PayPal cracks down on erotica e-book sales

Remember when Amazon started removing various kinds of erotica from its store? It’s happening again, this time with a number of independent e-publishing sites such as All Romance and Smashwords. Today, Nate Hoffelder called attention to an e-mail from Mark Coker of Smashwords to authors who publish through the platform.

Coker reported that PayPal had issued Smashwords an ultimatum regarding certain categories of erotica published through the site. If books in these categories were not removed, PayPal would stop doing business with the site. Because Smashwords relies so heavily on PayPal as a payment processor, the site is left without any feasible alternative:

You might wonder if Smashwords should simply switch to a different payment provider. It’s not so easy. PayPal is designed into the wiring of the Smashwords platform. They run the credit card processing for our retail store, and they’re how we pay our authors and publishers. PayPal is also an extremely popular, trusted payment option for our customers. It is not feasible for us to simply switch to another provider, should such a suitable provider even exist, especially with so few days notice.

As Hoffelder points out, the categories of erotica being removed aren’t even important in and of themselves. Some people will find them icky, but others enjoy them—and who the hell is PayPal to appoint itself the arbiter over what is and is not acceptable to publish?

It’s the monopolist in the field of online payments, that’s who. It’s been issuing this same demand to other sites, and meeting the same success everywhere. There just isn’t any good alternative to PayPal when it comes to taking and making credit card payments online.

I was going to say that this is an illustration of the danger of allowing any one company to monopolize too much of the market in its field of business. I was going to draw parallels to Amazon in that respect. But a little further research revealed that PayPal may not even be the root cause in and of itself. In a blog post looking at the matter, Selena Kitt explains that credit card companies charge higher premiums for taking payments for services where there is a high risk of chargebacks—such as erotica and porn.

Paypal doesn’t want to have to pay Visa and MC for carrying “high risk” accounts on their books. You have to remember that Paypal is a middleman. Sites that carry high-risk material have to pay the high-risk costs of doing business. If you’re going through Paypal, you don’t have to pay that. Until Paypal catches you. And then they insist you take down your high-risk content or lose your account.

So the icing on the cake is that PayPal isn’t even doing this out of moral concerns (though it can certainly claim it is and look better), but because it’s a money matter. But it’s choosing to use morality as a pretext for a purely financial matter instead of, say, passing on higher rates to erotica publishers. Of course, it would probably have the same effect in the end since the prohibitive fees are one of the things that keep stores from moving to other payment processors.

And the categories of erotica being removed are so broad as to endanger a lot of the most popular fiction on the Internet today. For example, they involve incest and “pseudo-incest” (relations between step-parents and children), and “bestiality” so broadly defined that Coker has to write:

Note this does not apply to shape-shifters common in paranormal romance provided the were-creature characters are getting it on in their human form. Sorry I need to clarify it that way, but we don’t want to see bestiality erotica masquerading as paranormal romance.

leppy-hug
Is this bestiality?

So where does this leave the anthropomorphic furry fiction that is so popular on the Internet now, such as the “Paradise” series, if its authors decided they wanted to publish it? What about chakats, who are highly-libidinous feline centaurs? Of course, chakats would also come under the “incest” prohibition—being genetically-engineered creatures with their own culture, and created to remove the random genetic errors that are magnified by incest, they don’t have a taboo against it. Some readers will find that icky, but I find it interesting from a standpoint of cultural relativity.

(The irony is that Bernard Doove, the chakats’ originators, had just posted a few days ago to the chakat mailing list about having to remove or censor a number of erotic illustrations to get one of his works into Amazon, Smashwords, and other such stores. I imagine his books may be short-lived on these sites after all.)

Erotica is one of the most popular genres on the net today, as well as one of the prime movers behind early e-book adoption (so that people could read what they wanted anywhere without having to be embarrassed by sexy covers). It’s a pity that payment processing concerns are making it so hard to sell it.

18 Comments on PayPal cracks down on erotica e-book sales

  1. It should also be said that Smashwords had the opportunity months ago to separate out the incredible influx of questionable material in to a separate entity when they did their reorganization. The material in question could have been listed under a name such as Smashwords Redlight, and then only the erotica there would have been under Paypal’s ban. They chose not to take that step. While I abhor any form of censorship, that would have been a practical solution. While I have no right to ask my corner drugstore to carry items it considers objectionable, so with Paypal. These sites had the opportunity to create their own webstores, cutting out the middleman – therefore giving Paypal no power. They chose not to do that either.

  2. Hmmm…wonder if they will be tossing Disney’s Beauty and the Beast and Michael J. Fox’s Teen Wolf under the category of G-Rated bestiality?

    I removed two of my stories from Smashwords, The Legend of The Raperbeasts, and its sequel from Smashwords. It is a sci-fi about an alternate world (and my best seller) – of a man-like creature.

    While one might consider it bestiality, it is actually an exploration into how society manipulates women and gets them do fall into line with what is expected.

    I suppose, PayPal is in essence the Raperbeast.

  3. Hopefully Visa’s V.me will arrive soon, then at least you will have the option of paying the higher fee …

    “When Do We Start Calling eBay A Payments Company?”

    A tale of two clunky, unprofessional commercial entities: eBay and PayPal

    http://bit.ly/wpl5DT

    eBay / PayPal / Donahoe: Dead Men Walking

  4. “Selena Kitt explains that credit card companies charge higher premiums for taking payments for services where there is a high risk of chargebacks—such as erotica and porn.”

    Then why is Paypal allowing other types of erotica to remain?

  5. @Maggie Chatterly —

    Your question reminds me of a confrontation I had with a police officer cousin in the late 1960s. Over dinner, he was regaling everyone with the story of how he had led a bust of the local x-rated movie theater and how proud he was to have closed it down. I asked the basis for the raid and his response was that a citizen had complained (the citizen hadn’t entered the theater or seen a showing; the citizen was simply offended). I told him that I wanted to do my civic duty and file a complaint, too, against an immoral movie and theater. Thinking he could add to his glory, he asked for the name of the movie. My response: “Mary Poppins.” After all, aside from nefarious deeds, what other reason could there be for an adult to be flying in and out of children’s bedrooms in the middle of the night or for kidnapping the children using “fairy dust” (or did she really mean “angel dust”, a streetname then for heroin?).

    Needless to say, he wasn’t amused. But I tried to make the point that one person’s objectionable material is another person’s innocuous material and that the way to deal with x-rated theaters was to simply not attend. Ultimately, if they were unwanted in the community, they would go out of business for lack of business; if they prospered, then the community wanted them. I discovered that social conservatives believe that the only moral choice is their choice.

  6. The main issue with puritans is that they’re mortally afraid that somewhere, somehow, somebody is having fun.
    Can’t have that.

  7. In much the same way that authors and publishers went with Amazon for ebooks, taking advantage of a relatively easy-to-use system, and now find themselves under pressure to do business the way Amazon wants it done… so sellers went with PayPal’s easy-to-use system, and are now being pressured to do business PayPal’s way.

    This is always the hazard, when choosing a third-party system for its low cost or ease of use: Eventually, any change they make can become a painful and even business-changing problem. And if that third party is a monopoly, there is no way to challenge or negotiate with them… you change or you die.

    Fortunately, there are other electronic and online payment systems out there… in fact, some of them specialize in erotic content transactions. PayPal’s efforts here may be enough to encourage some of those other payment systems to reach out for new customers, offering a “non-judgmental” service to sellers and users.

    We will hopefully also see new services offered by other players, such as the major banks or credit card companies, giving sellers and users more options for doing online transactions.

    And when we have that, PayPal can restrict its services to everyone except mimes, for all the difference it will make.

  8. Felix – you are SO right.

  9. This story should be titled “How PayPal Is Driving the Adoption of Bitcoin.” Of course, PayPal/eBay will lobby (i.e., buy legislation) against Bitcoin. Watch for that in 2012 or 2013 at the latest.

  10. who the hell is PayPal to appoint itself the arbiter over what is and is not acceptable to publish?

    PayPal is only appointing themselves the arbiter over payments for what they will or won’t process, which they have every right to do. The authors are free to publish their works; they are free to sell them whenever they want. Smashwords was free to choose whether to continue selling the works without PayPal or not.

    This is *not* censorship, as no one is prosecuted or goes to prison over it. By using this word here, you are causing an inflation to its meaning and harm the fight against real cases of censorship.

  11. Steven, where is a list of those third party services? One more thing. I use e-junkie with paypal, and the alternatives to paypal seem to be a LOT more expensive than paypal’s 5+5% for micropayments.

  12. Google “online payment system,” and you’ll see a list of organizations capable of handling online payments. I have not personally investigated any of them, so I cannot say how well they compare to PayPal’s services. But other services are there; and if they think that PayPal is going to open up gaps in its services, I’m sure some of the others will step up in an attempt to fill them, and maybe steal some of PayPal’s less controversial business as well.

  13. Oh, but Paypal does the same thing with other things it considers – well, whatever they consider it. Electronic cigarettes, for example.

    And no, I don’t think a middelman who makes really good money by transfering money has any rights to decided who pays for what, as long as it’s legal.

  14. This sounds like a glorious opportunity for some company to swoop in and compete with paypal.

  15. who the hell is PayPal to appoint itself the arbiter over what is and is not acceptable to publish?

    Simple: they’re obviously the owner and the one spending the costs to maange that free online service, where people don’t pay a big upfront fee to join and be able to send and receive money to others for something. They do deserve flak for how they handled other issues like taking money from customers whose accounts they shut down, but that’s a separate issue and one they’ve (hopefully) learned from since then.

    Besides, they can’t stop you from publishing your stuff on, say, YOUR web site, right? Neither can they stop you from using another payment provider who – although might charge higher fees – is willing to take you in, can they?

    A funny thing is, we also have that same so-called right to censor whoever uses OUR stuff. Do you really want some higher-up, namely your government, to censor that as well, especially to be able to censor and/or block out jerks?

  16. So many authors are losing out on selling their books too. The way I see it is exactly what was said above ~
    who the hell is PayPal to appoint itself the arbiter over what is and is not acceptable to publish?

  17. who the hell is PayPal to appoint itself the arbiter over what is and is not acceptable to publish?

    As mentioned before, PayPal can dictate what people can and can’t do if/when using their stuff. But the good things are no one’s necessarily bound to them, and they can’t stop you from using another provider who might sell such material.

    Just don’t use them. Problem solved, and life goes on.

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