The web has changed the way we communicate and the way we do business. A lot of sales happen online, and a lot of small businesses rely on the web. One of the tools they rely on is PayPal, an organization that exists only because of the web. After all, anyone can create a website, and register a URL. No one wants to enter their credit card info on a unknown site that could look like it's trying to sell you vitamins or handcrafted jewelry or used books, when really all they want is your credit card numbers so the can scam you. Hence, the creation of PayPal, a company that limits your risk. It's a godsend for small businesses, and in many ways, Smashwords is a small business.
It turns out that Smashwords is using PayPal as their billing and payment system. They even use it to pay their authors. I had noticed that it has been a long time since Smashwords updated their other retailer info (February 2 for Barnes and Noble is still the most recent reported other retailer sales; Sony is still stuck at January 28 and Apple at December 31). I was wondering whether the holdup was on the retailer end or at Smashwords. I think it must be Smashwords because the news has broken that PayPal is forcing Smashwords to remove any books that violate their standards. Specifically, they're targeting erotica books that contain instances of sex with underage kids, rape "for titillation," bestiality, incest, and similar sorts of plot lines. Here's the email Smashwords sent to authors affected by this, and here's their revised terms of service as posted on Smashwords
Since I don't write erotica, it's tempting to think I'm not affected, but of course, I am, because anything that affects Smashwords affects authors who publish on Smashwords. Besides, there is also the question of is this the censorship camel's nose in the self-publishing world's tent? It's interesting that this has gotten a lot of attention on author, reader, and reviewer blogs but there is not a word about it on the Washington Post site. Besides, who's to say PayPal won't decide they don't like science fiction or fantasy? All in all, it's a really scary development, and not just because it's making Smashwords too preoccupied to post more current sales information.
Addendum: some additional background info was posted here on the Dear Author blog.