With the highest percentage of its population using online dating services, the United States leads the world at 15.7 percent (or close to 53 million people), according to Statista.com.
By the end of 2022, there will be approximately 413 million users of online dating services worldwide. It is also expected to create $3.7 billion in revenue worldwide via paid subscriptions.
Online dating services are clearly a very lucrative venture. With more apps being created than ever, meeting someone online has seemed to have lost its stigma in the last twenty years.
In order to open up your own online dating services business, you will need a way to process your credit and debit card transactions online seamlessly and securely. You will need a merchant account to make this happen.
Why Are Online Dating Merchants Considered High-Risk?
Online dating merchants are unable to secure a merchant account via a traditional merchant account provider. The reason is that online dating services are considered high-risk.
The reasons that online dating services are considered high-risk are the following:
- Money laundering schemes: Underwriters have come across money-laundering schemes as they do their investigations during the merchant’s application process. Unfortunately, escort services, prostitution rings, and human traffickers have used online dating websites as a “front” for their illicit activities. These criminals have tainted the industry, which is why it’s considered high-risk. Banks and payment processors do not want any ties with any illegal enterprise.
- Recurring billing: Customers who sign up for recurring billing are more likely to request chargebacks. Sometimes the customer doesn’t know how to cancel their subscription. Other times, they simply forgot they signed up for the subscription in the first place. Either way, they end up requesting a chargeback.
- Infidelity: Online dating sites are apparently used by married couples looking for a secret encounter. Usually, one of the spouses inevitably finds the charges on their statements on their credit card bills or their bank account. The spouse who initiated these encounters will claim that it was a fraudulent charge and request a chargeback.
Other reasons that online dating services are plagued by chargebacks are that, according to customers, the service “failed to deliver” on helping them find their match.
It could also be that they had a negative encounter with another user. On a more positive note, a chargeback may be requested when a customer does end up meeting their match and is no longer looking. They no longer have a need for online dating services. Therefore, they simply want to cancel their payments and request a chargeback.
How To Get Approved For An Online Dating Merchant Account
Before you seek a reputable merchant account provider, ensure that your online dating service business is free of any fraudulent activities. No provider will work with a merchant that is engaging in any unlawful schemes.
You may even consider not offering recurring payments to avoid chargebacks. It would also be helpful to offer clear instructions on how to cancel their account, and if they have any questions, provide them with various ways to communicate with your business. This can include chat boxes, email, phone numbers, etc.
How To Apply For An Online Dating Merchant Account
Every high-risk merchant account provider has its own requirements as far as documentation needed to process a merchant account application. Here is a list of possible documents that could be requested at the time of the application process:
- Voided check/proof of settlement bank account(s)
- Certificate or articles of incorporation
- History of processing for the last six months
- Shareholder certificate
- Both personal and business financial history
- Copy of the driver’s license or passport
- Organizational structure chart
- PCI Compliant Website
Again, depending on the provider, once you submit your completed online application, along with your required documentation, an underwriter will analyze your application and verify that all documentation and your business are legitimate. The entire process should take but a few days.
If you are approved for a merchant account, the provider will assign you to a designated account manager that will help you set up your merchant account, and your payment gateway (if applicable), and familiarize you with all of your anti-fraud and chargeback mitigation tools. After all this, you will be set to take credit, debit, and even e-check payments right away.
Get Your Online Dating Merchant Account Today
Despite the challenges and risks inherent in the online dating services industry, you can still rise above these issues by partnering up with a solid and reputable high-risk merchant account provider. Preferably, they should have quite an extensive expertise in the online dating service vertical to be well-familiar with the risks involved.
Knowing the risks involved with the online dating service industry, your provider should come equipped to offer you the latest in anti-fraud and chargeback mitigation tools to ensure that your business and your customers are protected. This will ensure that your business will continue to grow. You will not need to worry about excessive chargeback fees eating away at your hard-earned bottom line.