Visa and Mastercard’s Colossal Strategic Mistake With Pornhub

Visa and Mastercard’s Colossal Strategic Mistake With Pornhub

December 16, 2020 0 By aure

On the 4th of December, an NYT investigation revealed that pornhub hosted hundreds of thousands of videos of child molestation, rape, and other atrocities.

On the 7th of December, Mastercard and Visa started investigating “financial links” with the company.

On the 12th, they decided to stop dealing with Pornhub altogether, a decision PayPal had already taken in 2019.

On the 14th of December, Pornhub took out of its platform 8 million videos from unverified users and decided to verify all of them before putting them back.

On the 15th, Pornhub declared it changed its policy and only accepted cryptocurrencies as payment method on its website.

This move by Pornhub is the first mainstream push towards the mainstream adoption of cryptocurrencies by the general public.

Everyone Heard of Crypto – But Nobody Used It…Up to Now

Everyone heard of crypto when bitcoin peaked at $20 000 end of 2017. Not many people knew how it worked though, nor what you could do with it.

As such, its adoption has remained restricted to geeks, libertarians, those that hoped to make a quick buck, and Silkroad customers.

Crypto, despite its renown, remained a marginal phenomenon. The most powerful corporations in the world don’t accept them as payment, and there isn’t simply much use for them.

Why bothering opening several online accounts (broker and wallet), exchanging your money against the coins, only to see it fluctuate like crazy when you can simply pay with PayPal and your own money?

The main (and unique) reasons why people bought crypto was that it could somewhat store value, and it was an easy asset to speculate on.

However, Mastercard and Visa’s strategic mistake is about to change that.

Pornhub Is Big Enough to Force Everyone Into Crypto

Pornhub is a mastodon of the web. According to certain rankings, it is the 10th most visited website in the world, with about 3 billion visits monthly. This success is no surprise. Porn is to media content what sugar is to food. It’s one of the most addictive products on earth.

As such, 99.99% of men watch porn, the remaining 0,01% being the members of the no-fap and no-porn community (a bunch of weirdos to mainstream thinking). An increasing majority of women, unfortunately, watch porn too.

Pornhub is big, and its parent company, MindGeek, is even bigger. It owns and operates an estimated number of 1000 porn websites. As such, it can’t be bullied easily.

When Visa and Mastercard decided to withdraw their services from the platform, they made one strategic mistake with two big consequences.

Firstly, they didn’t check what services they were offering. Unlike what was thought originally, the payment processing companies weren’t connecting Pornhub to viewers. They were connecting porn stars to viewers.

Pornhub enables anyone to upload videos and make money off them according to their popularity, a bit like Youtube. They also offer the chance to stream live-shows which users pay to access. In both cases, Pornhub “creators” used to get paid with Visa and Mastercard.

As such, when the two companies withdrew their services, it’s not Pornhub they punished. It’s the people living off the videos, the “content creators”.

As for Pornhub, they make most of their money with ads, computer viruses, and a smaller quantity with their premium memberships. They are, as such, in no way as dependent on external payment processors as their porn stars are.

That was the first mistake Visa and Mastercard made. Whatever signal they wished to send, they sent it to the wrong target.

The second consequence of cutting access to Pornhub is that it instantly created a vacuum for an alternative payment method. In other words, Visa and Mastercard just handed a market share to a competitor.

For example, Stripe, Square, or PayPal could have rushed to Pornhub and gain a new customer. However, these three companies have an equally high reputation to guard and wish not to deal with such a controversial client.

So Pornhub turned itself to the last natural online payment processing method out there: crypto.

Doing so, crypto found itself a reason to exist. Pornhub has given users the first valid reason to purchase crypto for a use other than investment.

It marks the first step in the public adoption of cryptocurrencies.


Were Visa and Mastercard right to suspend their contract with Pornhub? Do they have a responsibility in the type of exchange they help conclude? Should they have a responsibility?

It’s hard to judge, and way out of the scope of this article. However, here’s what we can say in this very specific case.

First, porn is cancer that should be erased off the face of the earth. However, such as for cigarettes or sugar, that will never happen. If financial institutions had to stop dealing with companies selling evil products, capitalism wouldn’t exist.

Second, people working in porn are consenting adults and for many of them, they wouldn’t want to do any other jobs. Should they be cast out of society because of what they do? In regard to the number of people consuming porn, that would be a hypocritical move to make.

As taboo as porn may be, society needs it as much as anti-depressants.

Ashley Matthews (Riley Reid) expressed this hypocrisy on Eric Weinstein’s podcast. She explained that it was difficult for porn workers and companies to make a living off their art because few companies needed in business (accountant, banks, etc) were willing to work with them. I thought it to be rather discriminatory.

Third, Visa and Mastercard’s move is understandable due to the type of issues at hand, mainly due to the absence of moderation.

There is the fact that pornhub has unwillingly destroyed tens of thousands of lives by enabling malevolent people to broadcast intimate videos of other people, a practice known as revenge porn.

Revenge porn has become such a problem in Western society that it is now a crime that could send its perpetrator to prison for years.

There is the other fact that Pornhub welcomed on its platform videos of rape and child molestation.

That is obviously way out of the line. By not acting against this type of content for years, Pornhub has made itself complicit and should suffer financial consequences.

But what about the viewers of these videos? Aren’t they even more complicit than Pornhub?

It’s not easy to decide.

In any way, we can understand how and why Visa and Mastercard did not want to be associated with Pornhub any longer.

I believe withdrawing their services was the right thing to do, but I think it should have been non-permanent. I think they should have pushed Pornhub toward better moderation of their content, instead of cutting ties altogether. I think it’s always better for a company to be in a position of influence, then in a position of powerlessness.

Pornhub is now free, and only political actors have the power to influence the company’s decisions. In regard to their recent initiatives towards Pornhub’s numerous problems, it appears that they do not seem one bit interested.

The Bottom Line

Mastercard and Visa’s decision to withdraw their services from Pornhub has led Pornhub to accept cryptocurrencies as a sole payment method.

The power, influence, and outreach of Pornhub are big enough to shift consumer behavior into getting and using crypto to buy and sell online.

While Pornhub may be the first mainstream company to accept crypto only, it’s not unreasonable to think that many other businesses will follow if they notice users enjoy this payment gateway.

Weirdly (or not), the porn industry is not talked about much in business books. However, porn has been a pioneer for the development of many technological innovations. To cite the most prevalent ones, Super 8 film, VHS, 4K, VR, and the Internet itself were originally driven by users looking to access adult content and producers looking to improve the quality of adult content.

As such, we shouldn’t disregard too soon the potential technological impact that porn can have on the rest of society. That includes crypto adoption.

Cryptocurrencies had until recently, no real use or reasons to exist.

By making it their sole payment processing option, Pornhub has just given cryptocurrencies the push they needed to be adopted by the wider public.

Is crypto really the future of money? I personally doubt it.

Pornhub, though, bet the opposite.

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Picture credits: Photo by Shane uchi on Unsplash