In 2020, there were 44.2 million users of online dating services in the United States alone. It is also set to increase to 53.3 million by the year 2025. This is all according to the research conducted by Statista.
Online dating has become one of the most popular ways to meet a significant other. And the industry is exploding. In fact, in 2019, the revenue was close to $3 billion. There are currently as many as 2500 online dating websites just in the US, with many popping up and launching their operations on a daily basis as well.
Why Is Online Dating Considered High-Risk?
Online dating falls into a category under the adult entertainment industry. As such, it will be contending with the same issues associated with this type of industry. The most common include legal issues, age restrictions, and higher incidences of fraud and chargebacks. Specifically to online dating, you also have customers who are dissatisfied with the service if they are unable to meet someone online, in spite of paying for the service.
What is more typical with online dating services is that, when customers fail to meet their partner, many will contact their credit card companies and dispute the charges made. Their reasoning will most likely be that they were deceived and should get their money back. As most credit card companies protect the interests of their customers, they will initiate a chargeback, returning the funds back to the customer.
An excessive amount of chargebacks will inevitably raise a red flag with processors, driving them to shut down the merchant account. This is why many banks and other traditional merchant account providers will not offer merchant accounts to online dating merchants. There is too much financial risk involved. That is why online dating businesses are considered high-risk.
What To Look For In An Online Dating Merchant Account
Online dating websites require that your merchant account provider equips you with all the necessary features to operate safely and efficiently. Here are more features you should look for before you choose the best online dating merchant account provider:
- Recurring billing
Subscription billing plans are how most online dating websites make their income. A solid online dating merchant account provider will have this capability.
- Multiple payment options
Not only should you be able to accept both debit and credit cards, but e-checks can also be included. For international customers, there should be international payment methods as well.
Customers need to know that their sensitive card information and personal data are secure on your website. Therefore, the provider must have a secure payment gateway in order to protect your business and your customers. The provider must be able to provide a high level of encryption to make sure all data transmission is safe.
- Low rates
High-risk merchants are expected to pay higher-than-average processing fees. However, it should not be outrageous. Your provider must provide fair and transparent pricing. Always read the fine print on your contract before you sign, in order to ensure there are no additional hidden fees.
Open Your Online Dating Merchant Account Today
There are plenty of online dating merchant account providers that have the experience and competence to help you navigate the challenges of this industry. It’s a matter of doing research and choosing the best for your business.
The process for applying for a merchant account is very easy and straightforward. Ask your provider what documentation is needed and submit it along with a completely online application found on their website. Once approved, you will undergo the onboarding process, where your account and payment gateway are set up and you will also be acquainted with their anti-fraud and chargeback solutions. When all this is complete, you can now take payments from your customers.