PayPal's new aggressive campaign wants to stop independent e-book publishers that use its service from including certain kinds of erotic content in their catalogs.
On Saturday February 18, PayPal began threatening indie book publishers and distributors with immediate deactivation of the businesses' accounts if they did not remove books containing certain sexual themes - namely, specific sexual fantasies that PayPal does not approve of.
PayPal told indie e-book publishers and retailers - such as AllRomance, Smashwords, Excessica and Bookstrand - that if they didn't remove the offending literature from their catalogs within a few days of notification, PayPal would close their accounts.
Of course, the immediate termination of payment processing would devastate these businesses and all of their authors (not just the erotic writers) overnight.
In case you haven't noticed, PayPal has a monopoly on the market of online payment processing. There are few alternatives, though none that are widely used by online shoppers.
One corporation begins to shape an entire market
Smashwords had little choice. On February 24, Smashwords sent a letter to all of their authors saying that it was being forced to make PayPal's guidelines about erotic literature the new rules for content Smashwords would publish and distribute from now on.
All of the Smashwords authors were told in an email that if they want to see their work published and distributed through the popular alternative e-book e-tailer, they will need to make sure their works of fiction conform to PayPal's acceptable use definitions of sexual fantasies.
Bookstrand went nuclear, and completely eliminated most of the indie titles from their catalog.
AllRomance has decided to stop publishing books that focus more on sex than romance - they are effectively purging all titles that are primarily sexually explicit storytelling "where sex [not romance] drives the story" from their catalog.
It's a curious thing for PayPal to begin policing content in erotic books. Though they have a mighty hammer with which to enforce their morality.
PayPal would ban works by Anaïs Nin, Vladimir Nabokov, Henry Miller, Marquis de Sade and books like Caligula, The Sookie Stackhouse Novels (True Blood), The Story of O, Venus in Furs, Lolita...
So, what kind of fantasy sex in books is PayPal telling indie publishers is not okay?
They include a number of subjects that many would consider offensive or disturbing in real life - but they included one area of sexual fantasy that is fairly popular in real life between consenting adults.
PayPal told the booksellers they may not sell works of fiction that include sexual fantasies containing themes and implied scenarios of: pseudo-incest (including "daddy" fantasies, step-family), incest, fantasies about non-consensual sex or rape, bestiality (widened to include non-human fantasy creatures), and BDSM.
Under the new PayPal policy, Mark Corker of Smashwords told all the Smashwords authors they would also have to remove paranormal romance that included shape-shifters - if the shape-shifters were to have sex in their non-human forms.
When PayPal told Excessica's Selena Kitt that BDSM fiction was not allowed in her catalog she wrote on her blog (selenakitt.com NSFW),
That’s right - they weren’t just targeting illegal acts between non-consenting adults. Now they were targeting legal sex between consenting adults.
For what it's worth, BDSM includes a very wide category of sexual practices that are legal in the United States, and its activities and fantasies are not regarded by psychiatrists as an illness or disorder.
Determining what is acceptable to publish
One argument put forth as to why PayPal would not want to be the middleman for porn or "edgy" sexual content is that sexual content carries the constant risk of buyer's remorse: people buy it, are ashamed or regretful or whatever, and want their money back.
So the thinking is that Paypal doesn't want to have to be charged by credit card companies for chargebacks on "high risk" accounts that carry adult content.
But PayPal merchants control returns and refunds on each and every sale: when a customer submits a refund request, the merchant is the one that issues the refund - and it's the merchant that has to PayPal return fees for the refund.
In addition to the fact that mitigating the cost of chargebacks and refund costs are an easily solvable problem: PayPal could easily bleed "high risk" merchants with higher fees.
Anyone that has done any kind of business online related to erotic content knows that PayPal will not do business with porn websites (or merchants that run websites that PayPal deems to be pornographic).
Many early sex bloggers who did not consider their blogs to be porn - merely artistic erotic imagery - found this out that hard way when PayPal changed its policies to exclude doing business with porn sites back in 2003 (when it was bought by eBay).
But the new development in PayPal's moral standards bears serious examination.
Erotic writing has always been at the forefront of internet reading, and erotica - dark edges and all - was at the forefront of e-book adoption due to the privacy the form factor affords consumers.
And despite how you feel about the topics of sexual fantasies PayPal won't tolerate, you must admit that the fringes of literature are important.
Some people will find [the banned sexual themes] 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?
I think it's a dark day for independent book publishers, book distributors and authors when a company that has no vested interest in literature determines the content of the books that these small businesses can carry.