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Explained: Mastercard’s new regulations for adult content sellers and its impact

Mastercard has long prohibited merchants from engaging in unlawful activity on its network. The firm has previously forged partnerships with groups for missing and exploited children.

In April, Mastercard had announced new "specialty merchant" regulations that would take effect on October 15. (File Photo)

The feud between companies offering financial services, like Mastercard and Visa, and platforms offering adult content have been brewing for a long time now. However, it took a drastic turn last week when Mastercard decided to update the requirements it sets for banks that process payments for sellers of adult content.

In April, Mastercard had announced new “specialty merchant” regulations that would take effect on October 15. Explaining the change, the company has blamed smartphones and fast Wi-Fi that make uploading images easy — something which has been around for a decade now.

So, what are the new regulations imposed by Mastercard?

The new rules will now force platforms and creators to abide by stricter documentation and moderation requirements. The banks will now have to ensure that sellers require “clear, unambiguous and documented consent” in adult content, the payments network said in a blog post Wednesday. The firms will also be required to ensure websites document the age and verify the identity of anyone depicted in pictures and videos as well as those uploading the content.

For example, Mastercard will now only do business with adult content creators if everyone in the content provides documentation that they consent to be in the material, to have it distributed, and to have it available for download. Platforms that host live content like cam shows must be able to watch streams and stop or block them using automated tools. Mastercard also required all content to be reviewed by platform moderators before it’s published to the site; and merchants will have to provide moderation reports on a monthly basis.

Mastercard is also asking banks to ensure that sites have a review process prior to any content being published, as well as a system for complaints that addresses illegal or non-consensual activity within seven business days. The payments network is also mandating that banks make sure that sites have an appeals process that allows for anyone depicted in adult videos or photos to request that the content be removed.

How did this all start?

The moves come after Mastercard, Visa and Discover in December said they would no longer allow their cards to be used on Pornhub after a review of the website uncovered unlawful content. This was following claims about sex trafficking on the platform from an opinion piece in The New York Times.

“In the past few years, the ability to upload content to the internet has become easier than ever,” John Verdeschi, Mastercard’s senior vice president of customer engagement and performance, said via a blog post. “All someone needs is a smartphone and a Wi-Fi connection. Now, our requirements address the risks associated with this activity.”

Mastercard has long prohibited merchants from engaging in unlawful activity on its network. The firm has previously forged partnerships with groups including Interpol and the national and international centers for missing and exploited children.

“We’re committed to doing everything in our power to ensure only lawful activity takes place on our network,” Verdeschi had said. This comes despite Mastercard being the branded card for Cabelas, a store that sells an array of assault weapons.

In August, Onlyfans, the subscriber-based social media platform, announced that it would ban explicit content from its platform beginning October — a decision which it reversed after outcry from users. Onlyfans founder Tim Stokely had said in an interview that the site was already fully compliant with Mastercard’s new rules and that the new regulations had nothing to do with the ban. He did, however, blame discrimination from banks, including Bank of New York Mellon, JP Morgan Chase, and UK-based Metro Bank for closing their accounts and the accounts of sex workers.

Adult sites have already started alerting users to changes to their terms in light of Mastercard’s new regulations. Porn site iWantClips sent an email to creators warning them about changes in content review policies in order to comply with the new rules. Those changes include a lag in how long it will take new content to appear on the site in order for the platform to review content, an even longer delay in any content that includes more than one person, and a review process for legacy content. “Repeated non-compliance violations may result in the permanent closure of your store,” the email stated.

The history of financial institutions’ discrimination against sex workers

Banks have historically discriminated against the adult industry, from platforms to individual sex workers. Many payment processors, such as PayPal, refuse to do business with sex workers altogether, as they’re considered too “high risk” to take on as customers. Banks are required to file suspicious activity reports, or SARs, when they suspect something is wrong with the money coming in — wire transfers that aren’t accounted for, money moving to and from countries where it doesn’t make sense to do so, and anything that might look like money laundering. In one of such SARs, banking major Wells Fargo had stated: “Based on the inexplicable nature of the outgoing wires, for which the original sources of funding were not known, but appeared likely to be income from the customers’ adult entertainment business, the information found regarding the customers’ business, and the illicit nature of those businesses, which are international and may be operating in areas where underage children and other vulnerable individuals might be forced to provide services, AMLI [Anti-Money Laundering Initiative] has deemed the specified outgoing wire transfer activity suspicious.” It is this mention of minors that is also common in Mastercard and Visa’s explanation banning Pornhub. There are, of course, many types of criminality and abuse that happen in and around the adult industry, but this is just not limited to this one industry. Children as young as six work in dangerous mines in order to extract the minerals that power our smartphones. As of last year, consumer goods from Apple, Microsoft, BMW, Gap, Huawei, Nike, Samsung, Sony, and others are being manufactured by re-education camp prisoners in China, according to an in-depth report by an Australian think tank.

The impact

Sex workers and activists have been trying to raise awareness about these policies and put pressure on Mastercard to reconsider them. In September, about 1,500 sex workers, sex educators, and other stakeholders had signed a letter asking Mastercard to halt the change in rules and consider that the new regulations would cause further harm and vulnerability for marginalised workers.

“Payment processors should not be dictating platforms’ content moderation policies. Mastercard’s proposal will lead to more violence and discrimination against vulnerable people, not less,” Evan Greer, director at Fight for the Future, said in a statement. “If they move ahead with this proposal and refuse to even pause to listen to more stakeholders, they are in fact saying that acceptance doesn’t matter to them. They’re throwing LGBTQ+ communities, human rights, and marginalized people under the bus. Full stop,” the statement added.

The group further stated that policies that impact queer sex workers also impact all queer content creators from comic artists and game creators to sex educators and academics. “All of society suffers from restrictions on consensual sexuality and speech, increases in surveillance, and misdirection of resources that should help the most vulnerable,” Greer said.

Similarly, another platform Sex Workers Outreach Project Behind Bars, while calling it a “war” on sex workers, said such decisions will force more sex workers into the margins. “We say ‘war against sex workers’ because the damage they do does not impact the labor as much as it affects the laborers who depend on the Pornhub platform to earn a living,” it wrote. “Violence against sex workers includes the societal and institutional violence that has led to the shuttering of our online platforms that give us a measure of safety and allow us the critical resource that is the ability to access banking.”

Moreover, while sometimes imperfect, most adult platforms already have strict moderation and consent documentation policies in place. Non-adult sites, like Facebook and Instagram, report much higher numbers of abusive material than adult sites, but aren’t held up to the same scrutiny as sites that host adult content. For instance, an annual report by the nonprofit National Center for Missing and Exploited Children stated that Facebook alone reported around 20 million instances of child sex abuse in 2020. Snapchat, by comparison, reported more than 144,000 instances, and Twitter, more than 65,000. Microsoft came in at 96,776, which includes Github, Skype, cloud service Azure, and Xbox.

Porn performers have long been dealing with discriminatory payment practices and de-platforming but have always found a way around it to continue their work. However, when the biggest credit card companies clamp down so fiercely, they are marginalised even further.

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