“Hi. I have a question about merchant services?” It was the third or fourth phone call, but exactly the same conversation.
In early 2018, I sat in a Melbourne hotel room with a friend as she called every big bank in Victoria, trying to organise a credit card payment system for her sex industry business. She answered the same awkward questions over and over. Did she provide sexual services? Did her website feature adult content? The most important question: was she a sex worker (such as an escort) or a business servicing workers (such as an agency or directory)?
Once they discovered she was a full-service worker, every bank said ‘no’.
Just like access to housing and healthcare, being able to manage our money is a fundamental right; one that’s essential to our wellbeing. But all over the world, sex workers experience discrimination from financial institutions. Without basic services such as savings accounts, credit card payment processing, and the ability to take online payments, we’re often left at a disadvantage.
What is financial discrimination?
When I say ‘financial discrimination’, I mean any actions taken by banks or other financial institutions that treat sex workers differently and leave us worse off.
You might assume criminalisation of sex work is solely to blame, but the situation is more complicated. In 2014, USA-based Chase Bank and Bank of America closed the accounts of a number of porn performers. Some media outlets blamed ‘Operation Choke Point,’ a government campaign targeting thirty types of businesses that aren’t illegal, but are considered immoral. In Australia, banks often refuse service to sex workers, even in states where the type of sex work they do isn’t criminalised.
Hayley,* an independent escort, experienced this last year, when she applied for a business account with one of the ‘big four’ banks. “They asked me what trade I do,” she says, “I said I'm an escort. The bank worker said they [couldn’t] open an account for me.”
In 2019, National Australia Bank received media attention when it closed the accounts of a number of independent sex workers. But NAB isn’t the only culprit; while writing this article I spoke with workers who were refused service by other big banks but didn’t want to speak openly for privacy reasons.
It’s not just about bank accounts...signing up for credit card payment services can be a problem too.
Australian banks often refuse to supply merchant services - credit card payment equipment and facilities - to sex workers and other adult industry businesses.
You may remember Lucy, from last month’s blog on housing discrimination. She works as a full-service escort and an online content creator. When Lucy needed credit card processing services for her adult websites, she went to her bank. Her lawyer and accountant helped out with the application - she’d been warned that discrimination was likely and did her best to provide the right information. She says, “I had to go through quite a huge process, it was really invasive. I'm talking a 45-minute interview into every single detail about my business.”
Despite her efforts, the bank turned her down. “The answer was, 'When you decide to change your [type of] business, let us know.'”
Taking your business online? Watch out for online payment processors!
Our problems aren’t limited to in-person banking. Many online payment processing companies - such as Stripe, Square, and PayPal - specifically refuse service to businesses involved in adult activity, regardless of the type of work and whether it’s prohibited.
Paypal is particularly notorious: the company has been known to terminate the accounts of adult providers and confiscate their funds, sometimes for something as innocent as selling a memoir about sex work. In Australia, payment processor Square has come under fire for refusing service to sex workers, even when the type of business conducted is permitted under the law.
This has become a huge problem, as more of us take our businesses online. The COVID pandemic has seen many sex workers switch to membership platforms such as OnlyFans to make a living. But pressure from payment processors, in combination with SESTA/FOSTA, means we’re often excluded. OnlyFans has been known to shut down the accounts of adult content providers, for example.
Anti-discrimination laws often don’t exist...or sometimes, they’re simply ignored.
Often, banks don’t have a specific policy about sex work. You might be accepted at one branch but turned away at another, depending on the attitude of the people in charge.
Many financial institutions say that they want to prevent illegal activity such as trafficking or money laundering. When interviewed by Investor Daily in 2019, the Commonwealth Bank said, “We do not tolerate illegal activity and will not take on any customers who we suspect may be involved in criminal behaviour.”
Some institutions refuse service due to a perception of risk - of chargebacks on credit cards, illegal activity, or bad debts, for example. In a 2017 news article, NAB says, “...certain industries carry higher environmental, social and governance risk sensitivity, requiring particularly careful consideration before a decision is made. The adult industry is one of these industries."
But judging our industry as ‘risky’ might be missing the point, especially if that judgement is based on sex work stigma. Zahra is a Fellow at the Berkman Klein Centre for Internet and Society at Harvard Law School, as well as a Policy Officer at Scarlet Alliance, Australian Sex Workers Association. She says that a bank’s assessment of risk often doesn’t make logical sense. "While financial providers see sex industry businesses as being at 'high risk' of credit card fraud or charge backs, this could be said of so many industries who don't have the same blanket bans.”
Unfortunately, legal protection for sex workers varies depending on your location. In Australia, some states have outlawed discrimination based on profession, while others don’t have those protections. Even when discrimination against sex workers is prohibited by law, workers have still reported being refused service.
Lawsuits have taken place in the past, with banks asked to compensate sex workers for unfair treatment. Despite this, the way banks treat us generally doesn’t seem to have changed.
Access to banking is a human rights issue. It’s also an essential step forward in our fight for sex worker rights.
Losing access to financial services is a really big deal. Sex workers might struggle to save money, have trouble paying bills, or miss out on loans and rental properties. Zahra says, “For the many sex workers who are sole traders, policies that refuse financial services to sex workers make it extremely difficult to access digital economies, to get paid, and to maintain a livelihood."
This is the case for Hayley, who says that her experience of discrimination has affected her financial security: “I want to save for my future...but it's hard when I can’t put my savings in a bank account.”
Lucy found her experience especially frustrating, because she’d done everything right. “I had a team of four or five people working very very hard for this...I was claiming everything. Income, expenses, paying my GST, paying my taxes on time, paying my registration, everything was a proper business.” Like other citizens, sex workers want to save money, buy property, and pay tax; we shouldn’t be held back by financial institutions.
What can we do about financial discrimination?
Dealing with discrimination can feel discouraging, or even hopeless. You might choose, like many of us, to keep your work a secret.
If you’d prefer to be ‘out’ as a sex worker, doing some research beforehand could help you avoid the worst offenders. Sex workers in the USA have been keeping this document detailing organisations that discriminate against sex workers. If you’re working in Australia, Sex Work Law Reform Australia also provides a list of financial institutions to avoid.
Or you might choose to fight back - and you won’t be alone. Zahra says that taking legal action can help. "There have been successful settlements of sex worker claims of financial discrimination and increasingly, sex workers are preparing to come forward and speak out."
She says that systemic change is more likely to happen if more sex workers make the issue public. "As sex workers come out naming and shaming them, financial providers should care about their reputational risks. They should also care about their financial risks and the prospect of settlement payouts if they continue to discriminate against sex workers. They should be concerned about their legal liability."
If you’ve experienced any kind of discrimination, consider reaching out to your local sex worker-led organisation. Scarlet Alliance, our national peak sex worker organisation, can advise you and offer support.
The bottom line: financial discrimination against sex workers must stop.
Being able to open a bank account without fear of rejection shouldn’t be difficult...it should be an everyday experience for sex workers of all kinds. When we choose to run our businesses the same way others do - accepting credit card payments, applying for loans, and opening business accounts - we should be encouraged, not turned away.
If you’ve had a negative experience with your bank, perhaps it’s time to take action? We need to show that financial discrimination against sex workers is unacceptable - and that we’re not backing down.
*To protect privacy, some names have been changed.