Why Are Adult Dating Merchant Accounts Considered High Risk?

Jan 04, 2014

Online adult dating websites are growing exponentially in popularity and profitability. Statistics show that this online industry is changing perceptions and dynamics within social norms regarding dating and relationships amongst adults. If your business is in this lucrative sector, the first and most pressing need for the smooth operation of your business is the need for an adult merchant account. However, finding a merchant account for your business can be an arduous and difficult task as you will require a high-risk merchant account. If you are asking yourself why you need a high-risk adult merchant account here are three reasons your business is considered high-risk:

1)      Chargebacks – The financial truth of adult online dating websites is that there is a much higher probability of chargebacks being filed by customers and succeeding, hurting the business and merchant account provider. The nature of the adult online dating industry leads to high quantities of chargebacks. This is the most critical factor for conventional banks when they consider an application for such a high-risk business. Chargebacks hurt the bank and are a risk they can avoid in normal merchant accounts, mandating adult online dating businesses need a high-risk adult merchant account alternative to normal merchant accounts.

2)      Business Plan Challenges – Adult dating sites are springing up around the internet at an ever-growing rate. With a plethora of options and businesses available, the struggle to elevate your business to a stable and sustainable level of operation can be a challenging proposition for any entrepreneur. Establishing a niche and client base quickly through effective marketing and website mechanics will determine the survivability of your business. These factors are hard to forecast for credit payment providers, lending to the high-risk nature of adult dating websites.

3)      ‘Adult’ Perception – The third reason you will need an adult merchant account is based solely on perception. Conventional banks will parallel the perception of ‘adult dating websites in the way that they categorize marijuana dispensaries. Regardless of your website’s niche, adult dating websites carry an association with escort services which can become dangerous legal risks as no business wants to be associated with any illegal investigation. This perception, fair or not, causes banks to categorically label any ‘adult’ dating website as a risky proposition.

If you need an adult merchant account for your online dating website, you will find yourself in the position of acquiring a high-risk merchant account. Between chargebacks, business challenges, and perceptions about the industry banks will consider your business too risky to open a merchant account leaving you to research alternative solutions online or offshore. As always, be thorough and meticulous in your assessment of online merchant accounts as there is little to no standardization or regulation protecting your business. With due process and research, you can find an adult merchant account to foster the growth and development of your adult dating website.

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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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