PayPal Dumps Porn Next Week
From techtv: The most popular online payment service, PayPal, is soon going PG. Beginning June 12, online adult merchants will have to take the PayPal option off their websites. Buyers can still get the merchandise in many cases, but they won't be able to use PayPal as their intermediary.
PayPal's parent company, eBay, explains the move as a business decision. It says there's just too much fraud in the industry.
One example cited by the company has a husband ordering raunchy movies online, but then disputing the charges with an "it wasn't me" excuse.
San Francisco business owner Shar Rednour doesn't dispute the fact the industry has a large number of charge-backs. However, she says that doesn't include her company, S.I.R. Video.
"We've never had one charge-back. We've only been a gold-star business owner with them," Rednour says. S.I.R. Video has used PayPal services for one year. Rednour says that without PayPal, she'll stop selling merchandise from her site and stick with wholesale.
She claims the other options available, such as opening a credit card merchant account, cost too much for her small business. Visa USA, for example, charges "high risk" fees to adult online businesses.
"We feel like we didn't do the crime, [so] why do the time?" Rednour asks. She believes decisions should be made on a business-to-business basis, instead of penalizing the entire industry. "It's just prejudice," she says.
PayPal spokesman Kevin Pursglove says that's not the case.
"The mature audience category continued to be the single category where there were always additional costs involved -- administrative, charge-backs, transactions going bad," Pursglove says. "As much as we appreciated the fact that it would be an inconvenience for some sellers, the bottom line [is] it was just a business decision."
The ban includes eBay, which hosts auctions for adult products in its "mature audience" category. Buyers can use cash, money orders, or credit cards from issuers that haven't banned such transactions. EBay prohibits pornographic downloads.
This isn't the first controversy between PayPal and online merchants. Last fall eBay banned the processing of online gaming transactions. Again, the company cited fraud and regulatory uncertainty.
For business owners such as Rednour, however, those business decisions are going to hurt. "If you're a small business, every dollar counts," she says. "That money [brought via PayPal] is a small percentage, but it definitely helps pay the rent."
Gene sez: One reader tells me they've been using Citibank's https://www.c2it.com/C2IT/Login
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