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I've seen adult sites using paypal... until they get caught.
We saw a competitive site using paypal to collect advertising payments, so we called paypal and asked what was up. They told us they would be happy to process our advertising payments for us, as long as it wasn't a porn site membership. We asked to speak to a supervisor who told us the same thing. We had our Director of Operations call the next week to verify everything was cool.
We got very happy and set everything up and notified our advertisers. A week into using Paypal they closed our account and notified us that we were not permitted to use Paypal according to their TOS.
Have fun dealing with that.
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