PayPal Stops Sex Merchandise Payments

More than 50 percent of all sales on eBay involve PayPal, which has 25 million registered users and is growing at a rate of 28,000 transactions per day. Its popularity, not only on eBay but also the Web in general, makes PayPal one of the most lucrative divisions of eBay, which purchased the Mountain View-based company in October.

When PayPal stops processing payments of adult-themed downloads on May 12, 2003 customers who want to purchase pornographic streaming video or photographs must send money orders or checks to vendors, or use credit cards, which some porn sellers don't accept directly.

On June 12, PayPal will extend its ban from downloads to tangible products, such as magazines, books, DVDs, videotapes and sex toys. The ban extends beyond eBay, which already bans pornographic downloads, to all e-commerce sites.

EBay will continue to list 90,000 items in its thriving "mature audiences" category. But prospective buyers will have to send a check or money order, or use a credit card if merchants accept them.