6 Secrets to Obtaining an Adult Merchant Account

Feb 27, 2018

While the adult entertainment industry may be controversial, but it is not illegal to operate businesses that sell adult products or services.

Unfortunately, many banks treat adult businesses like are breaking the law. Due to excessive chargebacks, a large volume of card-not-present transactions, the potential that these businesses are fronts for illegal activities, traditional financial institutions classify these businesses as high risk and refuse to approve them for merchant accounts, which allow them to process credit cards. With the adult entertainment industry’s explosion into the digital marketplace, not accepting and process credit card transactions isn’t an option.

Though it can be challenging, it is not impossible. Some merchant account providers even specialize in high-risk merchant accounts. Follow these six tips and increase your chances of getting an adult merchant account.

1.    Take Care of Your Credit
Satisfy any outstanding balances or liens and then, make sure one of the major credit reporting agencies know you’ve cleaned up your credit. In a few months, the reports will be updated and your credit rating will improve.

2.    Start Saving
Don’t be surprised if a merchant account provider has you set up a reserve account that it can also access in case of future losses or other unexpected financial issues. This will give you security. The more you can stash away, the more serious you will look to a provider.

3.    Prepare to Pay More
All high-risk businesses, and there are many that fall under that umbrella, need to be ready to pay higher fees. Keep in mind that this is a cost of doing business. What you are gaining is worth it. This is a cashless society. Having the option of taking credit and debit card payments is priceless.

4.    Get Your Paperwork in Order
When you apply for an adult merchant account, you will need to provide a valid, government-issued ID, like a driver’s license, a bank letter or pre-printed voided check, three months of your most recent bank statements, a SSN (Social Security Number) or EIN (Employer Identification Number). Also, if applicable, you will need three months of your most recent processing statements. Gathering these items and having them ready to hand over to a provider will streamline the process.

5.    Be Honest and Ready to Explain
If you filed for bankruptcy or ended up having a previous merchant account shut down, make sure you are able to provide a reason for it. Though neither of these automatically disqualifies from getting an adult merchant account, it does increase your risk.

Also, be truthful about your projected processing volumes and average ticket amounts. You don’t want to exaggerate or be too conservative. Anything that does not match what you estimated will be a red flag for a merchant account provider. Then, you run the risk of having your merchant account terminated or funds frozen without any notice.

6.    Show Them You’re Legit
Shareholders and customers may shy away from adult businesses due to their reputations, but they should be focused more on the potential profits. Adult entertainment businesses often are lucrative ones, when these businesses do well, your merchant account provider does well. Show merchant account providers that you are a responsible, legitimate business that just also happens to be in the adult entertainment business.

Types of Adult Businesses Accepted

Though the adult entertainment industry is ever-changing, the following types of businesses are often accepted by high-risk merchant account providers:

  • Adult toys and novelties
  • Adult bookstores
  • Adult massage businesses
  • Escort services
  • Online dating websites
  • Adult content membership websites
  • Online lingerie and adult clothing shops
  • Strip clubs

If you don’t see the type of business you operate here, discuss it with a merchant account provider at the start of your application process. As long as you can provide a thorough explanation of your business model, an account provider often can explain it to an underwriter in a way that makes sense and can result you in obtaining an adult merchant account.

The Last Word

The quicker you get approved for an adult merchant account, the quicker you can begin increasing your profits and establishing your business as a good one.

When you are ready to obtain an adult merchant account or open a new one, it is important to know all the challenges and risks you may face. eMerchantBroker.com (EMB) specializes in assisting high-risk merchants, like those in the adult entertainment industry. EMB offers an online application is simple and easy.

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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