Paypal Clampdown - More about money than morals?

Paypal has drawn the ire of a lot of self-published erotica authors by requiring Smashwords to remove books with certain subjects from their platform. Those subjects include rape for titilation, incest, pseudo-incest (that's sex between someone and their step-parent), and bestiality.

There is a lot of ranting about censorship and danger to free speech. "Moral guardians run amok" seems to be not the only possible explanation, however.

Selena Kitt includes some findings in her blog post Slippery Slope: Erotica Censorship. (That's the website of an erotica author. It didn't look terribly racy to me, but I'm not 100% certain it'd pass as "safe for work".)

What I discovered was that most merchant-services (i.e. companies that allow you to use Visa and MasterCard on their site) which allow adult products charge a $5000 up-front fee to use their service. Then, they take exorbitant percentages from each transaction. Some 5%, some 14%, some as high as 25%.

Now it was starting to make more sense. The credit card companies charge higher fees for these “high-risk” accounts because there is a higher rate of what they call “chargebacks.” You know that protection on your credit card, where if you dispute the charge, you don’t have to pay for it? Well they’ve determined that happens more with porn and gambling and other “high-risk” sites than others, so they’re justified in charging more money to process payment for those sites.

So worst case, and friendliest interpretation for Paypal: If Paypal allowed porn, the credit card companies would classify all of Paypal as a high risk account, with higher fees that would have to be passed down to the customers.

The scenario that suggests to me is lots of people buying porn, their spouses seeing it on their credit card bill, the buyers going, "No, I never bought that!" and getting chargebacks, until credit card companies took notice. It brings us back to morals, but as a more spread-out factor than a random crackdown from a small group of moral guardians: Porn being a "guilty pleasure" a lot of people won't admit to.

Reality is always more complicated (why are incest, rape and bestiality singled out if the issue is "adult" content?), but the business angle should not be ignored.

[P.S.: If you care about my opinion on the topic of "is it OK to make certain books hard to impossible to sell?"... well, I dislike the topics listed, but considering it logically, murder is pretty disturbing, too, and some of my favourite books feature a hired killer as a viewpoint character, so it would be right hypocritical to support banning other fiction.]