Adult Merchant Processing: Why You Need It

Apr 29, 2022

The Internet has made access to adult entertainment easier than ever. According to the findings made by Transparency Market Research, the global market value is expected to reach $300 billion by the year 2030.

With new technologies being introduced into the adult market, such as virtual reality, there is a great potential for these types of innovations to become the next major moneymakers in the industry.

The Adult Entertainment Industry Does Have Its Challenges

If you are just starting out in the adult entertainment business and want to take advantage of this highly lucrative industry, do know that you will face some challenges. 

First of all, if you run an adult entertainment website and sell all of your wares online, you will need a processor to take and process all of your credit and debit transactions. This is the only way that not only your customers will be able to buy from you, but it’s the only way your business will be able to generate any revenue.

As a result, you will need to seek the services of a payment processor. More specifically a merchant account provider. The problem is that traditional merchant account providers will not be willing to offer their services since the adult entertainment industry is considered a high-risk venture.

Why Is The Adult Entertainment Industry Considered High Risk?

Simply because the adult entertainment industry is wrought with higher-than-normal incidences of chargebacks, and fraud, and then there is the issue of reputation. Banks and processors simply do not want to associate themselves with businesses that sell what is considered taboo in our society. In this case, adult entertainment and all the categories associated with it. 

Some of the categories that fall under adult entertainment include escort services, streaming videos, online dating websites, sex toys, and so much more. Therefore, your best bet is to seek a provider that is well-versed not only in the high-risk industries but if possible, in the adult-entertainment industry. You will need a high-risk, adult merchant account.

You Need An Adult Merchant Account

So what is an adult merchant account? It is essentially the same as a traditional merchant account, only it serves a specific sector or industry, in this case, the high-risk industries. 

You could say that a merchant account is similar to a bank account in that it collects and saves cashless payments. These merchant accounts come to be via a contract between the merchant accepting payments and the merchant acquiring bank. It’s through this merchant account that the merchant is able to collect and process all credit and debit card payments from their business website. 

The way it works is that it follows a sort of cycle, where a customer finds and purchases something off of a merchant’s website by using their credit card. It is only within a few minutes that the card processor transmits this translation via a credit card network such as MasterCard or Visa. 

After the credit card processor transmits the customer’s transaction data to its network, the credit card network sends that information to the issuing bank. Once the issuing bank approves the transaction, the funds are then deposited into the merchant account. The merchant’s credit card processor then moves all funds from the merchant account to the merchant’s bank account, where the merchant can ultimately utilize these funds. 

What You Need To Apply For An Adult Merchant Account

The best strategy you can implement for your business is to find a solid and dependable adult merchant account provider that will understand the high-risk industry thoroughly. They should also be well acquainted with all the pitfalls inherent to the adult industry. 

Once you have found a reputable provider, here are a few things you will need before you apply for a merchant account:

  • Financial statements: These documents will give the provider a closer look at how you manage the finances for your business. Processing statements can also prove useful in order to give processors a closer look at your average amount of expenses.
  • Bank account and routing number: This will show whether or not you have separated your business from your personal finances. It will also give providers a clue as to what you will do to lessen a potential liability in terms of your personal assets. 
  • Business license: It is important to check with your account provider as to which licenses are required to run your business. 
  • PCI Compliance: PCI Compliance is an absolute must as it promises protection for customers’ sensitive payment information. In order to process a customer’s credit card information and apply the necessary measures of security, both merchants and payment processors must adhere to PCI Compliance. 
  • Business ID: Also known as the Employer Identification Number or (EID), this number is needed when you file your business taxes and is also known as a “unique identifier” that will be found on your legal and tax forms. 
  • Extra Supporting Documents: Consult with your provider for any additional documentation required to complete your merchant account application. Depending on the provider, some may request to see your business plan, marketing materials, the shipping and return policies for your business, and even inventory reports. 

To make sure that everything goes smoothly, make certain that you are not running an illegal operation. No processor wants to be involved with an “unlawful business”. Underwriters are known to check the legitimacy of every business they evaluate during the application process. 

By having enough funds in your bank account, all your debts paid, and having a clean credit history, you can be sure your application for a merchant account will be approved. 

Closing Thoughts

Adult merchant processing does have its own intricacies that you must wade through. The key is to find a provider that has the technology and protection to help your adult business earn more and grow for years to come.

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 on 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.