PayPal to Fine Gambling, Porn Sites

scubacuda writes "Yahoo! reports that PayPal is taking an aggressive stance against gambling, adult, and non-prescription drug sites: anyone caught using PayPal for these purposes will be charged $500. Eric Jackson, a former PayPal executive and author of the new book 'The PayPal Wars,' calls the new policy 'draconian' and says it is likely a two-fold strategy to discourage certain behavior while heading off regulators."

Comments

How productive.

[rincebrain]

Now, instead of only worrying that we'll get crappy porn, we have to worry about having our money stolen, and NOT getting crappy porn!

How?

[Nos.]

What right does paypal have to fine people. If its against the terms of service they could shut down the offending account, but fine them?

Re:How?

[hattig]

Not to the tune of $500 though.

Remember credit cards are YOU borrowing money from someone else.

Paypal is YOUR money.

Most bank charges and fees (they are not called fines) occur when YOU start eating into THEIR money, by being overdrawn, etc. You don't get fined because some of your money in your account came from you doing something illegal or immoral (according to the bank).

Ebay does have Adult items

[lecithin]

What is the difference? They(ebay) list adult items, why could you not pay for them via Pay Pal?

Re:Ebay does have Adult items

[mcknation]

Well I did some *research* on this topic just now. ;)

Ebay hides all adult items in a catagory called "Mature Audiences". There is all kinds of stuff in this catagory. Sex toys. Elargement pills all kinds of stuff.

However not ONE single auction in this catagory allows paypal as a method of payment. My guess is that the forbid it entirely...even on ebay

/-McK

How is this going to work for ebay?

[sgant]

Paypal is owned by ebay right now...but how is this going to work if you buy your adult stuff ON ebay?

Ebay does have a whole adult section where you can buy movies, toys etc etc...so will this effect it?

Fined by the same company that your buying adult things from.

Sounds too me like a double standard in the works. I don't think Paypal is trying to discourage this behavior that it finds objectionable...because if it did, then ebay would remove the entire adult section from it's site also.

Just and observation

I'm sure they are just being practical.

[FunkSoulBrother]

Being someone who does online sports betting, PayPal cut us out a little over 2 years ago.

But it was a practical, not moral cut in my opinion.

The fact of the matter is that in the gambling, adult and I suppose the drug business, you get way too many people who purchase the "product" and then get buyers remorse, and raise all kinds of hell at the card provider, saying it was never them but nefarious internet hooligans who gambled with their Paypal account, or bought that porn subscription to Fatchicks.com.

It became so bad at least in the gambling world that Paypal said the hell with it, and left. Now we have similar providers, but more personal responsibility, too. I actually like it that way.

What's Next?

[BalorTFL]

I really hope that this isn't the beginning of a new trend. How long until VISA won't let you buy beer or cigarettes and MasterCard charges a 50% tax on Penthouse? When payment methods start enforcing their own moralities on their costumers, something is seriously wrong.

Re:What's Next?

[mark-t]

This has nothing to do with enforcing certain moralities on you.

Paypal and credit card companies couldn't care less about your personal moral character. What they *DO* care about is making money, and certain classes of purchases have a much higher rate of fraudulent activity than others. Online purchases in general and especially online pornography in particular has an absolutely _huge_ level of fraudulent use compared to most other credit card activities. They are only trying to avoid the chargebacks that would follow such fraudulent uses as these radically cut into the amount of money they are going to make.

I can say one thing though... your CC company will not ever try to stop you from making a purchase in person, regardless of the nature of the item (barring credit limit issues, of course). According to a representative at VISA that I spoke to when I was talking to them about a merchant account, CC fraud incidence is lowest in transactions which expect a physical signature (and if you don't actually _check_ those signatures, you could end up losing your merchant account).

Don't Hate Paypal

[Anonymous Coward]

Almost every single reply so more is complaining that its none of Paypal's business to enforce their morals on the user. Anyone who has said something like that is a mindless slashdot troll who doesn't know anything about 3rd party processing or merchant accounts. Most merchant account providers have banned adult sites and gambling for years because they are High Risk Industries. Its not just adult and gambling, many processors also ban game servers, IRC-related sites, MLM schemes, make $3000-working-from-home-sites, etc. These types of websites are highly likely to attract stolen credit cards, credit card fraud, and chargebacks. It costs the merchant provider money every time a chargeback is done, and it takes both time and money to fight a chargeback. So please do a little research into the world of credit card processing before you go on a rant about PaPal's religious crusade. They are simply trying to decrease fraudulent transactions. If you don't agree with their policies or the $500 fine, you can opt to use a different company which does allow adult and gambling merchants, but beware you will probably have higher transaction fees, more thorough background checks, and possibly a several day ACH hold on any funds you receive.

Re:Don't Hate Paypal

[Jah-Wren Ryel]

Anyone who has said something like that is a mindless slashdot troll who doesn't know anything about 3rd party processing or merchant accounts. Most merchant account providers have banned adult sites and gambling for years because they are High Risk Industries

Ah, so they want the easy part of the business but not the hard part. I can understand that.

But in turn, I think we need to ask if Paypal is a monopoly. Just how much of all e-commerce passes through paypal? How much of the under $100 market? How much of the person-to-person market? I wouldn't be suprised if paypal had acheived monopoly status in at least one of those markets.

If they are a monopoly, having successfully squeezed out competition, only to begin with-holding sevices, they need a kick in the ass from the FTC because that's abusive.

By the way, it has already been pointed out once so far, and that post got a +5 rating, but the point really needs a +11 rating.

PAYPAL IS FINING THE CUSTOMERS TOO!!

So, if there ever was a time make sure that you had a dummy, empty bank account linked to your paypal account, now is it. All you need is for paypal to arbitrarily decide that you are the kind of customer that they don't want, and poof! there goes $500 from your bank account that you will probably never see again. Maybe even multiples of $500 depending on just how much customer abuse paypal thinks they can get away with since they are unregulated.

Re:E-Gold -- screw that

[hlygrail]

Anything that resizes my browser window automatically gets a /dev/IGNORE entry from me.

Man I hate that... not to mention the ads and pop-ups.

Who cares? There are other services out there.

[ellisDtrails]

Use FIREPAY or NETTELLER (google them for info). They are RELIABLE and they aren't interested in being Big Brother or monitoring your online habits.

F Pay Pal.

Re:Pissing off your Enemies for $10.00

[LordK2002]

Your enemy will be fined $500.00 for just $10.00 and a few emails. Not a bad return on investment, eh?

And so will you, if you read the Acceptable Use Policy.

This is not an issue of fining just websites, it is an issue of fining users, as has been pointed out in other comments.

This is what makes it unacceptable and is why I have chosen to discontinue my use of PayPal.

K