opinion

The Rocky Road of Regulations in 2018

The Rocky Road of Regulations in 2018

Part of everyday driving is avoiding potholes as you navigate often crowded streets. Rocky roads can lead to flat tires and banged up wheels if you’re not careful. We in the adult industry certainly had to drive with our eyes wide open this year — as 2018 was filled with many regulatory twists and turns that could have landed our businesses in the digital ditch.

Ultimately these new regulatory requirements elevated the industry by holding all of us to a higher standard; however, getting there took some hard work by everyone. As the year ends, we wanted to look back at some of the key changes that increased transparency to both regulators and consumers.

As we enter 2019, we can take a deep breath and be proud of how much we grew — and how many potholes were avoided. The adult industry as a whole is stronger thanks to these challenges that became opportunities.

FOSTA/SESTA

In April, Washington lawmakers signed a combination of bills targeting sex trafficking: the Stop Enabling Sex Traffickers Act (SESTA) and the Fight Online Sex Trafficking Act (FOSTA) into law. While these bills look progressive, Segpay stands alongside the Free Speech Coalition’s position that ultimately they will not prevent trafficking and in fact will push legitimate sex workers underground where they will be more vulnerable to danger.

The best thing to come out of them is that they started an important conversation about trafficking and should ensure more vigilance by website operators. Trafficking is an issue that concerns all of us, and the hope is that eventually we can rethink and reshape these laws. Ideally, the exercise of enacting and complying with FOSTA/ SESTA will help lead to better ideas and higher standards providing safety for legitimate workers while preventing the illicit practices that these laws aim to address.

Age Verification

Browsing in the U.K. is about to change by the end of this year. Landing on commercial adult sites will soon require users to go beyond checking a box to prove they are over 18 years old. Porn websites in the U.K. will have to provide a more advanced age verification process. The legislation is designed to keep adult content away from children by putting up a barrier to prevent accidental exposure to such websites. While this will only impact people trying to access pornography from within the U.K., this type of verification process could spread to other countries and other industries. In the latter part of this year, we announced a partnership with AVSecure to help merchants gain access to age verification tools in advance of the law’s deadline.

Beneficial Ownership

New rules from the U.S. Treasury’s FinCEN division (financial crimes enforcement) began in May, requiring Segpay and other processors to perform a more extensive identity verification of the individuals with ownership stakes in the merchants we onboard, meaning we must collect information from a CEO and anyone with a stake of 10 percent or more in a high-risk business.

We already collect information about our merchants as part of our Know Your Customer (KYC) requirements, but the new rules expand the number of individuals whose information we’ll need from businesses with multiple shareholders. While it adds paperwork, these rules also provide more transparency to further legitimize our industry in the long run.

GDPR

No one will forget the time it took to gear up for the E.U.’s General Data Protection Regulation (GDPR). The game-changing privacy law designed for handling consumer data increased the levels of protection for individuals, helping consumers to gain a higher level of control through a more transparent data collection and usage process.

Many who missed the May deadline spent months continuing the process toward full compliance. At Segpay, we began with a full “Health Check” — evaluating all current policies and processes against GDPR guidelines. We registered with the U.K. information Commissioner’s Office and signed up with Privacy Shield. We also were in touch with all third-parties with whom we share data to ensure that our customer data is protected.

GDPR compliance hasn’t been simple for anyone, but it’s helped enhance our data security, on top of PCI, and in the long run should help improve relationships between consumers and those they entrust with their personal information.

Visa Chargeback Alerts

News about chargebacks isn’t always so positive; however, one of our favorite gifts this year came from Visa, who created a system that improved things for us and our merchants. Visa Merchant Purchase Inquiry (VMPI) helps resolve issues before they become chargebacks. It’s part of the Visa Claims Resolution (VCR), introduced in April to decrease the time needed to resolve claims.

Acquirers, merchants and issuers saw a reduction in dispute volume, along with proactive dispute resolution, identifying, tracking and monitoring abuse, and providing a better customer experience. Visa also added data elements to their system-to-system interface that assist in decision making and ensure acquirers have the information they need to help merchants prevent disputes from becoming chargebacks. The ability to bundle chargebacks was another benefit, allowing merchants to provide one response where multiple transactions occurred on a single account and a merchant.

DDOS Attacks

One of the biggest potential potholes this year came via an email from “Fancy Bear.” The extortion attempt was sent to payment processing vendors in multiple locations around the world and followed Distributed Denial-of-Services (DDoS) attacks that attempted to intimidate its victims by spreading malware, and asking for Bitcoins as a ransom payment. The good news: these attacks forced its targets to step up security.

As we enter 2019, we can take a deep breath and be proud of how much we grew — and how many potholes were avoided. The adult industry as a whole is stronger thanks to these challenges that became opportunities. Here’s to a smoother ride and continued success in 2019.

It took only three years for Cathy Beardsley to turn startup Segpay into a profitable company. As president and CEO, Beardsley oversees the day-to-day operations and long-term strategic planning for the company. Segpay is one of four companies approved by Visa to operate as a high-risk internet payment service provider in the U.S. Since 2005, Segpay has offered online merchants a state-of-the-art billing platform that provides realtime payment processing around the globe.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

profile

WIA Profile: Reba Rocket

As chief operating officer and chief marketing officer of Takedown Piracy, long at the forefront of intellectual property protection in adult entertainment, Rocket is dedicated to safeguarding the livelihoods of content creators and producers while fostering a more ethical and sustainable industry.

Women In Adult ·
opinion

Protecting Content Ownership Rights When Using AI

In today’s digital age, content producers have more tools at their disposal than ever before. Among these tools, artificial intelligence (AI) content generation has emerged as a game changer, enabling creators to produce high-quality content quickly and efficiently.

Corey D. Silverstein ·
opinion

How Payment Orchestration Can Help Your Business

An emerging payment solution is making waves in the merchant world: the payment orchestration platform (POP). It’s quickly gaining traction as a powerful tool for managing online payments — but questions abound.

Cathy Beardsley ·
opinion

Fine-Tuning Refund and Cancellation Policies

For adult websites, managing refunds and cancellations isn’t just about customer service. It’s a crucial factor in maintaining compliance with the regulations of payment processors and payment networks such as Visa and Mastercard.

Jonathan Corona ·
profile

WIA Profile: Laurel Bencomo

Born in Cambridge, England but raised in Spain, Laurel Bencomo initially chose to study business at the University of Barcelona simply because it felt familiar — both of her parents are entrepreneurs. She went on to earn a master’s degree in sales and marketing management at the EADA Business School, while working in events for a group of restaurants in Barcelona.

Women In Adult ·
profile

Gregory Dorcel on Building Upon His Brand's Signature Legacy

“Whether reflected in the storyline or the cast or even the locations, the entertainment we deliver is based on fantasy,” he elaborates. “Our business is not, and never has been, reality. People who are buying our content aren’t expecting reality, or direct contact with stars like you can have with OnlyFans,” he says.

Jeff Dana ·
opinion

How to Turn Card Brand Compliance Into Effective Marketing

In the adult sector, compliance is often treated as a gauntlet of mandatory checkboxes. While it’s true that those boxes need to be ticked and regulations must be followed, sites that view compliance strictly as a chore risk missing out on a bigger opportunity.

Jonathan Corona ·
opinion

A Look at the Latest AI Tools for Online Safety

One of the defining challenges for adult businesses is helping to combat the proliferation of illegal or nonconsensual content, as well as preventing minors from accessing inappropriate or harmful material — all the more so because companies or sites unable or unwilling to do so may expose themselves to significant penalties and put their users at risk.

Gavin Worrall ·
opinion

Know When to Drop Domains You Don't Need

Do you own too many domains? If so, you’re not alone. Like other things we accumulate, every registered domain means something to us. Sometimes a domain represents a dream project we have always wanted to do but have never quite gotten around to.

Juicy Jay ·
opinion

Understanding 'Indemnification' in Business Contracts

Clients frequently tell me that they didn’t understand — or sometimes, even read — certain portions of a contract because those sections appeared to be just “standard legalese.” They are referring, of course, to the specialized language used in legal documents, including contracts.

Corey D. Silverstein ·
Show More