And Wells Fargo agrees!
To paraphrase you: you used your credit card because you felt the transaction was a risk and wanted to shift that risk onto another party. Banks don't like their legislatively-mandated fraud forgiveness being used as a risk buffer, and this is the tool they have in their box to deal with that.
Yes, they are different risks. But the issuer is still worried about fraudulent charges initiated by the merchant, in addition to the risk that nomocrypto will fail to pay off the balance.
Are they though? Generally the risk of merchant fraud is borne by that merchant's processor. There is some overhead for the issuer in processing chargebacks, but if this were an issue then we'd expect to see many other types of fraud-prone online merchants being banned.
It seems clear that this is an extension of the common prohibitions on using credit cards for gambling.[1] But I should add that it's not that they're worried about failure to repay. That risk is generally controlled by credit limits. It's the fraudulent chargebacks that cardholders initiate when they lose their money.
[1] https://www.creditcards.com/credit-card-news/10-things-credi...
Yes, they definitely are. Trust me on this one.
> The credit card issuers are not particularly worried about fraudulent "merchant" charges.
Sort of true, but... isn't that exactly what happened here? The reasons banks don't sweat merchant fraud is that they can just refuse to do business with them. And here Wells Fargo is preemptively deciding that all exchanges are shady.
non-payment of credit card debt is risk between cardholder and bank/processor. bank/processor should prefer to ban customers like this, not vendors (if possible). Customers can "launder" money through many sources (cash advance, cashback, shady businesses) if they intend to put that money in a speculative investment and maybe not pay back the debt.
bank vs processor is another dimension of complication to sort out.
Can't ding their credit rating if their card details got stolen.
Not to put too fine a point on it, but that's exactly why many banks will begin to take actions like these. It is terrible though that crypto purchases are starting to be placed in the same risk category as porn.
(Actually, now I think about it, crypto is being put in a HIGHER risk category than porn. Ouch.)
Which isn't unwarranted. Porn companies have challenges, and as shady/deceptive as some of them are in rebilling, they also have a limited number of processors they can use, so they have an interest in not getting kicked off.
Shitcoins don't care. Milk up all the cash you can, disappear. Who cares whether the processor cans your account?
That's pretty damning to me. I would be willing to bet that 81% of porn sites are not scams. So putting crypto as a higher risk category seems correct to me.
(I also recognize that there's legit exchanges, especially outside of the world of ICOs, but crypto seems to have a massive fraud issue now.)
> crypto is being put in a HIGHER risk category than porn
Most banks won't let you open up a merchant account for your porn site, but they typically won't block purchases from said sites.