What's stopping a large, profitable company like Valve from starting its own payment processor? Surely the technology part of it can't be an impossible hurdle.
What's stopping a large, profitable company like Valve from starting its own payment processor? Surely the technology part of it can't be an impossible hurdle.
Adoption.
You'd have to onboard hundreds/thousands of banks and terminal providers so they accept/give out your card.
I excpect the underlying technical stuff isn't that hard compared to getting people and companies to actually use it.
> You'd have to onboard hundreds/thousands of banks
It's perhaps a good idea. It's likely that not very many banks and terminal makers and payment processors really matter. It would be a little delicate because the ones that matter would be pressured or at least would feel pressured NOT to participate on threat to their currently main business.
And the project doesn't have to become mainstream probably, just accepted "enough".
A better reason is that it's not really Valve's battle. They have plenty of other business. They don't need to fight this war. A company like OnlyFans, yeah perhaps they do - but they are likely much smaller.
Valve is in a situation that helps: they charge separately for each item. Some that the credit card networks are okay with and some that they are not. So they could support two regimes on their site: some items could only be paid through the Valve new card network (and gift cards and bitcoin), while other items could be paid through all the above plus the legacy credit card networks.
Valve (and/or OnlyFans) then gets paid for trying to enter the very lucrative payment network business. And gets to use these separate charges / two regimes of payments to distribute content that would be too dangerous within the current single payment framework.
Aren't cards last century technology? I'm paying with my phone anyways. Seller can use phone as well. Why does it need to involve incumbent banks and terminal providers at all? If Valve started something like that the banks would bang on its door relentlessly just to not be left out of the loop.
Gaming is the business bigger than movies, music and books combined and Valve is Google of games.
> Gaming is the business bigger than movies, music and books combined and Valve is Google of games.
Valve is not Google of games, the app stores Google and Apple has dwarfs steam sales and the individual game consoles are similar size as the steam store.
> I'm paying with my phone anyways
Right, since the phone ecosystem is large enough to be its own payment processor, unlike steam.
Phone is the platform. You can put any payment system there. In various countries it was figured out in a lot of different ways. Valve with global reach could really compete.
Also Google Play store might have more consumers and or sales but they are of worse quality. It's scummy, it's exploitative. The whole system is propped up by whales decieved by gambling mechanics and deceptive ads. It's nowhere close to real world economy. Valve is much closer. Despite using Play Store since it came to existance I never paid for anything on Google Play because I don't trust it enough to add a single payment method there.
You should maybe look up how paying with your phone works.
And what in your mind is the thing banks will be begging Steam to be let in on? This reads like payment processing fan fiction.
I know how it works because connecting your bank account to your phone can be crappy and fiddly as it goes through Visa/Mastercard. But it works that way just to ride on customers of legacy systems. It doesn't have to work that way if you bring your own customers. It would have to start online of course and eventually move through phones to the real world.
I don't trust Paypal, at all, because its brand is damaged beyond repair, but I would put enough money on Valve account to do all of my online shopping with it if Valve did even just what Paypal does (even without connecting Visa or Mastercard directly).
It seems like you're treating your personal knowledge and preferences as the basis for Valve to take on an entirely new source of revenue and risk. It's a fantasy.
Even if 100% of Valve's user base cared as much as you (they do not), why would Valve take on the massive risk of connecting to its users' bank accounts? Of having to collect on debts? etc.
> It's a fantasy.
Of course.
> Of having to collect on debts?
Why would they need to do that? "Credit" part of credit card is completely irrelevant when it comes to payment systems. It's a trick to milk the customers. Why would Valve lower themselves to that level?
My point is, with crystal clear, pro-consumer reputation Valve could be real alternative to gambling industry of Google Play store, payday loan business of VISA/MasterCard and gym membership style of extortion of other services. And betting on consumer was a recipe for success for Valve so far.
Why would they try? Because it's always good to 10x your revenue.
The backend of electronic payment is a huge mess of microservices, and lots of those services has portions of infra shared with Visa/Mastercard. So whichever alternative service you use is likely vulnerable to the same pressure.
The point is to cut MasterCard and Visa out of the loop entirely. Payment systems in many countries don't have them as intermediary. Payments in China work perfectly well without them. Or in Germany. Even Poland has widely used alternative payment scheme. With future European digital currency a lot of commerce will be done completely without any involvement from Visa and MasterCard.
> Aren't cards last century technology?
I don't pay with credit or debit card for steam, I can use Blik, which is paying with my phone or one other payment processor, but I'm not in USA. This is USA problem.
My point exactly. Valve could easily introduce something like Blik globally.
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You mean Valve, the company that has been intentionally keeping itself lean to the point they only have 300 employees?
(Visa employee count: 30,000+)
If you believe Steam et al, the payment processors are bowing to the card networks in this. So being a payment processor wouldn’t help. You need to sidestep the networks.
In the US that means either dealing with ACH at scale, which is a challenge, building a new card networks (which is hard) or only using alternative payment methods such as bnpl or crypto.
Each of those will limit your buyers, which as a merchant is a tough business decision.
> In the US that means either dealing with ACH at scale, which is a challenge, building a new card networks (which is hard)
Which is why someone has big interest in keeping it this way as in Europe practically every country solved this issue a long time ago and people do daily shopping completely omitting Visa/Mastercard. They try to fight back without much success.
Europe is not a monolith on this. You see utilization rates going as high as 75% in Europe for credit cards, so in those countries merchants would have similar choices to American merchants. That’s before accounting for debit cards which use the main network rails.
And most of the alternatives are either government controlled and thus subject to different censorship concerns or private (for instance bnpl) and subject to the same.
That is to say people seem to be dancing around there being some fundamental right to transact. Thats not one of the traditional rights and not one that is codified most places (anyplace?).
This entire situation is badly misunderstood all over the Internet. As the article itself states, alternative payment processors that are used primarily for adult content already exist. CC Bill was the example given. And they accept Visa and Mastercard. They're used by websites with plenty of explicit adult content, including simulated rape, incest, and "teen" porn. It isn't Visa and Mastercard forbidding this. In this case, it's Stripe, though it seems likely they're doing it because of pressure from Mastercard, which in turn received pressure targeting these particular platforms from some advocacy group in Australia. But itch.io and Stream could still use CC Bill, and customers would still be able to pay with Visa and Mastercard.
The reason mainstream websites don't use CC Bill and it is used almost exclusively for porn, is because they charge a lot more than Stripe and the more mainstream payment processors do. There isn't really a ban on this kind of material, provided the platform hosting it is willing to use alternative processors, so much as a price increase.
Even with Pornhub and OnlyFans debacles, they never hosted content that can't be found elsewhere on sites that allow you to pay with Visa and Mastercard. The reason those platforms were targeted was never the content itself, but non-compliance with rules that professional studios have always had to abide by requiring they keep copies of government-issued ID of all performers and provide those to any viewer who asks for it, in order to be able to prove they aren't accidentally hosting content with children or otherwise non-consenting performers.
Ultimately, if a website wants to host content with a guy taking a shit on his twin underage daughters, they can do that, and you can pay for it with Visa and Mastercard, as long as they use something like CC Bill for processing and they keep adequate records enabling them to prove the "underage" characters and not actually played by underage performers, and the people involved aren't actually related. Or, maybe more precisely, you can have real twins in a scene together, but you're then limited by byzantine country-by-country laws I have no personal knowledge of regarding what they are and are not allowed to do together that counts as sex.
The Internet is where nuance goes to die, so this all gets distilled down to "Visa and Mastercard don't allow you to buy porn" by the time most people find out about any of it.
It's basically impossible from a regulatory perspective.
Paypal exists because it broke the law, was prosecuted, and the outcome of the prosecution fined them heavily but also grandfathered their existence.
Anyone who wants to make a new payment processor likely has to take a risk of going to prison.
I mean they kind of do. Most of the time I would hand wave away any company offering gift cards or credits, but Steam has created an economy / structure that I think warrants mentioning here.
I have sold a few items on Steam because I don't care about cosmetics in games. I'm also lazy and because of that "sat" on items for a while that appreciated. I mention this because Steam credit is very fungible: it can be easily converted.
Steam also makes it very easy to redeem credit, gift, etc.
I believe you can buy Steam cards at most places Xbox cards and similar are sold as well.
Also in the early days of Bitcoin buying and selling of digital Steam assets was one of the most popular things.
On the other hand, I'm absolutely amazed some US states hasn't yet gone after Valve for running an unlicensed casino with no age verification.
I think loot boxes as a whole need to be regulated as they are clearly gambling. I'm not a fan of regulation as a solution to most problems, but when it involves children I think it sets a good framework for safety and if someone wants to start gambling later they are free to do so.
Valve goes one step beyond loot boxes with their marketplace: you get a loot box, pay to open it (basically a slot machine spin), and you get an item in a "game of chance" -- but that item is a "thing of value" that can be sold on Valve's official, first-party marketplace.
Every definition of gambling I've seen includes some variation of "winning a thing of value from a game of chance", and while loot boxes for in-game rewards skirt that (the thing you're getting is typically described in the fine-print as having no monetary value), Valve's user-driven marketplace is setting a real-world value.
Put another way: EA FC's card packs or Genshin Impact's gacha spins are worth nothing outside of those games, but I've sold Counter-Strike skins to pay for a decent chunk of my Steam Deck.
I know that physical Steam gift cards exist but I've quite frankly never seen them anywhere. Nintendo/PlayStation/Xbox cards are pretty ubiquitous though. I recently tried getting a Steam one from a grocery store but they only had the console ones.
I've definitely seen them. A quick search shows them available at BestBuy and Walmart at least.
I'm not American so I've never stepped inside a BestBuy and Walmart. The last place I checked was a Lidl, where they only had the console ones.
The regulatory environment is absolutely insane. The things you'd need to do to interoperate are nightmarish, it's damn close to an impossible hurdle. (I work at a fintech company)
How would that help? Then MasterCard would drop them directly.
Well in this case MasterCard is claiming it wasn't them, but their intermediary.
Because in this case it wasn't them, but their intermediary. However, in another case, where there was no intermediary, it would be them, not their intermediary.
https://www.lesswrong.com/posts/nYJaDnGNQGiaCBSB5/accountabi...
Sure but also in this case MasterCard are clearly full of shit.
If they start their own payment processing company, they will then be subject to the same laws and regulations and the existing processing companies. Who manages the money doesn't matter. Even if you use Crypto, Steam would still remove the games due to the Australian law.
Steam didn't remove the games due to Australian law lol. Where did you get this idea?
Steam games' availability is per-country. They could've removed games for Australian users only. NSFW games are not shown to Chinese and German players on Steam since forever.
"lol"
This whole thing came about because of the Australian campaign to remove rape games consistent with law. Payment processors could be found liable for processing payments related to illegal activities. Steam anad the payment processors could have made it region specific, but didn't, probably for PR reasons.
https://en.m.wikipedia.org/wiki/List_of_banned_video_games_i...
Also, Steam Direct didn't update their policy on game content from what I see. Doesn't look like Steam fought back. Seems as though Steam has never supported games with rape, incest, child exploitation, etc.