Since the start of the pandemic, most people worldwide were forced to stay home to halt the spread of the virus. Most service-oriented, customer-facing industries suffered tremendously due to their brick-and-mortar businesses being shut down.
One of the few industries that fared better was online media and entertainment services. One particular sector, online porn, experienced a dramatic surge in the number of customers and subscribers using these services during the stringent social-distancing period. Easier access to mobile phones has also helped the surge of users.
The Trouble With Adult Merchant Accounts
Online merchants looking to launch an online adult business would do well in this lucrative industry. But before you contact your local bank in order to open an adult merchant account, take time to look at the current landscape of the adult industry.
Sure there is a lot of profit to be made, and ideally, any merchant account provider would like to partner up with a merchant in a highly-profitable industry. However, the reality is that you will have great difficulty securing an online merchant account provider if you are in the adult industry.
Depending on the provider, you will hear various reasons why they will not provide payment solutions for adult merchants. Here are the most common:
- Card-not-present transactions
- Possible fronts for illegal activity (Prostitution, Human Trafficking, Money Laundering)
- Higher incidences of chargebacks
- Higher incidences of fraud
- Age restrictions
- Taboo subjects
All of the above scenarios expose the provider and bank to potential risk and therefore, they simply choose not to partner up with adult businesses. In addition, all of these characteristics place the adult business in the high-risk category.
What Is The Answer?
So where can these legitimate adult merchant business owners turn to in order to process their card payments? They would need to seek the services of a high-risk merchant account provider.
High-risk merchant account providers have substantial experience working in numerous verticals within the high-risk industry. This means they are well-equipped to tackle the higher incidences of chargeback and fraud. Many also have reputable partnerships with offshore banks in order to offer an offshore merchant account.
Here are more features and benefits to partnering up with a high-risk merchant account provider. Again, every provider is different but do inquire if they offer these services:
- Secure online payment gateways
- Chargeback management systems
- Custom pricing
- Virtual terminals
- Transparent pricing models
- 24/7 customer support
- Fraud protection
How To Secure A Processor For Your Adult Business
There are some preliminary steps that you should take before you seek a reliable and trustworthy payment processor. Here is just some documentation that you will need when applying for an account:
- A valid ID (passport/driver’s license
- Recent bank statements (last 3 months)
- Social Security Number
- Recently processed statements (last 3 months)
- Business license
- Business plan
- Have a secure website (PCI DSS compliant)
- Clear return and shipping information on the website
- Contact information is clearly shown on the website
When you are ready to apply for an adult merchant account, you can begin by filling out an online application and submitting the aforementioned documents. An underwriter will carefully scrutinize all information provided so please be completely honest and transparent about what your business does. They want to ensure that you are running a legal operation.
The decision for approval could take one to several days. Upon approval, a member of the provider’s team should assist you with the onboarding process, including getting your online payment gateway set up.
Your Industry Demands A High-Risk Merchant Account Provider
Launching an online adult-themed business is one of the most lucrative ventures out there. However, the adult industry has clearly defined requirements that must be met in order to satisfy its stringent legal demands.
That’s why partnering up with a trustworthy and reputable high-risk merchant account provider simply makes more sense.