But when you think about it, this setup skips past important legal protections like due process and the presumption of innocence. It's like the government has quietly asked Visa and Mastercard to play judge and jury.

Quoting a relevant paragraph from the AML post above: Much like KYC, AML policies are recursive stochastic management of crime. The state deputizes financial institutions to, in effect, change the physics of money. In particular, it wants them to situationally repudiate the fungibility of money. (Fungibility is the property that $1 is $1 and, moreover, that you are utterly indifferent between particular dollars.) They are not required to catch every criminal moving money (that would not be a positive result!)

Normally, if the government suspects you of money laundering, they build a case and bring it to court. The burden of proof is on them to prove you’re laundering money or selling illegal goods. Here, they found a way to not only lessen their work load by deputizing private companies, but also affectively gave payment processors a moat and impunity to decide what people can and cannot sell everywhere.

Visa and MC are well within their rights to deny any person for any reason, but the government should have their own processing network. My gut is saying this will never happen since Visa/MC would lobby heavily against it. Even if one is created, expect it to be neutered.

True, but as payment networks take on a more utility-like place in society (I'd argue they're already there), we shouldn't allow them to discriminate for arbitrary reasons.

Not government per se but isn't this what FedNow is all about?

https://www.nerdwallet.com/article/banking/fednow

What strikes me is how much financial information I had to provide them. Bank accounts, salary slips, savings accounts, etc. I am more than happy to provide that information to my government in the course of, say, a tax audit, but handing it off to a private company abroad just to buy a few shares is not proportionate. And who else will have access to that information? Is it going to be sold to the highest bidder?

The goverment is outsourcing its policing duties and, sooner or later, that will come back to bite us all when a leak outs all this information.

I agree that perspective might have been misplaced, but the founders were not in favor of powerful oligopolies under the control of the government.

Valorization aside, let's remember that the US has only been close to a majoritarian democracy for the last ~70 years or so. We can't necessarily look at the intentions from 200 years ago to decide on how political structures should be made, but we can observe their successes and failures.

(Poe’s law, take it as you want.)

Whereas gold in the ground is shiny rocks in the ground. You can say, wait out a tax on gold by burying your gold.

Hint: We’re globally headed to The Collapse (with capital C) now. See climate change, resource scarcity, water depletion, or just ecological overshoot.

Unfettered electronic currency has not shined a light on honest arbiters

or are you suggesting something more broad: that in the chain of cause and effect that eventually effects a crime, only the “last” party should ever be held responsible? e.g. anyone can sell weapons to anybody, only the person who pulls the trigger should be legally responsible? in this case presumably it’s legal to hire a contract killer, the only illegal part is the killing itself, and a skilled contractor could probably shift that final act onto the victim as well.

If the payment processor knows what your contract is for, it should have an obligation to report it to you. If the payment processor knew the transaction was for contract killing then it should have an obligation to report it to the authorities.

> are you suggesting something more broad: that in the chain of cause and effect that eventually effects a crime, only the “last” party should ever be held responsible?

No, I think that some parties between the "first" and "last" should be indemnifiable because they provide neutral services that everyone relies on for legal purposes. Without proof that a contract between two parties is illegal, it should be permitted.

Do you have any idea how many employers have unenforceable clauses in their contracts? If you think that payment processors should be held liable for criminal contracts then perhaps we should hold payment processors and banks liable for criminal contracts of all employers.

This is the difference.

1. The accused party must be aware of the perpetrator’s intent to commit a crime

2. The accused then took action to help or encourage the perpetrator in carrying out their intent

If both are not met, the accused person cannot be held criminally liable. I’m sure each of us have met a single one of these requirements in isolation. For example, if you watch a crime happen, you likely met #1 and if you helped out a random stranger and the help you rendered later assisted them when committing a crime, you met #2.

We as a society agree that just the act of solicitation for murder is crime, one that is totally separate from a murder charge. It is also a crime to sell a weapon if you are not licensed to do so in some jurisdictions.

A lot of legal theory revolves around the concept of “mens rea” (which itself has four levels: intent, knowledge, recklessness, and negligence), and “actus rea” which is the subsequent action as a result of the accused’s state of mind. Entities that act as a common carrier are shielded from this because their position in any transaction precludes any knowledge of the specific details of what they are facilitating.

This isn’t even about individual transactions. The situation here is more like them saying, “your business has characteristics in common with the kind of a business that might facilitate a contract killing and we’re lazy so we just aren’t going to do any business with you at all”.

You are not "aiding and abetting" by handling the money. There's already a well-established body of law outlining who is and is not culpable for a crime. We don't need to debate it from first principles here.

Same with postal service, etc.

Uh, guys, this is not true.

This is not how any of this works.

Don't let these people on HN mislead you. Even the postal service cannot knowingly deliver a bomb to a target and claim immunity. It doesn't work like that. If you know they are committing a crime, then you have to stop them. Or at a minimum try to stop them.

The training materials are approved by the federal government.

It’s technically a crime for them to repeat what they hear, including to law enforcement.

Some narrow exceptions apply, such as when the telecom company is committing a crime.

But technicians who have to listen in on calls (I don’t know if this is a thing anymore), are instructed to never report crimes they overhear.

Fun story about the electronic toll pass, which I refuse to use and as a result get to places slower by never taking a toll road, in over 20 years.

We had tolls. You throw a couple of quarters in, and you go on your way. They were replaced by the electronic toll tag. Which is linked to your name, your credit card, and keeps a timestamped transaction history, forever.

There was a custody battle, and the divorced husband got the kids. The court looked at the wife's toll records, showing she comes home from work real late, and that would impact the quality of life for kids. Boy, I bet she never thought she'd lose her kids by using a toll tag. I bet she did think after the divorce she'd have to start coming home earlier and probably set it up with her manager. We'll never know.

Thing is, it should have been an anonymous electronic RFID wallet you reload, to replace the function of the quarter coin, and it became a government tracking device attached to your car.

Now answer me this: is your ISP responsible for you downloading that torrent full of child porn? Well, that's probably a bad example. Is Cisco, the maker of the network switch that ISP uses, legally responsible for it?

Do you have a source for that? Google wasn't being helpful.

Here is an article https://www.wbez.org/stories/how-your-private-illinois-tollw...

"many of the requests for I-Pass records in civil matters were divorce cases"

This is from the first search result linked in the other reply.

"In child custody disputes, a parent who believes the other parent is not fulfilling their parental duties may use this data to establish the parent is not caring for the child. A parent may use the data to establish the other is not with the child, but instead on the road headed to a different location, such as a race track. The parent who believes the other is not meeting their obligations may be able to use this information during custody litigation or as support for a modification to an existing agreement"

"“We routinely utilize I-Pass records in discovery,” says Maureen A. Gorman, a divorce litigator at my Chicago law firm."

Now, let me spread some more anger, because let's face it, people love being angry. Road tolls were supposed to be temporary, to finance building the roads. They were never supposed to stay permanent. Toll revenue is more than road maintenance. In fact, over 50% of toll revenue, is redirected to other uses, and increases close to 100% per decade. Some of it is used for mass transit - so people in cars, pay for people on the subway. Many toll roads (and city parking meters, and red light and speed cameras) are run by private companies, with taxpayer-paid city staff enforcing that private corporation's profit.

What can you do? Only thing I've found is to not participate, at a great inconvenience to yourself. No, I don't use city parking meters. I pay way, way more, for private parking - although I'm only in a car a few weeks per year, usually in a work-paid rental. The benefit - for me - is to fall asleep fast, without laying there for hours in the dark getting more and more pissed off at things I can't fix.

If you think something might be for human trafficking, you report it to law enforcement and let them deal with it. They'll gather evidence, build a case, make arrests, and hand things off to a DA/prosecutor who will file charges. Or, at some point, someone will decide it's not human trafficking, or at least that there isn't enough evidence to prove it beyond a reasonable doubt, and drop the case.

All that is just due process, and a payment processor should not be given that responsibility. Both because I don't think they'd want it (it costs money and carries liability), and because we shouldn't trust them with it (private corporations shouldn't be allowed to apply the force of law).

It's a thought experiment. There are surely cases in life in which you know for sure that crime is being committed. What you're asking for though is that due criminal process be a part of denying a payment. Which seems extremely heavy handed.

If my payment processing company doesn't want to help sell guns, or help with human trafficking, or hell, doesn't want to support the meat industry, then I should be able to run my business according to those ethical choices. My company isn't sending someone to jail. They are just refusing to accept a payment. There is no need for due criminal process to refuse a payment.

Should it be illegal to start a vegan payment processing company?

These are the cases of having evidence, right? Which should be reported.

> I should be able to run my business according to those ethical choices. My company isn't sending someone to jail. They are just refusing to accept a payment. There is no need for due criminal process to refuse a payment.

And if two or three large businesses cover 99% of a given market (payment market), how about some anti-monopolistic legal protections? Them colluding to stop the meat industry, continuing your example, would be a monopolistic practice.

Yes, that's the actual problem. Breaking up the existing near-monopoly and creating a functioning market with thousands of competitors would be a far better solution than trying to force the existing payment processors to process all payments, regardless of risk or ethical considerations.

This doesn’t work when it’s something basic like payment processing. It’s the same reason we decided as a society that people can’t “trust their gut” and deny housing to people based on the color of their skin.

Running a profitable online business is not even a basic human right. No one owes you payment processing. Forcing someone to be a supplier to a hate group violates their basic human rights. If payment processors were discriminating against a protected class such as race or age then you might have a point.

Banks right now are denying transactions because they ‘know’ it’s fraud, based on ML models and probability and no other evidence.

If you require someone to not ‘know’ something until they have enough evidence they could prove it in court, they won’t be able to function. Even investigators don’t have to meet that bar.

But "people" cannot use that knowledge to deny access to money to other people if they don't have evidence that can stand up in court. Yet banks can. That is wrong. That is giving banks too much power without accountability. Yes, some of the entities they cut off will "deserve it", at least in your eyes; but many others won't. We already know how this plays out: it's the same every time a centralized entity wants more power. They claim it's to "protect" us against something, but it's really just to enrich them at our expense. Don't take the bait.

Banks are doing this at the behest of the gov’t.

Oh, and those sanctions and the like - what do you think they actually look like paperwork wise?

You seem to be arguing that what is, isn’t?

If you want to say that what is, is bad, then hey I’m not arguing against that! I’m just pointing out what is going on right now in front of us, and has been for a very long time.

I don't know. You used the word "people", not me. If you just meant "banks", it would have been clearer to say so.

> Banks are doing this at the behest of the gov’t.

Yes. That doesn't make it right. The government should not be allowed to deny people access to money without due process either.

> You seem to be arguing that what is, isn’t?

No, I'm arguing that what is is not what should be.

> If you want to say that what is, is bad, then hey I’m not arguing against that!

Good! That wasn't clear to me from your previous post. If you agree that what is going on now is bad, then we're in agreement.

KYC and AML laws require private corporations to deny people access to essential services for arbitrary reasons, without due process. These laws are garbage.

I don't think anyone is arguing that what is, isn't. They're arguing that it shouldn't be.

Would you be okay with the police being allowed to randomly enter your home and seize whatever stuff they want, just because they have a hunch? Or would you rather they have to get a search warrant first, which requires at least some form of evidence?

You might also want to look up ‘exigent circumstances’ and ‘parallel construction’.

Similarly, a payment processor shouldn't be allowed to deny a transaction because they "know" it's human trafficking. Evidence of such a thing should be given to law enforcement, and due process should determine what, if anything, is done.

Such work is paramount in order to maintain the foundations of an accountable society. The alternative being suggested here is no better than witch hunting in the worst case, wherein certain groups/classes of people are barred from doing their business online just because of the sensitive nature of a given topic. (drugs/medicine, pornography, gambling, political donations, etc.)

And frankly, you can’t run a business meeting the judicial bar required to really he sure, not that the courts are usefully right here either. Did OJ Simpson murder Nicole Simpson and Ronald Goldman? That depends on which court you ask, and how many asterisks you’re willing to allow on the answers. And that took 10’s to 100’s of millions to get there.

The banks get the ‘privilege’ of being fined for transactions that occurred and were later judged ‘bad’ based on the results of a in-depth, very expensive investigation after the fact that determined they didn’t try to ‘know’ well enough who they were dealing with.

Pretty cozy for regulators. Pretty impossible position for banks.

Not for services deemed important enough:

> U.S. Supreme Court on Monday rejected an appeal from Kim Davis, the former Kentucky county clerk who cited her religious beliefs in refusing to issue marriage licenses to same-sex couples

https://en.wikipedia.org/wiki/Operation_Choke_Point

But the thing is that there isn't much incentive to do this kind of skulduggery, because the companies are only protecting themselves from lawsuits and protests when they ban businesses, but imposing high processing fees would probably not satisfy the would-be tyrants who were trying to force these "bans".

Obviously, the answer is to disallow that.

And if people break the law, and do it anyway, by trying to be "clever" then a judge and jury can punish them.

This punishment works especially well, with this thing called "discovery", in which the legal system can parse through your internal communications, to see if you are intending on defacto banning it.

> It would be challenging to stop without mandating some explicit formula too

No it wouldn't be.

Just do it, like we do many other laws. Give a vague description of whats not allowed, and let the jury figure it out. And give a large fine if they lose the court case.

That's enough deterrence to stop people from gaming the system. Just give them a huge fine if they try to do that.

If you mean "those in power who can and do make decisions that a majority of voters wouldn't actually support", then sure, I think that's the case, but that doesn't make it right, and that doesn't make it inevitable, either.

YMC/AML has been this way since shortly after 9/11 (aka 2001).

The level of outrage from the voters is…. Tepid.

Will it change at some point? Sure. Not seeing it happen anytime soon though.

Or does someone have to sit down and write a law or regulation that says "the risk for providing payment services to an online pornography company is X, and thus the processing fee is Y%"? I guess that could work?

Ie make it legal for the provider to report it, perhaps anonymously.

Transactional sex might not be something you want people drawing lines around with financial regulation, but usually people have a line.

There are other mechanisms to target illegal actions, such as sending the police to arrest the person. Those actions are guarded by due process and the right to trial.

Using the financial system to target people is not.

We're talking about whether it's worthwhile to say something like "hey, maybe we will not allow legal markets for some things (say, murder) in our society" on top of "maybe we will ban make some activities crimes (say, murder) themselves."

Do you believe markets for murder should be legal?

If you try to hire someone for murder, then the police will arrest you and throw you in prison.

Forcing every private company to operate as an additional police force, judge and jury is incredibly dumb and dangerous.

Do you believe private corporations should be in charge of deciding -- with no oversight or ability to appeal -- whether money changing hands is for a legal or illegal purpose?

I guess "yes" is a defensible answer to that, but for me it's a hard "no". As flawed as the US justice system is, I prefer due process over arbitrary action.

Does postal system open every envelope to see if there is cash inside sent as an illegitimate payment to someone? Because it's easier to do it online should not be the base for justifying it.

Would you be happy if your email provider scanned all your emails using ML systems to detect illegal activity? For some reason we value the privacy of our communication more than other types of transactions.

You're thinking about this as if the question is simply about whether or not payment processors should have the job of examining every individual payment. There's a potential discussion to be had there, but that's the only dimension of the topic, and one of the things we're talking about entire classes of activity.

If prospective clients like "Assassination Central" or "Doordash Blowjobs Inc" approach you as a payment processor, you might have some idea of what's going to happen. And in general payment processors have both an incentive and regulatory obligations to understand what kind of business they're facilitating, not to mention whatever individual inclinations they might have.

When it comes to something like Venmo, I'm not really sure how to handle that. I suspect invasivity isn't the only issue, it's also probably practically difficult to police effectively, but at the same time, if there were means by which reasonable correlations could be made, it's not clear to me that there's no activity whatsoever for which there's a case for flagging, however controversial which cases meet that criteria might be.

Should it be illegal to start a vegan payment processing company that won't allow butchers to be paid through them? If so, then why should it be illegal?

That's about the business implications, not about moral ones as the comment I replied to was asking about. Completely different argument.

And there are also cases in which you can clearly know something is illegal. Someone purchasing guns in a country where guns are not legal doesn't need a judge, jury, and court process for a payment processor to decide they don't want to be involved. It's not arbitrary. And your right to make purchases using a credit card is not a basic human right.

In reality I don’t think there is any chance of a law requiring payment processors to process all legal transactions and definitely nothing about illegal transactions. If that were a possibility, I would back off my statement that they should be forced to process illegal transactions.

how do you know with 100% certainty/due process that this is indeed the case and it's not just your ML algorithm going crazy?

people can also pay with physical money if they desire to do so.

As for moral lines you are curious as to what people will and won't cross, those lines will be different for different people, and that's exactly why we shouldn't be putting these sorts of decisions in the hands of random unaccountable corporate employees (or, again, worse, algorithms).

You clearly want someone to say "no, of course I wouldn't allow a transaction to go through if it was for a hitman contract". But what if someone said "I see no problem with contract killings; I'd let it through"? That person could be working at Payments R Us, and clearly we don't want someone making that decision! So take it out of their hands.

The contract killer is of course an extreme example, but we already have real-world examples discussed here that illustrate the problem with this. Pornography is legal, and yet payment processors boot online porn companies from their networks. Someone who thinks pornography is immoral might have made that determination (I don't buy the "high risk of fraud" argument; you can always control for that with higher fees). Regardless of how you personally feel about pornography, do you think it's ok for a company to deny another company access to a big chunk of the financial system for entirely legal activities, just because they don't like them? I would sincerely hope that we can agree that sort of thing is bad.

A vegan credit card that only works at vegan companies should not be illegal.

> to a big chunk of the financial system

Here's the actual problem! We have a handful of giant payment processors that make up a near monopoly. That's the problem you want to fix. More competition and more choices (e.g. vegan credit card) means you'll for sure find a way to pay for your vegan porn.

> That person could be working at Payments R Us

I'm not talking about employees making a decision. I'm talking about the owners of a payment processing company being able to decide on a policy that is applied to all customers.

I'd bet that orders of magnitude more people die because of cancer caused by cigarettes and in episodes of domestic violence or traffic accidents caused by alcohol abuse than the number of people assassinated by hit killers hired online and paid with credit cards.

So at this point we agree (as a society at least) that some businesses should not be allowed to conduct business according to their ethics, but instead must do business with anyone who shows up at their door. At this point it's just a matter of deciding which businesses that rule should apply to. I would argue that payment processors are approaching utility-like levels of essential use in our society, if they aren't there already.

This is due to a physical limitation. Payment processors have no such physical limitation.

> I would argue that payment processors are approaching utility-like levels of essential use in our society,

Correct. And the problem is not that they are utility-like essential. But that they are a near monopoly. There is zero reason for payment processors to be a near monopoly and that's the actual problem that needs fixing.

it shouldn't be my decision whether i want to allow the transaction, even if i wouldn't want to allow it. i'm not in a position to perform due legal process to determine whether you're indeed being paid for a hit job.

the provider should be in a neutral position.

The problem you're trying solve is caused by lack of competition and near monopoly players. The fix isn't to force those businesses to ignore ethics. The fix is hugely increasing the competition.

No, it's not. It's literally the facts on the ground.

Additionally, it's telling that you used the term "unethical" rather than "unlawful". Whether or not a credit card works should have nothing to do with someone's arbitrary ethics.

It's literally not. Your claim is that I suspect the local butcher sells meat rather than knowing that they sell meat. If my vegan friend doesn't want to do their accounting, that should be within his basic human freedoms. He's not the only accountant in town and the butcher will surely find an accountant who enjoys eating meat.

> Whether or not a credit card works should have nothing to do with someone's arbitrary ethics.

It shouldn't be illegal for someone to start a vegan credit card that only allows purchases at businesses that don't kill animals. More choice is better and you want to make all payment processors follow a one-size-fits-all rule. That's the opposite of the direction we should be pursuing.

The real problem is the near monopoly control of the handful of payment processing giants that currently exist. Fix that problem and increase the competition and offer more choice and you no longer needs to force payment processors to be neutral. Forced neutrality in the end means the government decides. Which makes sense in a handful of cases, but not when markets can do a better job.

you should pass the transaction, as you should be in a neutral position.

edit: to clarify, payment providers/processors nowadays are a core utility function in our society. imo this is not something you can consider a regular private business.

would you like to no longer receive water or electricity at your home because your utility companies don't like you, despite (being willing to) paying the bills like any other citizen?

You actually think that there are certain situations where it is OK to force basic utilities to transact with everyone.

You just disagree where exactly the line is. But at the end of the day, yes you also agree that some companies should be forced to engage in certain transactions.

I wasn't really expecting you to engage with the point in any way. It is so rare that people do.

The fact remains that you now admit that yes you want to force certain businesses, specifically utilities, to sell to people, and this contradicts your previous statement.

You even did one of the most effective forms of non engagement, where you say "you can have the last word" thereby making it so either your statement remains unchallenged, or making it seem like you "win" because I responded, which is what you told me to do.

> non engagement

I didn't say I'd never speak to you again lol. Just that this topic is over because you can't seem to discuss it in a way that doesn't include personal attacks. Not interested in that style of debate in the least.

If you “know” the money is for a hit job, you contact the FBI or local police and they can mobilize protective services and arrest forces.

Of course you contact the police in the situation I described. Do you accept the payment though or do you refuse the transaction? You keep avoiding a specific yes or no question.

There is a massive difference between "unethical business" and "illegal business". As banks provide critical infrastructure, they should absolutely not be allowed to refuse business they consider "unethical", just like a power company should not be allowed to cut someone off because they think they are behaving "unethically".

As to "illegal business", the simple fact is that the bank doesn't know enough to make a meaningful distinction. It is simply impossible for a bank to know for a fact what a payment is for. They only know the source account, the destination account, the payment value, and a user-provided description. That's just not enough data to make a decent judgement. Plenty of jokers out there who will label their rent transaction as "extortion payment", after all.

Sure, if they have reasonable suspicion they should forward the information to the police, but they should not be allowed to block it unless given a court order.

Can you explain the massive difference? For example, easy access to guns is legal in a handful of countries and illegal in most countries. Where it's legal to easily obtain guns but also illegal to buy alcohol on a Sunday, what does that imply in terms of ethics?

> As banks provide critical infrastructure,

There is no physical limitation - like a local electricity generator - that requires this "infrastructure" to be dominated by a few huge companies.

> the simple fact is that the bank doesn't know enough to make a meaningful distinction. It is simply impossible for a bank to know for a fact what a payment is for.

That's wrong. The bank reasonably knows what I'm buying from Porn Hub or the local butcher. Even if they don't know exactly what I'm buying, they do know how the local butcher generates the bulk of its profits.

What you're suggesting is that it be illegal to start a vegan credit card - only works at businesses where they don't harm animals. What we need instead is more choice, not less choice. Break up the near monopoly and reintroduce competition and you fix the actual problem - which is that a handful of payment processors can collude against a business or industry.

Banks do know enough to price in risk. And there is your problem. They must be allowed to price in risk and if they are allowed to do that they can effectively deny business by making the price too high.

PayPal isn't a bank but does payments. The real problem is there aren't enough alternatives like that. The solution to banks having so much power is to give them more competition.

Another possible solution to banks having so much power is to regulate them more. I know a lot of libertarian types don't like that answer, but it is a valid answer.

It means you have far more choices in who to give your business to. For example, in a big city you can eat at thousands of restaurants. Or cook at home. However, I cannot choose from thousands of payment processors. With more payment processors competing for my business, I would get a better product and more choice.

> Another possible solution to banks having so much power is to regulate them more. I know a lot of libertarian types don't like that answer, but it is a valid answer.

I'm firmly not libertarian. Not even close. But I don't like to pull out the regulation stick until we see that more competition and a functioning market can't solve the problem. Since these transactions are now all digital, the potential for highly functioning markets has barely been explored.

So it should be illegal to start a vegan payment processor? Breaking up the current near-monopoly and giving you more choice would give the maximum possible freedom to everyone including you.

> unaccountable private corporation with that responsibility.

That's the beauty of a functioning market. With lots of choice the corporation must either be accountable or lose your business. The real problem is that you currently don't have much choice due to a non-existent market with almost no real competition for business.

However I find the argument you're posing apparently in favor of allowing a business like Visa to decline transactions on ethical grounds to be missing some important rigor. It's honestly kind of boring to argue about very clear-cut and extreme example like a credit card payment that is clearly for a contract killing. That's not where the meat of the issue lies.

If you'd like to make the argument that a business like Visa should decline transactions based on the ethics (as opposed to legal & financial risk, which appears to be how they do it now) of that transaction, then I think you need to come out of the gate with a bit more rigor. Here are the questions that immediately come to mind for me:

1. Can we agree that the rules applied to a multinational corporation with billions in income utilized by hundreds of millions of people on a daily basis to exchange legal currency for goods and services should be different than the rules governing the bakery down the street?

2. If yes, then within the context of multinational financial corporations, what is "ethical"?

3. Who decides what that definition is for a multinational financial corporation?

4. Is that definition industry-wide or specific to a corporation?

5. Is a corporation expected to hold to a consistent definition of "ethical"? If they are, how is that enforced?

6. If a corporation is not required to hold to a consistent definition of "ethical", how is this different from "for any reason or no reason at all"?

7. If an individual's small business is deemed "unethical" by a monopoly or near-monopoly, such that it is impossible _in practical terms_ for the business to exist based on an extralegal decision by a multinational financial institution, should there be any recourse for that individual? What would that be? Over what timeline could it be reasonably accomplished?

8. Remaining firmly in the context of applying your above answers to multinational financial corporations: how do your answers create a net boon for society? Who is likely to benefit from your policies? Is there any apparent harm from your policies? Is that harm a net boon for society? How and why?

Without some thought put towards these questions, or ones like them, your (apparent, there's not a lot to go on here) proposal of universal ethical freedom for all businesses looks a lot like "unlimited freedom without regard for how that unlimited freedom affects others." Which, if you are seriously putting that argument forward, I'd like to circle back to contract killing and ask what damn right does Visa have to limit one's freedom to run a contract killing business?

Yes. The core of the problem is the near monopoly that the small list of current payment processors have. As an aside, these companies have less global control than someone from the US or Europe might think.

2. If yes, then within the context of multinational financial corporations, what is "ethical"?

A vegan credit card is entirely reasonable. Any ethical stance you want to take is reasonable. As long as you fix the actual monopoly problem.

3. Who decides what that definition is for a multinational financial corporation?

It shouldn't matter if you fix the actual problem.

Etc.

Solving the actual problem instead of the perceived problem very often answers a bunch of doubts all at the same time.

> I'd like to circle back to contract killing and ask what damn right does Visa have to limit one's freedom to run a contract killing business?

The same right that I have to not be a contract killer. If your contract killing business can't find enough suppliers - be that the killers themselves or the payment processor - then that's a problem that no one should be compelled to solve. You don't have a basic human right to run any business you choose and force others to be suppliers to your business.

But even ignoring ethics, I don't think multinational corporations should be unilaterally deciding on questions of law, either. I don't think they will ever make legal determinations based on any sufficient amount of rigor, either. Sufficient in this case, to me, is "would be the same decision reached by a court of law after engaging in due process". And even if they could theoretically apply that level of rigor, why should we trust an unaccountable multinational corporation with that power?

> I don't think multinational corporations should be unilaterally deciding on questions of law,

They aren't really. Deciding to refuse a payment is not jail time. The business can also accept cash.

I never said to attack the ability of someone to function in society. That's a side effect of a near monopoly. The actual problem is that a handful of companies control payment processing so it's easy for them to act together. The fix is more freedom not less freedom: far more companies that process payments and more choice. This allows companies to choose who they do business with and customers to find a payment processor who allows the types of purchases they like to make.

I don't think it's unreasonable for a payment processor to refuse to allow gun purchases. Or that it should be illegal to start a vegan credit card. Likewise it's not unreasonable for a payment processor to accept even very high risk businesses and make that their claim to fame. The fix in this case is to break up the monopoly and reintroduce competition.

If not, then you have no place making it. And I would argue that even if you do, you still have no place making it, as unaccountable private corporations should not be given the ability (or requirement) to enforce law.

Certainly we can legally require you to report suspicious transactions to law enforcement, but it should be up to people bound to follow due process to actually do something (or not do something) about it.

I think a reasonable compromise might be to allow payment processors to put a transaction on hold until it's reviewed by law enforcement, but even this has some significant downsides.

What if I want to start a vegan credit card that only allows payments to vegan businesses? You're saying that should be illegal?

The best compromise is to not have a compromise and fix the actual problem instead of trying to fix side effects: make it far easier for companies to enter the payment processing space. With thousands of payment processors you'll very likely be able to find a company that is willing to process your credit card payments for vegan porn.

The real problem is a few huge players with near monopoly control.

Nearly everyone with a credit or debit card will have one with one of the major payment networks (that just all happen to disallow these sorts of high-risk businesses). No one has the ability to pay with CCBill unless they've run into a high-risk business and have decided that's a (possibly pretty big) hurdle that they're willing to jump. And many people won't want to sign up with CCBill... the end result is that these high-risk businesses are less viable. Maybe they should be less viable, but I don't think unaccountable corporations should be making that decision for us.

Visa/MC are relentlessly profit-oriented. If they’re not engaging with entire market sectors it’s because they don’t predict it to be profitable.

I’m a bit confused by your second paragraph. You can still transact with CCBill from MC/Visa. CCBill is like Stripe for high risk orgs.

In my not so humble opinion, payment processors should be transaction-blind - they should process any transaction and all transactions.

I would never want to live in a Canada where payment processors are blind to transactions and the government couldn't freeze accounts of extremists/terrorists.

Be sure to define it in such a way that you can't be labeled as such in any cicumstances.

Thank you for thoughtful and thought-provoking discussion with you.

Do they just have to eat it? Or can they charge higher fees to those merchants? If the latter they could quickly use that to discriminate. $100/tx fee would kill most any normal business.

Perhaps the problem is the government doesn’t provide a non-cash lowest common denominator, so people are basically forced to use Visa/MC?

> ... how do you square that with one category of business causing way more chargebacks than average?

Simple: Liability shift.

The liability shift is what spurred merchants in the U.S. to finally, albeit begrudgingly, modernize by upgrading their terminals to take chips and NFC. They did so because the cost of not doing so was too high. Some hold outs exist, but they are quickly realizing their error in calculation.

Liability for card-not-present transactions and your typical our-word-against-theirs dispute has always been entirely on the merchant. The card issuing bank just facilitates the dispute resolution. Banks pocket the interchange fees either way, so who cares about the rest? About as neutral as you can be, setting aside the fact that the cardholder is the bank's customer (because they are also the merchant's customer).

Liability for fraudulent in-person (card-present) transactions was on the bank, which is why banks make such a big deal about fraud detection. There's no liability for a transaction that is denied. However, since the liability shift, fraud liability for card-present transactions is only on the bank if the merchant is using a new chip or NFC terminal when the customer presents a chip- or NFC-capable card. Swipe a chip card, and it's back on the merchant.

In the end, theoretically, you have merchants and banks both interested in quality of service and fraud prevention.

"lawful" is the rub

not all laws equal and not all nations are democracies, or equally moral or enlightened

I do agree we should have less "meta-crimes".

There are numerous examples of companies doing something legal, that later blows up and they become the scapegoat for letting it happen.

As long as that happens, payment processors are going to protect themselves by avoiding certain industries.

Yep. If you make me liable on some legal matter involving some third parties that use me as a service, I have no choice but to brush up on law and defend myself the best I can.

So they'll never give financial institution carte blanche immunity, because they rely on them to choke off the money for illegal activities. And even if they did give immunity, you know they'll turn around a say "well, we didn't mean you could just ignore blatantly illegal activity" and the banks will fall into line.

If you see comments calling for payment processors to be dumb money pipes free of liability, those are likely coming from libertarians.

:)

The problem is, it's almost all allegedly fraud.

No one has the time or money to prosecute all of the attempted fraud in the system.