Lilith
05-12-2003, 07:31 PM
submitted by dadaist
By RACHEL KONRAD
SAN JOSE, Calif. (AP) - It could soon be easier to buy adult videos at your local sex shop than through the Internet.
PayPal, a subsidiary of eBay Inc. (EBAY) that processes payments anywhere in cyberspace, will stop taking payments for most adult-themed merchandise over the next five weeks. Other electronic payment services, including Yahoo! and Visa USA, have also tightened restrictions on sexually explicit items.
That means people who want to buy sex toys or digital photos will have to send a check or money order or submit credit card information directly to the merchant - removing a layer of anonymity.
The clampdown is drawing complaints from vendors in one of the oldest, most lucrative and recession-proof sectors of e-commerce. They say San Jose-based eBay is enforcing morality at the expense of small businesses.
The world's largest online auctioneer says the restrictions aren't about morals, but money.
There's too much fraud in online sex merchants' transactions, said eBay spokesman Chris Donlay. "They felt their attention was better spent on other businesses," he said.
EBay's move comes half a year after Visa USA quietly changed some rules for sex merchants.
In November, San Francisco-based Visa USA added to its "high risk merchant" classification any seller of digital images. Such merchants must register directly with Visa rather than use third parties for billing.
Online sex merchants sometimes use third parties to mask a vendor's identity, to stymie an inquisitive spouse.
Visa's policy shift aimed to help reduce "chargebacks," transactions that cannot be completed, often because of fraud from the vendor or buyer.
Roughly 7 cents per $100 charged on Visa cards in the United States are chargebacks. The rate is far higher for adult-oriented purchases, said Visa USA director Rosetta Jones, declining to offer specifics.
"For many years, we've required high-risk brick-and-mortar merchants to be registered, and this is really an extension of an existing policy," said Jones, who emphasized that the company was not trying to dictate moral standards.
Although Visa now requires some sex merchants to pay a $500 initial registration fee and $50 per year afterward, PayPal restrictions could sting even more.
PayPal allows customers to put money into a secure account so they don't have to provide confidential bank information to online retailers, whom they may not know or trust.
More than 50 percent of all sales on eBay involve PayPal, which has 25 million registered users and is growing at a rate of 28,000 transactions per day. Its popularity, not only on eBay but also the Web in general, makes PayPal one of the most lucrative divisions of eBay, which purchased the Mountain View-based company in October.
When PayPal stops processing payments of adult-themed downloads on May 12, customers who want to purchase pornographic streaming video or photographs must send money orders or checks to vendors, or use credit cards, which some
porn sellers don't accept directly.
On June 12, PayPal will extend its ban from downloads to tangible products, such as magazines, books, DVDs, videotapes and sex toys. The ban extends beyond eBay, which already bans pornographic downloads, to all e-commerce sites.
EBay will continue to list 90,000 items in its thriving "mature audiences" category. But prospective buyers will have to send a check or money order, or use a credit card if merchants accept them.
Customers won't be able to pay through PayPal rival Yahoo! PayDirect, either. Adult-themed purchases also violate the Sunnyvale-based company's long-standing service agreement.
PayPal, which also bans payments for tobacco, lottery tickets, used air bags and human corpses, will continue to handle payments for condoms, which are considered a medical supply or health product; works of art that are considered risque but not pornographic; and magazines published before 1980, which are considered collector's items.
The changes anger Bob Ramstad, owner of Seattle-based Condom Country, which sells condoms as well as some restricted items. Ramstad, who transacts about 3 percent of his company's sales through PayPal, says the payment rules confuse adult-themed material with pornography, and it reflects poor business acumen.
"We're letting people avoid going to an X-rated store in the red light district," said Ramstad, who founded his online shop in 1994 and has never had a PayPal chargeback. "It's unfortunate that moralism spills over into the corporate world. If I were a shareholder of eBay, I'd say, 'This is stupid.'"
By RACHEL KONRAD
SAN JOSE, Calif. (AP) - It could soon be easier to buy adult videos at your local sex shop than through the Internet.
PayPal, a subsidiary of eBay Inc. (EBAY) that processes payments anywhere in cyberspace, will stop taking payments for most adult-themed merchandise over the next five weeks. Other electronic payment services, including Yahoo! and Visa USA, have also tightened restrictions on sexually explicit items.
That means people who want to buy sex toys or digital photos will have to send a check or money order or submit credit card information directly to the merchant - removing a layer of anonymity.
The clampdown is drawing complaints from vendors in one of the oldest, most lucrative and recession-proof sectors of e-commerce. They say San Jose-based eBay is enforcing morality at the expense of small businesses.
The world's largest online auctioneer says the restrictions aren't about morals, but money.
There's too much fraud in online sex merchants' transactions, said eBay spokesman Chris Donlay. "They felt their attention was better spent on other businesses," he said.
EBay's move comes half a year after Visa USA quietly changed some rules for sex merchants.
In November, San Francisco-based Visa USA added to its "high risk merchant" classification any seller of digital images. Such merchants must register directly with Visa rather than use third parties for billing.
Online sex merchants sometimes use third parties to mask a vendor's identity, to stymie an inquisitive spouse.
Visa's policy shift aimed to help reduce "chargebacks," transactions that cannot be completed, often because of fraud from the vendor or buyer.
Roughly 7 cents per $100 charged on Visa cards in the United States are chargebacks. The rate is far higher for adult-oriented purchases, said Visa USA director Rosetta Jones, declining to offer specifics.
"For many years, we've required high-risk brick-and-mortar merchants to be registered, and this is really an extension of an existing policy," said Jones, who emphasized that the company was not trying to dictate moral standards.
Although Visa now requires some sex merchants to pay a $500 initial registration fee and $50 per year afterward, PayPal restrictions could sting even more.
PayPal allows customers to put money into a secure account so they don't have to provide confidential bank information to online retailers, whom they may not know or trust.
More than 50 percent of all sales on eBay involve PayPal, which has 25 million registered users and is growing at a rate of 28,000 transactions per day. Its popularity, not only on eBay but also the Web in general, makes PayPal one of the most lucrative divisions of eBay, which purchased the Mountain View-based company in October.
When PayPal stops processing payments of adult-themed downloads on May 12, customers who want to purchase pornographic streaming video or photographs must send money orders or checks to vendors, or use credit cards, which some
porn sellers don't accept directly.
On June 12, PayPal will extend its ban from downloads to tangible products, such as magazines, books, DVDs, videotapes and sex toys. The ban extends beyond eBay, which already bans pornographic downloads, to all e-commerce sites.
EBay will continue to list 90,000 items in its thriving "mature audiences" category. But prospective buyers will have to send a check or money order, or use a credit card if merchants accept them.
Customers won't be able to pay through PayPal rival Yahoo! PayDirect, either. Adult-themed purchases also violate the Sunnyvale-based company's long-standing service agreement.
PayPal, which also bans payments for tobacco, lottery tickets, used air bags and human corpses, will continue to handle payments for condoms, which are considered a medical supply or health product; works of art that are considered risque but not pornographic; and magazines published before 1980, which are considered collector's items.
The changes anger Bob Ramstad, owner of Seattle-based Condom Country, which sells condoms as well as some restricted items. Ramstad, who transacts about 3 percent of his company's sales through PayPal, says the payment rules confuse adult-themed material with pornography, and it reflects poor business acumen.
"We're letting people avoid going to an X-rated store in the red light district," said Ramstad, who founded his online shop in 1994 and has never had a PayPal chargeback. "It's unfortunate that moralism spills over into the corporate world. If I were a shareholder of eBay, I'd say, 'This is stupid.'"