November 23, 2020

Sex workers should be turning to fintechs, but cash is still queen

Why haven't fintechs developed safe payment mechanisms for sex workers?

For sex workers like J*, cash is a lifeline.

She is one of an estimated 72,800 sex workers in the UK who is still forced to rely primarily on cash; an oft-forgotten reality in the debate around moving to a cashless society.

It's not that J doesn't want to use more modern, digital methods of payments; she actually tried using PayPal once.

But after receiving payment for her services, the funds were quickly frozen when her client contacted PayPal and claimed fraudulent activity on his account.


J says she pleaded with PayPal, providing evidence of communication between the two email addresses, which contained her client's commitment to pay. Nevertheless, PayPal upheld the case and closed J's account; leaving her not just out of pocket at a difficult time, but also making the case tantamount to rape by deception under the 2003 Sexual Offences Act.

That makes cash not only the safest option for consenting sex workers**, but the only real avenue.

New cards, old rules

PayPal's refund mechanism is a common issue that makes digital payments untenable for sex workers.

Traditional credit cards similarly allow payments to be retrospectively withdrawn — whether or not services have been rendered.

That's why strip clubs in the UK have long required payment in cash.

There are many documented cases of individuals attempting to claim refunds on credit card transactions at strip clubs. In some cases, this has left clubs out of pocket. 

Because new mobile-first banks operate under the same legal frameworks as traditional players, they must operate under the same rules — including Section 75 of the Consumer Credit Act of 1974.

As a result, fintechs offer little by way of a solution to communities and workers in the grey area.

High hopes for digital transfers

When PayPal hit the market in the early 2000s, the sex workers I interviewed say they were hopeful.

They were able to set up anonymous email addresses to receive payments from clients, reducing the risk of blackmail, offering privacy, and adding a degree of security. 

Clients would transfer the money via the so-called Friends and Family feature, and the funds could then be easily transferred to other online financial accounts in the worker’s real name for everyday use without recourse to cash.

This proved briefly workable, but PayPal swiftly introduced measures to curb the use of its platform for transactions related to sex work under what many term its ‘morality clause’. 

Some context: in 2003 PayPal went the same way as payment providers Visa and Mastercard, who in 2002 ceased providing services to web vendors that sold any form of adult merchandise (including subscriptions to porn sites, and vendors of sex toys and other adult paraphernalia).

Though they all claim that this was due to high levels of chargebacks requested by consumers, many sex workers accuse PayPal and its peers of policing the morality of sex work through financial means.


Newer payment providers have followed suit. For instance, Stripe excludes all sorts of services including ‘literature, imagery and other media’ (no 50 Shades for you) and ‘sexually-related services such as prostitution, escorts, pay-per view, adult live chat features’.

Because mobile-first cards are required to operate under the same legal frameworks as traditional banks and lenders, the same old rules apply.

The move to crypto

With fintechs and alternative payment providers presenting little respite, some sex workers have turned to cryptocurrency.

Cryptocurrencies allow users to trade anonymously, providing workers with the protection they require (although exchanges require some form of ID to sign-up).

One worker stresses that the main benefit is that transactions also aren’t reversible by any authority once submitted to the blockchain, thereby mitigating against chargebacks. 

Content providers like Nina Mona have been using bitcoin in the sex industry for two years. In an interview with specialist publication CoinDesk, Mona said that bitcoin offered "privacy tech" and saved her from sharing her credit card information. Meanwhile, Bitcoin advocacy groups have been writing bitcoin guides aimed at sex workers for the last five years. As a result, Chaturbate, an adult content site, accepts 20 different cryptocurrencies for token purchases. "With fintechs and alternative payment options presenting no more options than “traditional” solutions, some sex workers have turned to cryptocurrency." Cash is still queen

Crypto does offer some respite, but the uptake of crypto by sex workers is still relatively niche; confined to those who do online cam-work.

Given cryptocurrency is still a relatively new technology, clients are often inclined to stick to what they know.

Bitcoin and other digital currencies can also fluctuate considerably in value, which many workers aren’t prepared to risk. 

As a result, cash remains the only real option to sex workers, who form part of the "underbanked".

New financial legislation is therefore needed to cater to their needs, alongside a broader decriminalisation of sex work to reduce the stigma around their professional identity.

Reform will allow for sex workers entry into the cash-free society we are heading towards, and ensure the physical and economic safety of thousands of workers in the UK.

Who knows, it may even prompt fintechs to develop safer payment mechanisms that sex workers have long sought. 

* Names have been changed to protect their anonymity

*All mention of sex workers in this piece refers to consenting sex workers. Sex trafficking and the exploitation of minors for sex is a real and present issue in the UK, and I am fully supportive of any measure that can identify and police the transfer of funds in association with commercial sexual exploitation.

Our secret columnist has worked in the London startup scene for over five years.