How To Secure An Adult Merchant Account

Jul 26, 2022

According to research conducted by Statista, the global website traffic data indicates that the top 3 porn sites worldwide get as many as 5.81 billion website visits every month. 

What that translates is that, just on those 3 websites, there are as many as 134,491 “new” visits to these websites every minute. Gone are the days when consumers would go to their favorite adult movie store to get the latest feature. Adult entertainment is now more affordable and accessible than ever.

The Adult Industry At A Glance

If the above stats are not mind-blowing, here’s more:

According to a study by Semrush in 2021:

  • In the U.S. alone, it was discovered that porn sites received more website traffic than major platforms including TikTok, Instagram, Twitter, Netflix, Zoom, and Pinterest. 
  • Just in 2017, Pornhub, one of the leading online adult entertainment platforms, received as many as 28.5 billion visits. This number shot up to as much as 42 billion site visits in 2019.
  • In 2016, over 91 billion videos were viewed on Pornhub. In 2018, it surged to 109 billion videos. That comes out to roughly 14 videos watched by every person on the planet. 

Why Are Adult Businesses Considered High-Risk?

As evidenced by these astounding statistics, it is quite clear that the adult industry is beyond lucrative. If you want to launch a profitable, online adult business, there is clearly a target market ready to purchase.

However, if you launch your online adult store, be prepared to have some difficulty acquiring a traditional or standard merchant account. 

The primary reason is that adult businesses are categorized as high-risk by most traditional banks and providers.

Let’s dive deeper into the reasons why adult businesses are considered high-risk:

  • Chargebacks

Customers who have purchased adult services and products may feel guilty. They may not want to have their name on their credit record that they made this sort of purchase. As a result, they may claim that it was an “unauthorized charge” and initiate a chargeback.

Chargebacks can also occur with subscription services. The customer may have forgotten that they have signed up for a subscription service or simply forgotten about canceling it, leading to a chargeback in order to have some of their money returned. 

  • Fraud

Fraud tends to run rampant in the adult industry, especially if it’s an online, adult-themed store. As mentioned before, many customers that purchase adult products and services do not want any of their identifiable, personal information to appear on their bank or credit card statements. As a result, many will use stolen credit card information to make their purchases. 

  • Laws and Regulations

There are specific laws and regulations that only apply to the adult industry. One particular law, known as 2257, requires all merchants to have age verification tools on their websites. They must also have records of government-issued IDs for all “performers”.  Also, there are certain states that prohibit the sale of adult toys. This can drastically limit your customer base, and also be a red flag for standard or low-risk merchant account providers. 

  • Reputation

Banks have historically stayed away from businesses that sell questionable or taboo items or services. Therefore, adult businesses pose an automatic reputational risk for these institutions and will most likely deny them any form of processing services. 

Adult Businesses That Qualify For An Adult Merchant Account

Although this is not an exhaustive list, these are the types of businesses that will generally require the services of an adult merchant account. If you have any questions or your particular adult business is not listed, please check with your high-risk merchant account provider:

  • Gentlemen’s clubs
  • Pornographic photography
  • Pornographic magazines
  • Webcam communication platforms
  • Chat and phone operator platforms
  • Dating and escort services
  • Sex toys and other novelties
  • Lingerie stores

How To Apply For A High-Risk Merchant Account

Before you set out to find a high-risk merchant account provider to service your adult entertainment business, there are a few tips to keep in mind to ensure that you will be approved for an adult merchant account:

  • Get all your documents together

Depending on the provider, you will be asked to provide different types of documentation relating to your business, such as your bank statements and transaction processing documents. 

  • Improve your personal score

Most merchant account providers do want to see a solid personal credit score before they grant approval for a merchant account. A very wise move would be to pay down as much of your debt as possible. 

  • Be honest

There is really no room to tell a lie or not be completely transparent about your business. Be open and up-front about the products and services you offer. If you decide to withhold critical information from your provider, chances are high that you could face merchant account termination down the line. It is simply not worth the risk. 

Besides, being transparent about your business means that your provider could provide some effective solutions to curb any challenges your business might face. 

  • Fulfill your tax responsibilities 

Another quality that underwriters are looking for is whether or not you are paying your taxes. Stay up to date or you could be denied services. 

 Securing An Adult Merchant Account Is Easy

After you have determined what specific documentation is required by your chosen high-risk merchant account provider, it’s time to fill out the application. Nowadays, most merchant account applications can be completed online and are generally easy to fill out.

Once your online application is complete, ensure that all your required documentation is submitted along with your application. Although approval is never guaranteed, the underwriters will take the time to thoroughly examine your business and ensure that it is a legal operation. 

As soon as everything has been vetted, you could receive approval within a few days. With the approval comes the setup of your account and you are ready to accept card payments. 

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.

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