I have a buddy that used to own a brothel in Arizona. He said he got a lot of chargebacks, but he would dispute them with the physical signatures and generally won.

Do you mean Nevada? When was prostitution last legal in Arizona? 1918 as far as I can tell.

I mean Arizona. He was aware his business was not legal.

Am I the only one dying to learn more about this? How was he running a brothel in AZ?? Was it near the border?

I'm surprised that such a person was willing to create such an extensive paper trail for their crimes, and that their customers were willing to go along with it too. If I were trying to hire a prostitute and the matter of my signature on a contract came up, I would conclude it was a police sting and GTFO.

Then again I don't hire prostitutes in the first place. I suppose those that do probably have a higher tolerance for criminal risk.

[Citation needed] on moral concerns?

Nah, they asserted an “extremely high number of chargebacks” which wasn’t the justification mentioned in the article.

It's the same thing. Payment processors often ban sex-related businesses not out of prudishness or brand risk but simple financial risk controls.

The evidence on this is readily available via Google. Just search for high risk industries for payment processors, it will always include sex industry stuff.

I think the chargeback scenario here isn't cards which are actually stolen. It's that someone makes a purchase, their spouse notices it on the credit card statement, and they deny it.

Then in order to sell the lie to their spouse, they call the credit card company and say, "Of course I didn't make those purchases! I would never do such a thing! I'm not some kind of pervert! Remove these charges immediately or I'll close my account!"

And then the credit card company's thought process is like, "Well, you probably did! But we can pretend you didn't, if that's what it takes to keep you as a customer so we can keep making money off you."