According to a report by Statista in 2020, there were around 30.4 million online dating customers. It is predicted that it will reach 35 million by the year 2024. In their 2021 report, Statista revealed that the total revenue in the US had reached $1.43 billion.
A total of about 1,500 online dating sites and applications exist globally. There are certain niches they focus on, such as religious daters, interracial daters, and more.
Why Are Online Dating Services Considered High-Risk?
The adult entertainment industry encompasses a vast number of categories. Depending on the individual merchant account provider or bank, they may consider your industry as high-risk. Online dating websites, unfortunately, happen to be one of the numerous categories in the adult entertainment industry.
There are many reasons why online dating services are considered high-risk:
- Safety issues:
These types of businesses are just known to have higher than average attacks from hackers and other cybercriminals. What is required is more layers of security than a lower-risk business. If your business demonstrates the likelihood of being a prime target for a sensitive information breach, traditional banks and merchant account providers will not approve you for an account.
- Elevated risk for fraud:
Fraud has always been a problem for online businesses in every industry. However, it is particularly higher in the adult entertainment industry.
- Higher chargeback rates:
Having a higher-than-average chargeback rate would drive traditional banks and merchant account providers to shut a merchant account down. A high chargeback rate is over 1% of sales. This is common throughout the adult entertainment industry and this is another reason why it’s considered high risk.
- Stringent compliance regulations:
When it comes to online dating websites, there are minimum legal age requirements. The site must have some form of age verification to screen minors. No user should be allowed to use this service if they are under 18.
Also, be careful about allowing your users to post “sexually explicit images” on their profiles, as this can pose legal concerns for obscenity. If you have any questions, it is best to seek the advice of an Internet attorney.
- Poor reputation:
Most processors are willing to work with businesses that are operating legally and profitably. Although online dating sites are technically a legal business, the reputation for reports of scam artists, emotional abuse, and even murder have been tied to this industry. Banks and processors do not want any part of this.
How To Find The Best Adult Merchant Account For Your Online Dating Site
Now that you know that launching your online dating service will require much care and research, how do you go about locating the best adult merchant account?
The key is to do your due diligence and research as much as possible. Do not fall for slick marketing tactics. Examine their reputation carefully and determine whether they have what it takes to take on the tricky waters of the online dating business.
Look them up in the Better Business Bureau to see how other merchants have fared with them. Get a hard copy of their contract to read it carefully, ensuring that there are no sneaky tactics or hidden fees embedded within the fine print. If you are completely green to the industry and need legal assistance, it would be best to hire an attorney to thoroughly comb through the contract with you.
Open Your Adult Dating Merchant Account Today
In spite of all the challenges tied to the online dating industry, many users have reported very positive experiences. The online dating industry has revolutionized the way people meet their significant others and is on course for more growth. Now is the time to take action and become a part of this very lucrative industry.