The Paypal Ultimatum, part 3

Okay, I think that I am becoming obsessed with this PayPal vs. Smashwords thing. I’ve posted about it twice before, and this makes number three. For those of you just joining us here in my little loop of insanity, let’s have a recap:

PayPal told Smashwords that they were selling “controversial” (incest, bestiality, rape for titillation) eBooks, and if they wanted to keep their account with PayPal, and the ability to pay people, they had better remove them from the website. Smashwords chose to stand their ground and try to work out a compromise, gaining allies like the Electronic Frontier Foundation,, The Coalition Against Censorship, and quite a few others. And let’s not forget the writers that would undoubtedly be caught up in this.

PayPal, according to their blog, says that this was a business decision. Their reasoning is that if they prohibit their resources to be involved in the sale of this ‘potentially illegal’ taboo-sex-stuff (aka “the icky”), then it should keep them out of any and all legal trouble. Considering that Smashwords already as restrictions in existence that prohibit the publishing of anything considered to be illegal, Paypal’s argument seems a little flimsy, but okay, whatever.

At first glance, it just seems to be an abhorrence to “the icky”. But if you search eBay, Paypal’s parent company, those same types of books, and sometimes worse, are still available on there, and you still use PayPal to perform the transaction. This itself warrants a cock-eyed glance, besides the righteous indignation of those that would be affected and already are effected over at

Now, you may want to get your tinfoil hat for this next part. In the wake of the announcement from the US D.o.J. that they are considering leveling charges against Apple and several big publishers for allegedly agreeing to ratchet up eBook prices, some people are beginning to think that the anti-taboo sex push by PayPal may not totally be a coincidence. Other theories go as far as to say that there is an agreement between eBay/PayPal and Amazon to better corner the eBook market and the money that goes with it. (The Kindle Fire is  being sold at a loss, after all.) None of if seems totally implausible, especially since I’ve been over Paypal’s User Agreement and can find no such wording prohibiting the sale of erotica through their system. (If I’ve missed it, please point it out to me.)

What I think:

PayPal made a business decision. I understand that, and God help me, I can respect it. Do I agree with it? No. Since they are such a widely used transaction middleman, I find it odd that they would be so willing to turn away a rather profitable book genre. However, I did read a theory that they may be cleaning house of any and all “high risk” merchant shops.  But if that’s the case, why not make a new price tier and charge a bit extra for processing fees, instead of turning away current and potential users. There are already a few companies, and more starting every day, that would love to get a piece of Paypal’s action, and are probably licking their chops right now.

I know that there are already ongoing efforts to persuade PayPal to at least ease up on their restrictions a bit, and I hope that they succeed. However, I learned young that  you need to expect the worst and hope for the best. PayPal has been notoriously stubborn in the past about suspending accounts and refusing to allow donations to certain organizations. (Remember Wikileaks?) We need to develop our own contingency plans just in case PayPal does pull the plug on Smashwords and the other publishers and e-book companies caught up in this row.

I am already looking for alternatives sell my work from my own website, although I am nowhere near needing them at this time. Some of what I have been looking at are Simple Pay through Amazon Payments, E-junkie, and Avangate. There are also a number of Payment Gateway Services available.

If this ultimatum does in fact go south, then we will just have to learn to do some living without PayPal. It won’t be easy in the beginning, but we will just have to learn to manage.

My previous posts on this subject:

First SOPA, and now this

Paypal and eBook censorship


4 thoughts on “The Paypal Ultimatum, part 3

      1. Gotcha well I mean paypal made a business choice and I do think it is their right to turn away customers. While I do see that it is unfair and there does seem to be bias there I guess it is there right…sorry if that is not what you want to hear.

      2. It is there right to do so, but a lot of us involved in this are concerned that this could just be the tip of the iceberg. This week is the highly taboo sex (even some of the BDSM writers have even reported getting unpublish and shut down notices). Next week it could be works depicted gay/bisexual intimacy. Where does it stop?

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