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PayPal Is Bringing Sexy Back

The payment processor will no longer blacklist adult content creators on the crowdfunding platform Patreon

When subscription-based crowdfunding platform Patreon announced to the adult content creators on its site July 12 that, for the first time in over two years, they would be able to accept payments using PayPal, the news came as a welcome surprise.

PayPal, the most recognized name in online payment processing worldwide, had been off-limits to those producing sexy content on Patreon since March, 2014, when PayPal vowed to stop all payments to the crowdfunding website because it allowed creators on its platform to profit on adult-themed content — largely erotic comics, games, hentai and the like. Patreon, backed into a corner by PayPal’s unexpected and time-sensitive threat, alerted its adult-oriented users that their accounts would be flagged as NSFW and blocked from search results, and their payments restricted to credit cards only, in order to avoid catastrophe for everyone using the site. Patrons who had been using PayPal to support adult content creators were required to change their payment methods, or payments would be frozen and ultimately lost.

Though PayPal is only one possible payment method, its popularity made losing it a tough prospect for many creators. “I had just joined up when the Paypal cutoff happened, and almost overnight I had lost more than 75 percent of my patrons because [of] Paypal,” said Patreon user Infected Colors, who makes homoerotic illustrations.

But Patreon wasn’t the first to feel pressure from PayPal about adult content. In 2003, PayPal announced that it would no longer process payments for adult content of any kind. Since then, it has become notorious among adult merchants for freezing accounts — sometimes refunding payments and sometimes freezing them and imposing lifetime bans on users who transgress its murkily worded Acceptable Use Policy, which forbids activities that “relate to transactions involving… items that are considered obscene…[or] certain sexually oriented materials or services.”

“PayPal has such vague terms,” adult content producer and porn performer Kitty Stryker said. “It could mean so many things!” And PayPal has used that vagueness as it pleases. Merchants and crowdfunding hopefuls around the world — sex workers, porn stars, filmmakers, artists, even “sexy” garment sellers — have drawn PayPal’s wrath for getting erotic online and asking for compensation, sometimes even when the payments in question had nothing to do with sex work or adult content.

Stryker was using Patreon to fund her writing and related activities — but not the films she stars in and produces — when PayPal dropped the hammer back in 2014. As she wrote for The Frisky, her ability to pay her bills was in question “simply because I’m a porn performer, and some people decided to donate money for my non-pornographic writing via PayPal instead of directly from their credit cards.”

But it’s not just PayPal that punishes NSFW content. PayPal’s prohibition on adult merchants has become the norm for most other payment processing companies, but the fear of adult business is a trickle-down effect from the rest of the finance industry, which is, in a word, contemptuous of adult content. The early days of the internet owe a lot to porn, but porn itself — along with most other adult businesses — was lumped in with “high-risk” merchants like gambling websites and loan consolidation in the early 2000s, when porn sites were plagued by high rates of chargebacks, in which consumers deny having made purchases that appear on their bills and demand their money back. Although most adult merchants today receive few chargebacks, they are still considered high-risk, which means they are subject to higher charges on transactions and yearly fees to credit card companies. Most payment processors, like PayPal, simply won’t do business with them, and those who will often charge extremely high fees — over 10 percent per transaction.

Naturally, crowdfunding platforms need to stay on payment processors’ good sides, so most of them refuse to work with adult merchants. A few adult-focused crowdfunding websites have popped up to fill the void, but there again, the reluctance of payment processors to get involved creates a major obstacle. All things told, the internet can be a very difficult place for adult content creators — especially small, independent ones — to make a buck.

Not so at Patreon, which has welcomed creators of adult content since its inception in 2013, even after its run-in with PayPal the following year. With Kickstarter outright forbidding pornographic material and GoFundMe prohibiting “sexually explicit material, sexually suggestive material, adult services or products,” and “pornography of any kind,” Patreon’s comfort with non-photographic smut is a veritable beacon of possibility for adult content creators. As hentai artist Norasuko told MEL, “I think Patreon is very accommodating as far as crowdfunding platforms go. Most of them are strictly against porn.”

When Patreon was compelled to restrict its NSFW creators’ payments to credit cards, it strove to keep creators’ accounts functional and to protect their interests. Stryker said that when she was worried about her income after the PayPal cutoff, Patreon even “sent me an advance on the next month’s payment so I could pay rent.” Patreon resolved not to abandon adult content creators, and, in December, 2014, the site amended its community guidelines to specify: “We allow nudity and suggestive imagery, as long as it is marked NSFW.” When Norasuko asked for clarification, Patreon responded, “We do not allow photographic pornography, but we do allow non-photographic (drawn, sculpted, or computer generated, for example) sexual imagery.”

Over the following year and a half, it appears, Patreon has been hard at work on behalf of its adult content creators, trying to win back what they lost. And on July 12, Patreon sent an email to users announcing a PayPal about-face: “We were able to convince PayPal, or more specifically their subsidiary Braintree, that Adult Content creators on Patreon are not a serious risk. Our content policy, and the nature of subscription payments, means that Adult Content creators on Patreon are less risky than most creators making adult content.” Patreon’s adult creators, both PayPal and Patreon believe, will generate few chargebacks or fraud allegations, making the financial hazards to the payment processor negligible. Furthermore, the e-mail stated, “We also have a very diverse mix of content types, so even if our Adult Content creators are higher risk than other types of creators, Patreon as a whole is less risky.”

When MEL contacted Patreon for details, associate marketing manager Taryn Arnold was only able to say, “Unfortunately, our team is not giving any further info on it other than the announcement that was sent out to all creators.” But, she added, “We are really excited about [the agreement] and the way it can benefit our creators and help self-expression through art take all forms possible.”

PayPal may not be exactly opening its arms wide to smutty businesses — as of this writing, the company was declining to answer press inquiries — but their agreement with Patreon could be the beginning of a shift that might open the doors to profitability for small adult content creators. Norasuko says, “I’m a bit afraid now because who knows when they rules might change again.”

Patreon seems to feel the same trepidation. As their email to adult content creators put it, “We are very happy about this victory, but the payment industry does not provide much transparency around payments for adult content… We will continue to work towards more certainty around these issues, but for now we feel that the benefit of allowing PayPal payments for Adult Content creators outweighs any hypothetical risk that it may change in the future.”

Patreon runs payments at the beginning of every month, so it’s not clear yet how well this process will work for adult content creators processing payments through PayPal. But this could signal the beginning of a shift in payment processing for adult content online. “It’s the first chip in the idea that adult material is high risk,” Stryker said.