WePay's decision to halt a crowdfunding initiative for an adult film actress struck a nerve as payments companies are seen distancing themselves from people in the adult entertainment industry.

The issue has become particularly sensitive amid reports that JPMorgan Chase has shut down personal accounts of adult film stars. WePay prohibits the use of its service for adult-related services, and says its recent decision stems from a specific action on the part of the user whose account was closed.

"There is a misconception that we don't allow people associated with adult entertainment to use our platform and that is categorically untrue," says Bill Clerico, CEO of WePay. "If they are using WePay for valid use cases that comply with our terms of service we make no judgment as to their profession."

Eden Alexander, an adult film star, contracted an illness that reportedly resulted from an allergic reaction to prescription medication, according to a report from a website affiliated with Vice. Alexander set up a crowdfunding campaign on GiveForward, an online fundraising site that uses WePay for processing. Supporters of the campaign, including other adult entertainment figures, offered nude photos and other adult content in exchange for donations to Alexander's campaign.

Alexander retweeted these offers, which put her in violation of WePay's terms of service, Clerico says. There is a risk tied to the distribution of adult content, he says. "There are cases in which people use other fundraising models as a way to get around the terms of service and sell pornography."

This was not necessarily the case for Alexander, whose supporters lashed out at WePay in response to its halting of her campaign. WePay responded a May 17 blog post that sympathized with Alexander and offered her the chance to start a new fundraising campaign.

WePay also suggested it's under pressure from its partners and card networks regarding the content of campaigns. Vice reported the payments processor Vantiv is one of WePay's partners. WePay is in contact with a number of acquirers as part of standards, says Clerico, adding Vantiv was not involved in the Alexander campaign. Vantiv did not return a request for comment by deadline.

Alexander has moved her campaign to Crowdtilt, another company that bans adult content as part of its terms of service. Crowdtilt did not return a request for comment by deadline.

WePay is discussing ways to improve how it communicates its terms, Clerico says. "We could have been more helpful in helping her understand our terms of service," he says.

Companies that process financial transactions are under increasing pressure to vet the business models of their customers, in part a result of the institutions' responsibility to manage money laundering risk under "know your customer" laws.

These regulations have led to in international cooperation among financial institutions to share information on possible illegal activity. But financial institutions have also complained that these rules are forcing them to police the "morality" of their clients.

Legal marijuana dispensaries and gun shops face similar difficulties.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry