From the same article:That article just kind of proved the point it's not the CC's.
PayPal said it was acting in part because banks and credit card companies it works with restrict such content, according to an email PayPal sent to Smashwords on February 24. Reuters obtained copies of the emails.
"Our banking partners and credit card associations have taken a very strict stance on this subject matter," PayPal said in the February 24 email. "Our relationships with the banking partners are absolutely critical in order to provide the online and mobile services we (offer) ... to our customers. Therefore, we have to remain in compliance with their rules, which prohibit content involving rape, bestiality or incest."
It is even less acceptable for large financial institutions such as credit card companies to start making arbitrary decisions about what is and isn’t obscene. It’s not their job to act as moral arbiters, defining taste and effectively banning certain types of content from sale. If content is not clearly illegal, people should be able to both publish and purchase it. If content is straying into a grey area of legality then it is for the law, however flawed that law is, to challenge it.
I recall when all this went down, and it affected other payment processors too, not just PayPal. Numerous news stories from the time pointed out the banks and cc companies applying pressure through their terms and conditions.
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