What's Going On With R18? Where Does This Lead?

The following are the ZENRA admin's thoughts on some of the possible reasons behind what has been happening, recently, at R18.

After intently following the news around R18 along with other adult card processing developments within Japan—most notably DMM in May restricting the use of foreign-issued cards and more recently Jade hunting for a new foreign card-OK processor—my theory about this entire saga can be summed up with three letters: JCB.

As I noted here, the world learned many things during Russia’s ongoing “special military operation” in Ukraine. Early on, the world cheered as they were cut from SWIFT alongside card giants Visa, Mastercard, and others pulling out.  As we soon learned though, life... uh, finds a way.

Card giants pulling out of Russia did not in fact cause much damage to your average plastic-wielding citizen.  It turns out that some years earlier a nationalized credit card system entitled MIR was created almost for this reason. PRC also has one. As does Japan.

While JCB may have been created less out of potential geopolitical tension and more out of simple technologic necessity (after all, it predates MIR by decades!), my money is now on the secret to JAV being able to openly shoot types of content that the West cannot even think about touching is due to JCB.  Not a religious country and thankfully lacking the strong socially conservative movements such territories seem to produce, Japan has been pretty open with most forms of sexual artistic expression. Certainly, JCB will never process any illegal content and it seems so long as said content complies with local norms and regulations, it’s OK in their book.

That brings us to the modern era and R18 (though we can lump here any Japan-hosted adult site that allows foreign credit cards to be used). My belief based on publicly available information is from its inception till very recently, R18 was simply piggybacking off of DMM’s processing arrangements.  Most likely sometime last year, just as Mastercard issued updated rules for adult merchants, JCB may have done something similar.

Why does this matter? Going back to Japan like Russia and PRC having their own domestic processing, there is a good chance that ‘Visa’ and ‘Mastercard’-brand plastic issued in Japan simply are something along the lines of white-label JCB cards.  The ‘processing network’ in Japan be it Visa, Mastercard, and others may be operated entirely by JCB.  However, due to the interconnectivity of worldwide commerce, foreign cards are allowed to run on the network.  But perhaps time has caught up with the ‘foreign cards can buy (potentially) non-complaint adult content loophole’ with—and do note this is a theory—JCB receiving a diktat from these foreign and much larger card companies that they will not allow their cards to be used for buying things they normally would not allow processing for.

Thus, a complex saga full of fast and gargantuan delistings, a lack of communication from the powers that be, R18 first using some unknown processor before seemingly losing access to it followed by hastily switching to a wonky DMM point/cash card workaround, can either be a most decidedly complex tale of corporate mismanagement and financial black magic or simply JCB—and DMM--protecting itself.

Now, where does this all lead to? Will Japanese-hosted platforms see a return to a walled-off approach with foreigners simply unable to buy higher-risk content?  Will piracy rise? Possibly and most likely.

For a site like R18, it would be incredibly easy to simply unpublish all risque content and get foreign processing.  There is a slew of adult-OK billing providers that would salivate over having a legal site R18’s size as a client (and of course, nothing is preventing R18 from having multiple billing providers as this is a very standard practice in our industry).  There are also now many non-credit-card methods they can add.  My money is on slow upper management not wanting to use billing services not located outside of Japan.  Sites like Jade that use one domain to cater to both Japanese and foreigners are in a tougher spot but have an easy workaround: create a new domain for foreign sales and only put up content that would pass international processing muster.

I don’t see R18 shutting its doors though it’s in a very sad position at the moment. I don’t see Japanese sites turning inward. With the new law, they’ll need more eyes with wallets than ever before.  Furthermore, more and more potential performers are skipping mainstream JAV and either opting for amateur/FC2 work or even going a ‘creator’ route by doing it all on their own. The mainstream industry now more than ever is in a rough patch. With adult content of professional quality now even being produced in another part of East Asia, even on the mainstream-level front, they now have rivals and it’s all done without mosaic. JAV, I believe, will adapt and porn will continue because porn will always be in demand.

If my theory turns out to be accurate, could JCB eventually align its adult compliance rules with international standards?  If they do, that could be an essential “JAV apocalypse” as overnight thousands upon thousands of full-length movies by certain drama studios and extremely hardcore BDSM would become unprocessable.  That JAV—and here I define it as basically anything shot in Japan, openly sold in Japan, and of course with mosaic—has been able to produce such ‘unique’ content for so long has been a mystery and also a ticking time bomb.

As of July 20th, 2022 DMM made a surprising announcement that “their contract with Mastercard has concluded”. This applies not just to Fanza, but their entire network of sites from FX trading to English lessons and more. While it’s possible, given their size, that this is some unusual strategic decision (think a certain wholesale chain only allowing one type of card for some time), given all the recent events noted in this article, this is most likely related and could have devastating consequences. What to look out for, of course, is whether DMM will add the card back in the future, whether or not titles already delisted at R18 are removed from DMM, and whether other Japanese platforms like Duga follow in their footsteps.