Nobody thinks of a payment rail as a publisher or moderator. But actually, they behave like one. Perhaps even reluctantly, they’re deciding who gets to sell what, simply by choosing whether to facilitate their payments. Because they are averse to facilitating untoward activities, they can pull the plug.
Two companies quietly run the tollbooth
Visa and Mastercard handle almost 90% of card processing outside China. It’s a duopoly, and it’s a concentration that’s now subject a lot of scrutiny. In 2024 the US Department of Justice actually sued Visa, successfully so, alleging the company monopolises debit network markets and processes more than 60% of all US debit transactions while charging over $7 billion in fees each year. It’s literally the foundation of our economy, given that in-person card payments are also facilitated mostly by Visa or Mastercard. It’s everywhere, and even the government is concerned that they have so much leverage that they can decide the rules on what they will and won’t facilitate. Without them, can a business survive? In most cases, no, not very well.
They’ve already shown they’ll pull the lever
In 2020, Visa and Mastercard suspended processing for Pornhub after a public investigation into illegal content on the platform, and the following year OnlyFans moved (just briefly) to ban adult content altogether. Its founder plainly pointed at banking partners’ refusal to keep processing payments. Now, the intricate and intimate rules on what performers can and can’t do are written by office workers at Visa and Mastercard.
But it’s not just one type of adult business that they’re concerned with, it’s all. Gambling had its own version of this. The UK Gambling Commission gave a blanket ban on credit card gambling from April 2020, after finding that 22% of online gamblers who used credit cards showed signs of problems. Operators running anything and everything from sportsbooks to online slots had to rebuild their payment stacks around debit cards and e-wallets – basically overnight. It was a reminder that the rails themselves hold the keys to revenue, and without revenue, the entire business can crumble down overnight with a single policy update. Of course, sometimes it’s for good, like when they tackle illegal gambling.
Why alternatives are hard to build
The obvious would be to find a route around the card networks entirely. Before Open Banking, which is a fairly recent technology, it was basically impossible. Crypto was a niche, high-risk option that companies with multi-million-dollar revenue streams aren’t going to touch.
Open Banking is where you pay directly from a bank account (no card required). It’s a genuine alternative. It’s cheaper for operators too, typically 0.5% to 1.5% per transaction rather than 2% to 4% for cards. It settles in real time. It carries no chargeback risk. Perfect, right? Well, adoption remains thin, with roughly a fifth of UK consumers using open banking payments. The second issue is that many payment providers simply exclude gambling from their terms of service to avoid the compliance burden of AML checks and licensing. Even where it’s technically available, an individual customer’s own bank can still block the transaction at the account level. So, we are getting closer to technology that bypasses Visa and Mastercard, but other problems arise, like the willingness of enough banks to plug into it.
The rails aren’t neutral
Payment providers are never going to admit that they’re gatekeepers, and whenever they do, it’s always from the perspective of reluctant-but-necessary. If they could go back, perhaps they would offload it to another body, but for now, they’re in too deep.
