People working in the sex industry face discrimination on many levels. One of the less visible, but extremely consequential forms of discrimination is the denial of services by financial institutions. Like any other industry, the sex industry depends on reliable financial services in order to operate. Even in jurisdictions where sex work is perfectly legal, however, businesses and individuals in the industry report widespread difficulties in accessing even basic financial services, and this in turn has an impact on their daily lives, long-term futures and even their physical safety.
Tash* has been working in a Melbourne brothel for around two years, where she makes anywhere between $300 and $1500 per shift. Rather than being paid by bank transfer as happens in most workplaces, she gets paid in cash at the end of each shift.
"What that means is that when I'm leaving work at 3 or 4am, sometimes I have a lot of cash on me," she says. "It becomes a safety issue for me, carrying that much money around at that time in the morning."
While Tash would prefer to be paid by bank transfer, she knows that for brothel managers it can be difficult finding financial services even for basic business management such as paying employees. “There are certain banks that brothels don’t work with,” she says.
This comes as no surprise to Jules Kim, CEO of Scarlet Alliance. Scarlet Alliance is a sex worker’s association run by and for sex workers. It runs community education, awareness and advocacy campaigns in addition to campaigning for the rights of sex workers.
“Stigma and discrimination have a huge impact on the sex industry, and financial services are a key part of that,” Jules says. “Some banks will deny services to clients who have been banking with them for years if they find out the client is a sex worker.”
An October 2017 survey of business owners in the adult industry (including adults-only retailers and wholesalers) found that 66% reported a recent incident of discrimination by one of the ‘Big Four’ banks, including having merchant facilities withdrawn with little or no warning.
The risk of losing access to banking services is something Tash is very aware of. When she is depositing her cash payments into her bank account, she structures them carefully in order to avoid appearing suspicious.
“I have an ABN as a sub-contractor – which is what I am, technically – and I’m paying tax on my income. I just don’t say what I’m a sub-contractor for.”
She’s considering leaving the brothel to work independently, but there are challenges there too. Navigating payments and bank accounts as a private escort comes with privacy and security concerns for both workers and clients.
“A lot of private workers use separate bank accounts with very vague names,” Tash says. Some also accept payments in gift vouchers or prepaid Load&Go cards as a safer alternative to both cash and bank payments, which leave workers at the mercy of the policies of financial institutions.
“Often we have situations where the policy for that financial institution might have been set in another jurisdiction, for example somewhere in the US, where sex work is criminalised and so they’ve created a policy of not working with clients who are sex workers, and that ends up impacting sex workers in New South Wales where sex work is not a criminal activity,” says Jules Kim.
“Some of it also has to do with the complexity of the laws for sex workers, so for example what’s legal can vary from state to state or depending on whether you’re working in a brothel or are self-employed.”
These issues are by no means unique to the sex industry. Financial institutions are able to cope with similar levels of complexity with the gambling industry. Concerns about anti-money laundering obligations due to the large amount of cash in the industry are also not unique to the sex industry; hospitality and retail also handle very large amounts of cash in their businesses, and rarely experience the same sorts of difficulties accessing financial services.
“What it really comes down to is discrimination, this kind of moral judgement which views sex work as inherently bad or immoral or criminal even when it’s not criminalised in that jurisdiction,” says Jules.
This discrimination doesn’t just create unnecessary extra hassles – and risks – for sex workers in the short-term. It can also have serious implications on their financial security and opportunities long-term.
“On top of the discrimination, some financial institutions also have this attitude that sex work isn’t ‘real work’,” says Jules. “When a sex worker applies for a loan, for example, they often get denied even if they meet all the requirements and can provide proof of income.”
Denying sex workers access to credit makes it extremely difficult for them to make major purchases which contribute to their future financial security, such as buying a home.
Discrimination is not limited to the traditional financial institutions such as banks and credit agencies. The increasingly central role of the internet in the sex industry has created a range of new platforms and payment options, but with new opportunities has come new potential avenues for discrimination.
One prominent example of this was the move by MasterCard and Visa to stop allowing payments with their cards in the adult section of Backpage.com, a classified advertisement site which has become a major international platform for the sex industry. The companies made the decision to pull their services in response to a campaign by a sheriff in Chicago, but the effects rippled around the world including Australia. Online classifieds sites like Backpage are particularly important for sex workers who are new to the industry or have less money to spend on advertising, which means that the more vulnerable members of the industry are the most impacted when services are cut off.
Paypal is also infamous for freezing sex workers’ accounts or even seizing their funds. Paypal’s Acceptable Use policy explicitly forbids the use of its services for activities which "relate to transactions involving ... items that are considered obscene ... [or] certain sexually oriented materials or services." Some sex workers have been banned for life from using Paypal, regardless of what they may want to use it for in the future. Paypal has put pressure on crowd-funding sites Patreon and WePay to stop allowing users the option of paying through Paypal for sex workers’ fundraising efforts. In one particular case WePay shut down sex worker Eden Alexandra’s attempt to crowdfund for her medical bills as she suffered from multiple organ failure (the company later apologised after a public backlash).
Where mainstream financial services have pulled back, less orthodox players may be keen to fill the gap. Bitcoin advocates and some sex workers themselves have begun developing resources aimed at educating sex workers on how to use Bitcoin to make or accept payments.
The advantage of Bitcoin is that there is no centralised authority or set of policies governing what it can be used for. The flipside of this is that it has often been associated with illicit transactions such as drug running, arms trading and ransomware, and so the use of it is unlikely to help fix negative perceptions of the sex industry. The extreme volatility of Bitcoin (hypothetically, a sex worker could be paid $300 worth of Bitcoin one evening and by the next morning it might be worth $500 or it might be worth $100) and the simple fact that it is not yet widely used or even understood by many people also make Bitcoin an infeasible solution for most sex workers in the near future.
The reality is that this issue is unlikely to be resolved until the underlying causes are addressed – the stigma and discrimination faced by people working in the sex industry. There should be no excuse for discrimination against the industry in jurisdictions where sex work is not criminalised. Discrimination premised in the idea that sex work innately immoral and harmful to workers misses the point that denial of access to financial services is in itself a cause of substantial difficulties, risks and long-term negative effects for people who, ultimately, are just trying to do their jobs.
* not her real name
Learn more about Scarlet Alliance here.