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The personal ad site Backpage has just had its payment processing terminated by both Visa and Mastercard, following termination by American Express last year.
Visa, Mastercard, Bitcoin Payments, Backpage, payment processing, informal pressure, business models
The personal ad site Backpage has just had its payment processing terminated by both Visa and Mastercard, following termination by American Express last year. This week, a few phone calls from Chicago-area bureaucrats were enough to get Backpage officially sanctioned by nearly the entire banking establishment.
Rainey Reitman, activism director at the Electronic Frontier Foundation, wrote:
"We shouldn't have informal pressure from public officials forcing financial service companies into deciding which types of speech should and shouldn't be allowed. MasterCard and Visa are not supposed to be the arbiters of free speech on the Internet."
But cryptocurrency is. This point was not lost on the Washington Times, who wrote that Backpage users will now “only be able to pay with Bitcoin.”
The Chicago-area bureaucrats' “case” against Backpage is slippery and misleading in the extreme. Examine this odd statement printed by USA Today:
“Cook County Sheriff's Police say they have made more than 800 arrests since 2009 connected to Backpage adult service ads. Fifty of the arrests were for sex trafficking, involuntary servitude or promoting prostitution.”
Note the use of the word “or” in that last sentence. It's entirely possible (even probable) that zero of the arrests of BackPage users were for “sex trafficking” or “involuntary servitude.” But because of misleading wording, readers are prompted to believe otherwise.
This grand display of financial fascism may not be the end of Backpage — not if they take a page out of the crypto book. Sex and cryptocurrency have been used in successful combination all over the Internet. Several sex toy shops, cam sites, porn sites, escort services, and even real-life brothels have switched to crypto-only business models. The risks of economic sanction, chargebacks, and legal assault are proving too much for many pleasure businesses to continue accepting fiat.
Will Backpage lead their millions — yes, millions — of monthly visitors to adopt cryptocurrency in order keep the trade channels flowing? It won't take long to tell, as the service terminations by Visa and Mastercard appear immediate and Backpage's fiat revenue has likely stopped as of now.
And who knows? Maybe Backpage will even become a 100% crypto holdings business, since it's likely that Bitpay and Coinbase won't deposit to their bank, either — if Backpage can even keep a bank account.
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