Paypal is bailing from the pron biz! Big time bucks will now be available
from this 'millicent ghetto.'The word is out on the street and the rush
is on.Cypherpunks write code...and rake it in! Come in SEALAND!
MOUNTAIN VIEW, Calif. - In the same week a news link Website that
opposes a U.S.-Iraq war accused PayPal of selective censorship in closing
its account, the online payment system announced formally what's been
rumored for at least a few weeks: It's saying goodbye to the adult
Internet.
In a new series of guidelines governing "mature audiences,"
PayPal said it will process transactions for pre-1980 adult-oriented
items bought at online auctions and the like, but it will no longer
process memberships to adult Websites or payments for sexually oriented
videos, magazines, or photographs made after 1980.
PayPal will continue to process payments for a number of adult novelties,
"include[ing], but ... not limited to: items which are intended for
use in a sexual setting (such as "bondage" and
"fetish" items), items which display sexual activity or portray
human genitalia in a "life-like" or realistic fashion, and
vibrators intended for use in sexual activity (as opposed to ordinary
massagers)" � but they have to be auctioned in the "mature
audiences" section of eBay, with which PayPal merged last
year.
Adult sites will have to remove PayPal from their payment alternatives by
May 13, according to Kevin Pursglove, eBay's public information
spokesman. He said accounts will be allowed to stay open long enough for
the users to remove any of their funds still in the accounts. People who
want adult materials and are willing to obtain them from eBay and some
other auction marketplaces can still use PayPal, he said.
Why is PayPal pulling back from the adult Net? Pursglove said it was
mostly a question of financial risk. "Like any company, PayPal has
to find the right balance between serving the needs of a large, diverse
group of customers and minimizing financial risk," he said.
"Over the last several months or years, there's higher financial
risk associated with adult. And [adult's] actually a very small part of
PayPal's business."
First Amendment attorney Lawrence G. Walters said he figured PayPal was
pulling away from the adult Net when several of his clients, whom he
would not name, received short notices from PayPal canceling their
accounts as of mid-May. "They said to one client that after
reviewing financial factors, they concluded this change is the best
course of business," Walters said by telephone from his Florida
offices. "They didn't say what those factors are, and I don't know
if that can be taken at face value."
Walters said there was plentiful speculation among adult businesses who'd
received similar notifications, ranging from potential government
prosecutions to PayPal deciding adult is as much a potential liability as
online gaming, from which PayPal backed away after merging with
eBay.
"At the point of the eBay merger, it didn't have an effect on
adult," Walters says. "But something may have happened between
then and now to cause them to re-evaluate that. And it's very
disconcerting. When you take this in combination with what happened with
Visa, the little guy is having a difficult time competing. PayPal was a
viable alternative for people who didn't want to set up a corporation and
registration fee that Visa imposed. Now, that apparently is not an
option."
PayPal's adios-adult move arose in a week that was already somewhat
aggravating for the company. Barely having announced its initial public
offering, PayPal was slapped with a class-action lawsuit accusing it of
illegitimate restriction of customers' access to their own money. The
suit accuses PayPal of locking customer accounts if fraud is suspected,
whether the amount in question is small or large, meaning customers can't
work any more PayPal-conducted payments or withdraw any of their money
until PayPal clears a transaction, according to the lawsuit's filing
attorney, Gail Koff.
This came in the same week as
WhatReallyHappened.com accused PayPal
of deciding that doing business with controversial politics was less
acceptable than doing business with porn sites � even porn sites, the
news-link site charged, that "abet" child porn and
pedophilia.
WhatReallyHHappened.com's Website includes a singular link to a page
devoted entirely to PayPal and its recent news and problems. The page
features the following note that WhatReallyHappened.com received from
PayPal canceling their user agreement: "As you know, the PayPal User
Agreement states that PayPal, at its sole discretion, reserves the right
to close an account at any time for any reason. We write to inform you
that, after a review of your site, and in accordance with the User
Agreement, your account has been closed. Your funds will be held for 180
days from the date of the last transaction on the account. After 180 days
have expired, we will refund your funds by mailing a check to the address
linked to your account."
A correspondent's comment on politechbot.com � the message and
correspondence board run by noted Web journalist Declan McCullagh �
suggested PayPal was getting dangerously close to setting itself up as a
selective censor. "While Paypal as a private company certainly has
the right to choose with whom it does business," the comment said,
"tying up donations people have made to support a political cause
for half a year does seem a tad dishonest."
A tad dishonest isn't exactly the way WhatReallyHappened.com puts it.
"As an experiment, type the words 'PayPal' and 'Porno' into any
search engine," the site noted on its PayPal information and links
page. "[We] used Google and got a list of hundreds of pornography
web sites that PayPal does not seem to have any qualms about doing
business with!"
Among other stories to which WhatReallyHappened.com has links is one one
GuluFuture.com, another "alternative" news site, which slammed
PayPal in an alliterative headline: "PayPal Porn Promotes
Pedophilia." The story accused PayPal of "enabling sex offers
which can lead to increased incidence of pedophile acts � despite a
campaign by the porn industry itself to outlaw services which glorify or
legitimize sexual acts with minors."
The accusation didn't seem to bother Pursglove when he was asked about
it. "Oh, we get slammed by everybody every day," he said.
"That's the price you pay for being as large and successful as
[PayPal and eBay] have become."
But attorney Walters said PayPal's withdrawal from adult amounts to a
"further censorship of the adult industry, although it's not direct
government censorship. It will impede access to adult
material."
Walters said the withdrawal could cause "a lot of people" to
reverse course with adult while causing others to look at other options.
"PayPal didn't have a large share of the market," he said,
"so the direct effect won't be big. Small Webmasters will be hurt,
but we'll see the rise of alternative payment processors, and they'll be
benefited. But the real question could be what will the credit card
companies do?
"You hate to think there's something going on behind the
scenes," Walters continued. "I don't share a lot of the
conspiracy theorists' ideas. But it sure is getting more and more
difficult for an adult Webmaster to get paid. What are we going to have
to do, start accepting cash in the mail?"
There's only one problem facing any rise of alternative payment
processors and it's a conundrum, according to VirtualSexMachine.com Chief
Executive Officer Eric J. White: Until a new company cements its own
reputation, it's likely to face an uneasy time trying to accumulate
clients.
"People are automatically suspicious of the adult industry,
everybody in the adult industry," White said. "Anybody that
slaps up an adultpay-dot-com kind of thing is going to be suspect, until
they get a consensus of the online adult merchants to go along with them
and have a good base, like Adult Check does. They already have a trusted
customer base, and a successful product. If they were smart, they'd jump
right in with a new payment scheme now."
White said he thinks PayPal's withdrawal from the adult Internet is more
eBay's doing than PayPal's itself. "Now, it looks like eBay doesn't
have to deal with adult," he said. "They don't need us, so why
deal with the hassle? I don't think the PayPal management had anything to
do with this. They weren't concerned about the material more than the
risky sales."
http://www.avnonline.com/issues/200303/newsarchive/031403_lead.shtml
