May 23, 2004
Paypal moves further away from money
Paypal have announced their new list of "unacceptable goods" as covered by Wired . It includes such odd things as human body parts, event tickets, batteries, food, medical equipment, malls, copies of software, ...
The list is 64 items long and an amazing read . I'd hazard a guess that if anyone complained about some item, on the list it goes! Wired comments that postcards portraying topless subjects are permitted, as is food in the shape of genitalia, yet any other adult content must only be transacted on eBay. How long will it be before the "Mothers against evil uses of fruit" put a stop to that?
Pretty soon, the only thing left will be Paypal subscription fees.
The observation has been made (by Paypal themselves to industry conferences) that Paypal is best understood as a lower segment credit card facility for merchants. They permit small merchants to take payments. Paypal's heritage as a Palm Pilot person-to-person money is long forgotten, and now it seems that they have moved even closer to conservative values when it comes to deciding what's right and what's wrong for you to buy from approved merchants.
Luckily, over in the DGC community, there appears to be an alternate. Instead of focusing on the common carrier principle, and banning certain uses of the product, the gold issuers have adopted a customer rejection approach. Partly because of their historical background as privacy supporters, and partly due to free market leanings, the principle is that any Issuer retains the right to discharge a person's account, for any reason whatever.
I.e., the Issuer of a gold currency does not offer the service to just anyone, and you don't have your normal consumer right of equal service. This seems to have resulted in some quite fierce closures of accounts, but it also seems to have preserved the currencies as, well, currency.
 "PayPal Tightens Transaction Reins," By Christopher Null
Posted by iang at May 23, 2004 06:57 AM
 "PayPal Acceptable Use Policy,"
Which is worse, restricting users or uses?
The functions of money include unit of measure, medium of exchange, and store of value. If an intermediary can take away any of these functions then it's not money.
"The functions of money include unit of measure, medium of exchange, and store of value. If an intermediary can take away any of these functions then it's not money."
Not if you accept former treasury secretary, William Simons "dogfood" definition of money.
"If the dog eats it, it's dogfood."
S a n d y
> I.e., the Issuer of a gold currency does not offer the service to just
> anyone, and you don't have your normal consumer right of equal service.
> This seems to have resulted in some quite fierce closures of accounts,
> but it also seems to have preserved the currencies as, well, currency.
I am not following you here. No sarcasm: I'm really lost. Can you explain again, more slowly?
Paypal are half way down the slippery slope, in that they set what products can be used, and their list is already very long. So, anyone who doesn't like something - and there's always someone, right? - can complain and get the list enlarged. Gradually the currency loses its currency.
An alternate is to say nothing about any type of usage, but to simply state that accounts can be closed, totally at the Issuer's discretion. Then, if there is a problem with, say, postcards of Nazis with Naked Fruit being exposed this week in the press, the account can be shut down. But if there is an user selling paintings of Naked Communists with Fruit, then that merchant can be left alone.
The trick is to recognise that there is no need to "act consistently" as there are no consumer rules or common carrier obligations. If as a money issuer you can pick and choose your customers (Paypal can't really, but a gold Issuer can) then you pick the nice people and kick out the bad people. Where you decide who is who.
Which saves having to keep up with the slippery slope. That's the theory, anyway.