PayPal, Pornhub, and Financial Inclusion
Excerpt: Basically, PornHub tells its bank, say Wells Fargo, to deposit $500 to SusieX’s bank, Chase. These instructions get batched with millions of other Wells Fargo payment instructions and sent to the Federal Reserve’s Automated Clearinghouse (FedACH). The Federal Reserve nets out all Wells Fargo-Chase payments and then provides a final end-of-day amount that Wells Fargo owes. Actual settlement between the two banks occurs the next day via the Federal Reserve’s Fedwire large value payment system. Chase then proceeds to credit SusieX’s account for $500. Voila, she has been paid. Now it could be that SusieX doesn’t want to use direct deposit. Maybe she is worried that Chase will notice she is being paid for sex work, and will cut her off. These sorts of things have happened before. Or perhaps she doesn’t have a bank account. Fortunately, Pornhub also has access to other payment processors which don’t require the recipient to have a traditional bank account. Content providers can be paid via Paxum, an online wallet. A wallet is a payments account that a non-bank provides to the public. The wallet provider is able to indirectly access vital central bank payments tools like FedACH and Fedwire by using a traditional bank as an intermediary. SusieX can now send $500 from her PornHub account to her Paxum wallet. She can then tell Paxum to send some of the funds to her regular bank account. Alternatively, if she doesn’t have a bank account she can apply for a Paxum prepaid card and link it to her Paxum wallet. SusieX can then spend her earnings as she would a regular bank account-linked debit card. [On 13 Oct 2019, TOJ had an article about pecans and alternative currency in Louisiana prisons. The article above is another good reason why some folks NEED an alternative way to get paid. This sounds like a variation on the method described in the pecan article in October. Ron P.]
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