Why Does the Adult Industry Have Problems With Credit Card Companies?

Adult entertainment workers and the companies that cater to them are subjected to a number of unfair and unequal practices that constitute financial discrimination against the industry.

These practices, which make it harder for the industry to access financial services and resources, are caused by rising entry barriers, expansion, and short- and long-term economic stability. While we have discussed financial discrimination before, we will go into even more detail in this piece on the added complexities of financial discrimination that the adult industry as a whole has to deal with. The Adult B2B Marketing blog team will give background information on the topic of ongoing financial injustice against our sector.

Many financial institutions, particularly traditional institutional banks, are reluctant to provide any banking services to individuals and firms involved in the adult entertainment industry due to perceived reputational risks. Because of this, adult entertainment businesses encounter difficulties with transaction processing, money deposits, and gaining access to essential financial services such as credit lines and loans. Without sufficient financial assistance, many businesses may struggle to manage their finances well and may have problems on a daily basis. Because of this, sex workers face discrimination from banks as well, which can lead to account closures and claims that being employed in the adult entertainment sector is a “high risk” job.

Processing payments is a big problem for the adult entertainment industry. PayPal and Stripe are well-known payment processors with strict policies against accepting payments for sexual content. Adult entertainment businesses confront significant obstacles because it is tough for them to find workable payment processing solutions. Without efficient payment processing solutions, these businesses risk missing out on potential sales and revenue streams, which would impair their ability to maintain financial stability. Notable credit card companies are also at fault. Sex Work CEO, the website founded by activist and pornstar MelRose Michaels, and the Free Speech Coalition, a trade association for companies in the adult entertainment industry similar to ours, worked together on an important white paper on financial discrimination.

Mike Stabile, director of public affairs at the Free Speech Coalition, states that “the pervasive financial discrimination against the adult industry is devastating to our businesses and workers.” Financial institutions are exploiting those who work in the adult business, whether it’s by charging exorbitant fees or seizing funds without cause. This study illuminates a reprehensible habit, according to Stabile. On our podcast, Adult Site Broker Talk, Stabile and FSC Executive Director Alison Boden have both been featured. Nearly two out of every three adults who work in the field reported losing access to a bank account or other financial resource, according to the survey. Of those surveyed, 40% said they had recently closed a bank account. Furthermore, the report asserted that the issues adult businesses and employees face when it comes to financial products—such as credit cards, insurance, mobile payments, banking services, and loans—are unique and have never been fully documented in an analysis this transparent that shows how banks and other major financial sector players affect censorship and sexual speech.

It should be mentioned that not all individuals or financial institutions treat persons who perform in adult entertainment differently financially. However, the institutional biases, societal stigmatization, and industry dynamics previously highlighted are what lead to the challenges and discrimination performers experience when trying to access financial services, stability, and opportunities. The topic of sex employment will always be up for discussion.

Financial discrimination against the industry has an impact beyond its financial hardships. It contributes to the marginalization and stigmatization of people involved in the industry on a personal and professional level. Unfortunately, by denying small businesses access to traditional financial institutions and erecting additional obstacles, society perpetuates the notion that our sector is intrinsically unlawful or undeserving of respect. Fairness, though, is crucial. The participants’ financial well-being is impacted by this social stigma, which also contributes to the cycle of discrimination and exclusion. Notable steps to end financial inequality are progressively being implemented in the adult entertainment sector. An increasing number of payment processors and financial institutions are keen to work with adult industry companies and are starting to realize that more inclusive regulations are necessary. One potential legislative remedy is offered by the Free Speech Coalition.

Republicans in Congress introduced the Fair Access to Banking Act to codify the previous “Fair Access Rule” that was issued during President Donald Trump’s administration by the Office of the Comptroller of the Currency (OCC), a relatively obscure division of the U.S. Treasury Department. The Fair Access to Financial Services Rule, created by the Trump OCC, prohibits the nation’s largest banks from turning down loans to some of the most divisive industries, such as adult entertainment. Banking Dive claims that the bill would have made it unlawful for banks with assets of above $100 billion to provide any services to companies engaged in the hazardous industries of producing energy, running private prisons, and producing firearms. But after Trump lost the 2020 election, the rule was reversed by President Joe Biden’s nominee to lead the agency due to opposition from the banks and other organizations who felt the OCC had overreached its authority.

The Fair Access to Banking Act has the support of the Free Speech Coalition. Trade organizations including the National Pawnbrokers Association, the Blockchain Association, and the National Mining Association all support the legislation, despite the fact that it was designed to counteract the so-called “woke corporate cancel culture.” The legislation is supported by other groups as well, including right-wing groups like the National Rifle Association and the National Shooting Sports Foundation, which may not necessarily agree with the Free Speech Coalition’s objectives.

Regardless of the industry or political purpose, there is interest in ensuring that everyone in the country has equitable access to financial resources. We’ll keep an eye on the financial discrimination against the adult entertainment industry worldwide.

Visit the Adult B2B Marketing blog for more information.

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