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OnlyFans dustup gives a peek into the huge role banks play in the porn industry

September 2, 2021, 12:00 AM UTC

Adult performers on OnlyFans recently experienced a kind of whiplash when the service announced it was banning most sexual content, only to reverse course days later. OnlyFans, which has exploded in popularity by allowing sex workers to sell access to racy broadcasts, has since faced calls from performers to defect to other platforms.

Whatever the alternative, though, adult performers are still likely to be on the hook for high fees. 

At the heart of the changes, OnlyFans’ founder said, were decisions by banks to close accounts held by adult performers. The service takes 20 cents of every dollar made by performers—a far higher cut than the 1.3% to 3.5% charged for less risky businesses, depending on the card and the processor, according to merchant services comparison site Merchant Maverick. And while that is relatively high, other sites can take half or more of all earnings from online sex or strip shows.

The extensive fees come because the porn industry is beset by high levels of chargebacks and fraud, causing banks to avoid it for the financial—and reputational—risk involved. 

“These financial institutions probably haven’t found that juice is worth the squeeze,” Ted Rossman, analyst at Creditcards.com, told Fortune. “Is there a likelihood that a lot of customers would be disputing transactions? If that’s the case, that’s expensive in terms of time and money for the banks and the processors and the networks to investigate.”

OnlyFans is a giant in the adult-streaming industry. Earlier this year, it was reportedly seeking a $1 billion valuation in a financing round after handling more than $2 billion in sales in 2020. The company’s most recent statistics say it has more than 1.5 million creators on its service, with about 10 times as many viewers. 

While the company has banked its growth on adult performers, it has publicly planned to move away from adult content for some time. In June, it had reportedly told investors about growth plans that didn’t involve nudity or sexual content. And two days before OnlyFans’ sudden Aug. 19 announcement that it would ban most sexual content, it announced a safe-for-work version that had no nudity.

In first announcing the shift on sexual content, founder Tim Stokely laid the blame squarely on banks like JPMorgan Chase and Bank of New York Mellon. “JPMorgan Chase is particularly aggressive in closing accounts of sex workers,” he told the Financial Times.

BNY Mellon and JPMorgan both declined to comment. A person familiar with Chase’s internal policies told Fortune that being in the adult entertainment business alone wouldn’t be a reason for the bank to shutter a performer’s account.

OnlyFans isn’t the first company to find its business plans interrupted by money processors. Financial institutions, like tech companies in general, have drawn boundaries around controversial businesses for the better part of a decade. In 2010, companies like PayPal blocked donations to Wikileaks after the Julian Assange–led organization disclosed troves of classified U.S. government cables and videos. More recently, banks faced pressure by the federal government and consumers to limit their business with firearms manufacturers and dealers following mass shootings. And Visa and Mastercard have banned transactions with porn service Pornhub after the site was found to host child pornography. 

One of the bottlenecks for sex workers is dealing with companies that will agree to handle online transactions that are more at risk of fraud or chargebacks than a typical Amazon order. A site like CCBill, which works with adult sites, charges as much as 14.5% to process transactions from credit card companies like Visa or Mastercard, in addition to other fees. The company didn’t return a request for comment. But it says on its website that the higher costs pay for additional fraud monitoring. 

It’s unclear how services like CCBill are able to get around certain credit restrictions, though the company has offices in countries like Serbia and Malta, in addition to its Arizona headquarters. Rossman said some payment processors route purchases around the world while processing purchases, often incurring foreign transaction fees.

“This whole thing does get into the whole shrouded world of offshore accounts and websites,” Rossman said. 

Meanwhile, sex workers on OnlyFans have started to compile lists of alternative sites to migrate to, though they seem to largely run into the same problem. Some OnlyFans performers who spoke with Fortune described frustration with the financial system in general, which they viewed as stigmatizing their work. 

“In order to open my business bank account, I had to undergo multiple over-the-phone and in person interviews to meticulously describe the details of my work,” one adult actress on OnlyFans, who goes by GoAskAlex, told Fortune. “The interviewer was apologetic, but explained that ‘due to the nature of my work’ they had to ensure that my business was ‘aligned with their values’ before proceeding.”

Since opening her bank account, she said there haven’t been any problems with sending money from her OnlyFans account—except that she has to pay a flat cost for the transfer. “I am charged a $5 fee for each deposit.”

Still, some performers say that it’s hard to make a living on OnlyFans. 

Lady Vi, a dominatrix who says she’s planning to leave the service, said her highest-earning month was in June, when her gross earnings totaled $3,883—before OnlyFans’ cut. “OnlyFans isn’t as lucrative as some think,” she said. “Personally I think the 20% is more than fair, but the idea that everyone is raking in easy money is wildly inaccurate.”

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