A few days ago, Smashwords wrote to its authors to say they were being forced to censor certain erotica titles on the insistence of Paypal. Now I don’t read or write erotica but I care very much that other people should be allowed to. I also care that corporations should not be allowed to dictate what literature is available so long as that literature is legal – and it is, in this case.
Smashwords is a company that relies heavily on Paypal to process payments for books and to pay royalties to its authors. If Paypal were to withdraw its services, Smashwords would be forced out of business. So Smashwords is complying with Paypal’s demands, while trying to talk them into a more reasonable position. Meanwhile, writers are receiving shocking emails from Smashwords, like this one, received by Tess Harding.
Smashwords reports that Paypal is claiming they are under pressure to do this by the credit card companies they deal with – and without which their own business could not survive. These companies almost certainly include MasterCard, Visa and American Express. You’re probably wondering, like me, why these financial giants are so concerned about public morality that they would take the extraordinary step of censoring legal books. The only answer I’ve seen so far is in a post by writer Selena Kitt. I quote,
“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. Paypal doesn’t want to have to pay Visa and MC for carrying “high risk” accounts on their books. “
Here is a letter I intend to send to Paypal (based on one sent by writer Robert Szeles). Please feel free to use it yourself or modify it as you please. A similar letter will go to my credit card company.
I am writing to protest Paypal’s refusal to process payments on certain types of literature distributed through Smashwords and other digital distributors.
I do not want Paypal determining what I can and cannot read. It is not your place to do so. If Paypal continues this practice, I will seek another vendor to process my future payment transactions, which would be disappointing, as I have been very happy with Paypal up to this point. I will be contacting the major financial institutions that Paypal claims are putting pressure on it to protest their involvement as well.
Whatever problems the credit card companies may have with porn and gambling sites, it is no excuse for censoring books. None whatsoever.
(In case you’re looking around: 17 Paypal alternatives for e-commerce )