Online dating websites and apps have gained significant popularity in recent years. As more people worldwide have found their significant others online, it is a testament to what the latest technology can do. Online dating sites can introduce two people who would’ve never met otherwise.
Statista’s latest Digital Market Outlook report found that online dating services are expected to have as many as 413 million active users around the world by the end of 2022. It is also expected to earn as much as $3.7 billion in revenue worldwide via pad subscriptions.
As a clearly lucrative market, launching your own online dating website means that you are positioning yourself within an industry that has much room to grow.
The Reason Online Dating Merchants Considered High Risk
Launching any online business has its fair share of challenges. Online dating websites are no different. In fact, this particular industry is so prone to risk that it has been categorized as high-risk by traditional banks and merchant account providers.
Let’s take a look at the main reasons why online dating merchants have been labeled as high risk:
- Higher incidences of chargebacks
When it comes to using an online dating website, a disclaimer is in order. What should be prominently featured on every online dating website is that, just because a user signs up and pays a monthly subscription to use the site, there is no guarantee that the user will find their partner.
While these disclaimers may be featured on the site, it does not change the fact that many users, who are unsuccessful in finding someone, do commit friendly fraud. That is, since they were dissatisfied with the service they received, they inevitably filed a chargeback.
- Recurring transactions
Recurring billing is when an agreed-upon amount is charged on an agreed-upon date each and every subsequent month until the customer decides to cancel. Since most online dating websites use this business model, it is something to be expected.
However, the issue that traditional processors see is that customers either forget that they signed up, or they forget to cancel once they found someone, which once again leads to chargebacks.
- Money laundering
Another major concern for traditional providers is that some online dating websites have been used for illegal purposes such as escort services and even human trafficking activity.
What To Look For In An Online Dating Merchant Account
The success of your business will largely depend on who you choose for your payment processing needs. Choosing the wrong merchant account provider, ill-equipped to handle the challenges of a high-risk merchant, will mean that your funds can be frozen or the account can be outright shut down due to excessive fraud and chargebacks.
A shutdown of your payment processing capabilities means that your only source of the cash flow will stop, leading to a tremendous loss in profit.
In order to find the best online dating merchant account provider for your business, you will need to take stock of what exactly your business needs.
In addition, there are some basic features that a good, reliable merchant account provider must have in order to be considered for a potential partnership. Here they are:
- Secure payment gateways
- Automated recurring billing
- Low-commitment contracts
- Transparent and honest pricing
- Top-tier customer support
It’s always a good idea to take the time to shop around and research all of the products that providers have available. Do take time to compare their pricing and their terms.
Open An Online Dating Account For Your Online Website Today
Operating an online dating website will have its challenges, especially within the high-risk industry landscape. Knowing this, having the best online merchant account provider will be the key to helping sustain you through the rough waters of fraud and chargebacks.