money from the Affect3D Store and place it back into your account. We lost money, but you keep the product.
In other words, you pulled a con on us. Maybe not intentionally, but you did.
That’s probably the nicest excuse for fraud, too. Often, some “consumers” use various means of chargeback in order to effectively steal goods. It results in products ending up on PornHub, Empornium, or 8Muses with the thief not paying a dime. This even occurs with Patreon, as I have learned from several different artists.
Fraudulent porn purchases are sadly common. The fact that they’re done online, in a form of transaction called card-not-present, compounds things. It’s enough that the U.S. Department of Justice declares adult content to be a type of “high-risk transaction.” This statement is a de facto regulation. Payment processors must accommodate for high-risk transactions in order to work with banks and credit card networks. Mainstream processors simply do this by forbidding adult content outright.
Paying More To Do What You Love
So if we can’t use Stripe or Square, what can we use so that you pay for our stuff? The answer is one of the few payment processors that will cater to adult content. You may recognize some of their names: Epoch, Verotel, Securionpay.
Now, that may seem like no problem, except remember that adult content is a “high-risk transaction” for processors. So how do they address this issue? By jacking up the processing fee. Speaking to multiple sources, I found that the range for processing fees for these companies was 10-16%. In addition, some of them require you to put an extra 10% in escrow for up to six months to account for chargebacks. Suddenly, that 60 cents becomes $2.60. That adds up very quickly when you’re selling stuff: Rather than taking a loss for every 20 items or so purchased from these fees, you do so in four.
What’s more, despite this, adult payment processors lack a lot of leverage. A bank could easily still block a transaction on fraud or moral grounds. Some even go so far to demand the removal of products it finds obscene. An example of this is at our store. If we decline your card, and you have no problems elsewhere with it, it’s because the bank put a block on us. You have to call the bank and personally request they remove the block. Not exactly a fun thing to do, I must say, but there’s little we can do.
Another example: A certain artist with a paysite had to request permission to post tentacle porn from the payment processor. Eventually, they got conditional approval only. In other words, at any time they could revoke it. Imagine that: One day you get to post girls having fun with tentacles, the next you have to hide and delete everything.
PayPal: Friend and Foe
Of course, it goes further than that for us. Some will point out “I can use PayPal with Patreon, so bleeeh!” People forget that Patreon has been around for four years, but only allowed PayPal for adult content in July 2016. Why is that? Well, PayPal has…issues with us. It’s hard to tell whether or not they wish to ban us, depending on the day.
It wasn’t always like this. Back in the Wild West days of the dot-com, PayPal was pro-porn. People used that service to purchase porn. However, around the time eBay purchased PayPal in 2002, it went “mainstream” and prohibited porn-based transactions. Things took a very persecutorial turn quickly: PayPal would not only ban you, but also freeze your account and assets if they found out you were doing porn. As late as last year, they even provided a honeypot trap for new artists, preventing them from signing up.
To say it was bad was an understatement, given that PayPal remains the only relatively anonymous payment system. Many artists have been victim to scornful commissioners or trolls who rat them out to PayPal and thus lose access to important funds. It would take months for their accounts to unfreeze, and even then they were in a precarious position.
This year, things are a little better. The Acceptable Use Policy no longer explicitly forbids porn, with the vague “items that are considered obscene” and “certain sexually oriented materials or services” taking its place. But that doesn’t mean we aren’t at risk of losing what little ground we have on the service. Moreover, companies like Epoch are now accepting PayPal, which is why the Affect3D Store now accepts it as well – albeit with a 10% surcharge, which we understand may be an obstacle to some customers.
The Trouble With Bitcoins
Another option that people point out is to forget current methods and go for Bitcoin. After all, due to the quasi-anonymity of cryptocurrencies, it would be a surefire way to sell any type of porn really. Why bother working with PayPal?
The problem is that few artists really trust Bitcoin to begin with. There are many reasons not to trust it. For one, transaction fees are as high, if not higher than using adult payment processors. Just this week, Mashable noted transaction fees hovering around 10% after being much higher in prior weeks. Moreover, the person that usually pays that fee is the customer.
Second, the anonymity factor is more unsettling in businesses as precarious as ours. We would like to know who we’re dealing with when people pay us. Who is to say the money we received from BTC is actually from the person paying? We have to trust them, and that’s asking a lot from us.
Third, it’s an inherently unstable currency. With transaction times growing much longer, that’s an issue. You could spend .0125 BTC on something, and it could be less than what we receive when the money enters our account in normal dollars. We would be shorted. Fourth, customers don’t like taking extra steps when they make purchases, but that’s what you have to do when you use bitcoin. Convert your money to BTC, then pay. Then we have to convert the BTC back into dollars.
Finally, and most importantly, the trouble with cryptocurrencies is that its biggest users – anarcho-capitalists, libertarians, Wall Street, Chinese consortiums that buy up all stocks of graphics cards – treat it not as a currency, but a commodity. In other words, Bitcoin to these folks are a gold nugget, not a gold coin. Most people don’t want to be paid in nuggets though. Who trusts a nugget? That’s part of the reason we suspended direct BTC transactions at the Affect3D Store earlier this year.
What Works…For Now
All that said makes Patreon very much an anomaly in terms of adult content. Whereas other crowdfunding sources would’ve kept away from adult stuff to look good, they didn’t. Stripe, which is Patreon’s main payment processor, forbids adult content to anyone else. How did they allow Patreon to continue? It’s hard to say. What is likely is that Patreon’s non-adult content had a hand in it: According to Graphtreon, only 7 of the top 50 creators by patron count specialize in adult content. Perhaps Patreon forced them to take their lumps, so to speak.
So Patreon is at least one solution. But it’s not the perfect solution. The precarious nature of our situation with the services remains clear, and we can’t be too secure with it. But more importantly, crowdfunding services aren’t for everyone. While there are often some who successfully manage it as a tip jar, many artists face pressure to deliver a product within a certain time frame, and that’s not at all easy. There have been a number of creators who quit Patreon not because they don’t want the money, but they can’t reasonably deliver to their patrons.
Still, because of the stigma that creating lewd art of any kind possesses, it’s really hard to earn at least some money off it outside of Patreon. 3DX is an expensive hobby, as anyone can attest, so earning something off it would be nice. But as long as there is a moral quandary to selling porn, and grifters who take advantage of that to commit fraud, it’ll be tricky to do.
[Cover Image from Naama’s The Order: Part 1]
[Images Courtesy: Affect3D, Xenozoophilia, Steve Jurvetson under CC-BY-2.0 license, Coinbase]