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These payment processing authorities have also coerced websites to cease featuring sexual content under threat of service withdrawal, all while blaming ambiguous rules or pressure from one another. Monday a federal appeals court ruled that pressuring credit card companies like Visa and Mastercard to stop doing business with speech-protected websites violates their First Amendment rights. Specifically ones that feature content from sex workers.

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Pornography helped usher in the early era of digital payment processing—but not long after that grand debut, the forces of smut and commerce had something of a falling out. Most mainstream payment processors—think PayPal, Stripe, and WePay, to name a few—decided to avoid dealing with those pesky additional fees by creating a total ban on anything adult. The headache doesn't end there: Payment processors' bans on adult content have the secondary effect of shutting XXX merchants out from other kinds of sites that use those payment platforms—like, for instance, the crowdfunding sites that many independent creators now turn to to support their work.

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If the ebook seller pays out royalties to authors via PayPal, they could not distribute those royalties to their authors. For a lot of the ebook vendors, this is a huge issue, because PayPal is the most widely used proxy payment system whereby a small business can circumvent the burden of setting up a vendor account with the credit card companies themselves. If you need some background to understand why, you cannot do better than this Wired article.

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