Remember when Amazon started removing various kinds of erotica from its store? It’s happening again, this time with a number of independent e-publishing sites such as All Romance and Smashwords. Today, Nate Hoffelder called attention to an e-mail from Mark Coker of Smashwords to authors who publish through the platform.

Coker reported that PayPal had issued Smashwords an ultimatum regarding certain categories of erotica published through the site. If books in these categories were not removed, PayPal would stop doing business with the site. Because Smashwords relies so heavily on PayPal as a payment processor, the site is left without any feasible alternative:

You might wonder if Smashwords should simply switch to a different payment provider. It’s not so easy. PayPal is designed into the wiring of the Smashwords platform. They run the credit card processing for our retail store, and they’re how we pay our authors and publishers. PayPal is also an extremely popular, trusted payment option for our customers. It is not feasible for us to simply switch to another provider, should such a suitable provider even exist, especially with so few days notice.

As Hoffelder points out, the categories of erotica being removed aren’t even important in and of themselves. Some people will find them 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?

It’s the monopolist in the field of online payments, that’s who. It’s been issuing this same demand to other sites, and meeting the same success everywhere. There just isn’t any good alternative to PayPal when it comes to taking and making credit card payments online.

I was going to say that this is an illustration of the danger of allowing any one company to monopolize too much of the market in its field of business. I was going to draw parallels to Amazon in that respect. But a little further research revealed that PayPal may not even be the root cause in and of itself. In a blog post looking at the matter, Selena Kitt explains that credit card companies charge higher premiums for taking payments for services where there is a high risk of chargebacks—such as erotica and porn.

Paypal doesn’t want to have to pay Visa and MC for carrying “high risk” accounts on their books. You have to remember that Paypal is a middleman. Sites that carry high-risk material have to pay the high-risk costs of doing business. If you’re going through Paypal, you don’t have to pay that. Until Paypal catches you. And then they insist you take down your high-risk content or lose your account.

So the icing on the cake is that PayPal isn’t even doing this out of moral concerns (though it can certainly claim it is and look better), but because it’s a money matter. But it’s choosing to use morality as a pretext for a purely financial matter instead of, say, passing on higher rates to erotica publishers. Of course, it would probably have the same effect in the end since the prohibitive fees are one of the things that keep stores from moving to other payment processors.

And the categories of erotica being removed are so broad as to endanger a lot of the most popular fiction on the Internet today. For example, they involve incest and “pseudo-incest” (relations between step-parents and children), and “bestiality” so broadly defined that Coker has to write:

Note this does not apply to shape-shifters common in paranormal romance provided the were-creature characters are getting it on in their human form. Sorry I need to clarify it that way, but we don’t want to see bestiality erotica masquerading as paranormal romance.

Is this bestiality?

So where does this leave the anthropomorphic furry fiction that is so popular on the Internet now, such as the “Paradise” series, if its authors decided they wanted to publish it? What about chakats, who are highly-libidinous feline centaurs? Of course, chakats would also come under the “incest” prohibition—being genetically-engineered creatures with their own culture, and created to remove the random genetic errors that are magnified by incest, they don’t have a taboo against it. Some readers will find that icky, but I find it interesting from a standpoint of cultural relativity.

(The irony is that Bernard Doove, the chakats’ originators, had just posted a few days ago to the chakat mailing list about having to remove or censor a number of erotic illustrations to get one of his works into Amazon, Smashwords, and other such stores. I imagine his books may be short-lived on these sites after all.)

Erotica is one of the most popular genres on the net today, as well as one of the prime movers behind early e-book adoption (so that people could read what they wanted anywhere without having to be embarrassed by sexy covers). It’s a pity that payment processing concerns are making it so hard to sell it.