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If I remember correctly the issues of pre-paid porn cards were that of distribution and residual value for the paysite after all the people in the distribution chain got their cut. A $20 pre-paid porn card might only bring $5 to the paysite owner, with little or no chance for an upsells or renewals.
How does it happen? Consider the margins at each level - card management (the system) needs some cash. The distributor of the cars needs some margin and a reason to collect the money from the end sellers. The end sellers need to make markup on what they sell. Just like phone cards, where the store retailing the cards for $10 are only paying maybe $6 per card (local stores in Chinatown montreal sell $10 cards for $8 or so, if you ask in the nice chinese way - and they are still making $2 per card).
I had this discussion with someone at a show about this about 5 years ago, and I can't see that the situation has gotten any better.
Alex
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