I used to work for a payment processor. Our upstream bank would not allow us to handle any adult content at all. The justification used is that adult content is too risky because of chargeback rates.
Apparently the chargeback rates on adult content is really high. Anecdotally, it makes sense. You buy the nude pics, your husband sees the charge on your card, "I was hacked" boom, chargeback. You buy the nude pics, do the nasty alone in your room, have some regrets once the pressure to do the nasty is gone, try to get a refund, get refused, boom chargeback.
I'm not sure that quite holds up in our post-Pornhub world, where everyone is openly admitting to using porn these days. But banks are conservative (in all the ways) and slow to change.
That's not the real reason (source: used to work in adult).
High chargebacks in high-risk industries are related to three things:
1) The goods are digital and delivered immediately. This means that if I just got a hold of a 100 stolen CC numbers and want to test whether or not they're legit before moving on to physical goods, I'm going to test them out at one such service - which shoots up the CB/refund rate.
2) This also creates a secondary market for illicitly opened accounts / access, which is easy money (and anything else you can imagine down the lane on piracy etc.)
3) Because the margins are so low due to high marketing costs + competition, many sites (especially in the past) would sign the user up to endless recurring billing schemes which are nigh impossible (or costly) to cancel, also driving up the chargeback rate.
Yes this is true. Also most porn subscriptions have "cross-sales" meaning you get signed up to another subscription when you join the first. This leads to higher chargebacks.
I run product for Pornhub Premium, we have a clean, no cross-sale offer and it's very easy to cancel, our chargeback ratio is near 0.
Apparently the chargeback rates on adult content is really high. Anecdotally, it makes sense. You buy the nude pics, your husband sees the charge on your card, "I was hacked" boom, chargeback. You buy the nude pics, do the nasty alone in your room, have some regrets once the pressure to do the nasty is gone, try to get a refund, get refused, boom chargeback.
I'm not sure that quite holds up in our post-Pornhub world, where everyone is openly admitting to using porn these days. But banks are conservative (in all the ways) and slow to change.