PayPal, eBay, Visa, and MasterCard Equate All Kinky Erotica with Pr0n

Trouble in the Erotic Midlists

The latest bad news in the fight against moral prudery has reared its ugly head in the erotica writing community.

Here’s a short timeline of what happened:

1. Smaller independent ebook vendors like Bookstrand and All Romance eBooks allow self-published authors to sell their books in their online stores.

2. Ebook sales explode. Opportunists with varying degrees of writing skill churn out pseudo-ince$t and b@rely legal erotica, and they upload it to these sites.

3. The bestseller lists of places like Bookstrand and ARe fill up with kinky titles and badly PhotoShopped Man-Titty and well, All Types of Titty covers.

4. Customers complain. Word somehow gets out to PayPal.

5. PayPal does a keyword search, records titles it finds “obscene” according to eBay policies (because eBay owns PayPal), and threatens to freeze Bookstrand’s entire PayPal account.

6. Bookstrand removes its self-published authors page, changes its Terms of Service page for authors, and threatens to remove authors altogether if they don’t comply with the takedown requests.

7. Authors are seriously pissed off. Bookstrand starts removing titles spontaneously before the window for authors to do so is up.

8. Even though erotica is not legally pr0n, Selina Kitt points out that PayPal considers anything BDSM to be rape. She learns this when her own ebook store, eXcessica, receives similar takedown demands.

9. ARe receives the same threat from PayPal and emails its authors, but warns them in a more friendly manner.

10. Bookstrand orders its authors to re-categorize their erotic as either romantic erotica or just erotica. Suspicions abound as to whether this is simply a tactic to weed out the stories without romance in them so as to ban them entirely in the future.

Which brings us to the present, when many independent authors, both the good and the bad, are abandoning Bookstrand in droves, they and other authors are pulling their titles from ARe, and eXcessica is in limbo as Ms. Kitt tries to find another payment processor.

The Problem with PayPal

No matter how lousy PayPal’s customer service is, no matter how many accounts they freeze and bridges they burn, there’s no avoiding the fact that it’s basically the only affordable game in town for small businesses. Other merchant card services charge hefty fees and take large percentages on top of those from each transaction.

Joe Konrath suggested forming an online store in the comments to one of Selina’s posts, seemingly ignoring the main point that Kitt makes: she already has her own store, partly because of pr0n police incidents like these on Amazon and Barnes & Noble. It won’t do her or anyone else ANY GOOD unless they can process payments. Customers don’t want to write checks for ebooks. That kind of misses the whole point of instant gratification.

In order to run an online store, you have to be able to process payments from credit cards.

While I will credit Konrath with simply trying to be helpful, not only is this idea useless to Kitt, it belies the very reasoning that Konrath uses to justify agents as e-distributors: Time Is Money. The reason I started a publishing cooperative with a couple of other people is because we don’t have time to do all of the work ourselves and have to contract some of it out. If I didn’t want to write, I would gladly become a small press and pay royalties and blah blah blah…well, no I wouldn’t, because my privacy measures would be shot, but  would definitely find a way to work in that capacity somehow. However, I want to write books.

It All Goes Back to the Credit Card Companies

I can already hear the next suggestion coming: someone else will form their own payment processing company with no qualms about adult entertainment! Hurray! The free market wins again! …Except there already are other payment processors out there who work for the adult entertainment industry, and their service fees are prohibitively exorbitant:

So I started to search for alternatives to Paypal. Not an easy task, I might add. Like Amazon, they are a veritable monopoly in their field. At least they graciously (ha) gave us thirty days to comply, after which the account would be frozen or cancelled. So I had some time. What I discovered was that most merchant-services (i.e. companies that allow you to use Visa and MasterCard on their site) which allow adult products charge a $5000 up-front fee to use their service. Then, they take exorbitant percentages from each transaction. Some 5%, some 14%, some as high as 25%.

Now it was starting to make more sense. The credit card companies charge higher fees for these “high-risk” accounts because there is a higher rate of what they call “chargebacks.” You know that protection on your credit card, where if you dispute the charge, you don’t have to pay for it? Well they’ve determined that happens more with porn and gambling and other “high-risk” sites than others, so they’re justified in charging more money to process payment for those sites.

The problem with this thinking is literature is not pr0n. Pr0n, as I am calling it on this site to avoiding Google spam, is sexually titillating material in visual form, i.e. pictures and/or video. We haven’t had an obscenity in literature case hit the Supreme Court since 1973 because that ruling basically said erotic literature is not pr0n. Despite what Mary Beth Buchanan thinks or how personally revolting any given person may find paedo-bear or Rape and Dismember The Kids! fiction, that 1973 ruling in favor of Henry Miller’s Tropic of Cancer has drawn a clear line between visual and written adult entertainment. Doing horrible things to people fictionally is not the same as doing those things to real people, nor is there any decisive link between reading those types of stories and acting on them in meatspace (IRL).

Unlike actual pr0n-producing film or picture production companies, your average low-budget e-publisher does not start out with and may never have enough money to justify shelling out 5 grand a month just to receive payments, let alone the profit margins to justify cutting a 25 percent slice out of every sale.

The risk of chargebacks and fraud is probably far less on erotica than it is on other forms of adult entertainment, but apparently no one has explained that to Visa and MasterCard.

No Good Solutions

Even if erotica authors were to band together and somehow form their own payment processor AND convince the cc companies they aren’t a high-risk pool (this is presumably an insurance problem), that’s one service provider, one group that can dictate the terms it wants and is subject to the whims of the cc companies, who can decide at any point that catering to erotica is a waste of time and raise their rates.

Moreover, the categories of excluded content now permitted at currently operated vendors are so broad as to include almost anything remotely sexual beyond the missionary position could potentially be reported if someone is offended.

I agree that the allegations of unconstitutionality are stupid and wrong, but that doesn’t mean that it’s ethical for a small group of service providers to price erotica out of business.