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Patreon greenlights Paypal for NSFW creators

Patreon’s announcement  — in an e-mail to creators — that it will once again be able to offer its users to use Paypal to pledge to NSFW creators is a huge victory for the crowdfunding service. Patreon had to remove Paypal functionality for creators who were offering NSFW content after Paypal threatened to stop all payments to Patreon.

Why’d they do that? It’s not a moral issue. It’s an economic one. From the standpoint of Paypal, an adult-oriented website is problematic due to the high volume of contested charges. What’s a contested charge? Take for example someone whose spouse questions an adult-website charge on the family credit card prompting an immediate defense of “I didn’t do that! There must be some mistake! One of the kids! Identity theft! Wandering bands of marauders!” They file a complaint with their credit-card provider which, of course, sides with its customer. The money is returned to the customer by the adult website — in a process called a “chargeback.” It causes additional transactions, processing time, and record-keeping.

As a result of all of those shenanigans, adult websites face annual fees of upwards of about $500 — as well as higher processing fees — from credit-card processors. They’re considered high-risk merchants. And when Paypal found out there was NSFW content on Patreon, they made the move to classify the crowdfunding service as “high risk.”

From Patreon:

“Unfortunately, this is a common issue in the payments industry, both because payments for adult content are subject to a higher rate of chargebacks, and because of an aversion to the content itself among some payment processors.

After many long discussions we were able to convince PayPal, or more specifically their subsidiary Braintree, that Adult Content creators on Patreon are not a serious risk. Our content policy, and the nature of subscription payments, means that Adult Content creators on Patreon are less risky than most creators making adult content. We also have a very diverse mix of content types, so even if our Adult Content creators are higher risk than other types of creators, Patreon as a whole is less risky.

We are very happy about this victory, but the payment industry does not provide much transparency around payments for adult content. As a company we are not happy with this lack of transparency since it impacts the livelihoods of Adult Content creators. We will continue to work towards more certainty around these issues, but for now we feel that the benefit of allowing PayPal payments for Adult Content creators outweighs any hypothetical risk that it may change in the future.”

Patreon also made the following announcement:

“We have changed the name of our NSFW flag to Adult Content. This change, along with better onboarding and help documentation, is to help creators understand when they have to flag themselves as Adult Content, as well as removing the not-so-loved “NSFW” title. We are also continuing to clarify what content is acceptable when flagged as Adult Content and what content is not allowed on Patreon.”

by Brad Guigar on July 12, 2016
Posted In: Marketing / Social Media
└ Tags: NSFW comics, Patreon, Paypal
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