Adult Payment Processors

According to reports, the U.S. alone has a booming hunger rate for adult entertainment content. This has significantly contributed to the industry’s profitability in terms of finance. Some researchers projected 97 billion USD as the worth of the adult entertainment industry globally. This significant growth has given merchants in the adult entertainment industry sleepless nights.

The quest to meet the fast-growing customer demands for the products and services puts additional pressure on adult payment merchants. Besides, merchants also need to strike a balance between meeting these demands and ensuring a smooth and pleasant experience for customers and clients.

Unfortunately, even with strict adherence to the policies, rules, and regulations, simplifying the sales transaction process seems like a big hurdle every merchant needs to cross. And this was necessitated by the difficulty of finding adequate credit card processing solutions. Many payment processors have continued to sideline the industry in large numbers. This could be attributed to the increasing negativity and controversial content that the industry produces and the complexity of navigating the regulations involved.

Why Is the Adult Entertainment Industry Considered High-Risk Business?

As mentioned earlier, different niche markets dominate the adult entertainment world. And besides, it features a vast array of products, accessories, and services, covering various categories. These kinds of products and services make the entire adult industry a high risk because not all payment processors want to be associated with these categories of products and services.

Additionally, engaging in the sales of items with age restrictions (18+) alongside other legal frameworks turn most merchants into high-risk categories. Take a look at the gentlemen’s club, for instance. To a layman, the legality of such category of products or services is questioned, thus considered high risk.

Most banks do not entertain the registration of merchant accounts. And more importantly, billions of transactions are carried out online every day due to the advancement of the digital world. Like any case of card payments, not present transactions, most banks find implementing an additional layer of security checks on their platforms challenging. Let’s examine some other reasons adult entertainment industry is considered high-risk.

Fraud

Fraud is much more rampant in our digital world with online businesses than brick-and-mortar stores. Why? It is because making online payments while hiding behind the screen is more possible nowadays than ever. In addition, with adult products and services, users may manipulate the system by choosing not to use their personal information to make payments as it would reflect on their bank statements.

In the adult entertainment industry, the use of stolen credit card information seems to be the most prevalent form of fraud. Another common scam includes using the same card information to make multiple purchases within a short period. While some frauds are glaring and obvious, others are not. Hence, setting a system in place to checkmate e-commerce transactions and prevent credit card fraud is essential.

Chargebacks

Essentially, a chargeback is described as the return of money due to a dispute opened by a particular consumer on their credit card statement. Most of the chargebacks occurring in the adult entertainment industry are usually out of embarrassment. For instance, a customer does not want to have a record of their purchase of adult services from your website. So, they simply claim it was an unauthorized charge from their bank account and file for a refund. For many, they deploy this strategy to eat their cake and have it at the same time. The consumer typically uses the product while filing for a refund at the same time.

Another example of chargebacks is when the setup of an adult merchant services account is faulty. Many adult entertainment industry businesses are wrongly displayed on a bank statement as a different name. Although, this is excellent for adult-related companies, it doesn’t guarantee that there won’t be issues, such as getting a customer confused when making payments. Thankfully, it is possible to prevent chargebacks against your account from your website.

Many subscription-based businesses also experience similar scenarios. A customer may forget to cancel recurring payments. Then, once he/she discovers that he/she is being charged for products not organically purchased, or he/she attempts to file a chargeback to recoup all the money. That’s why adult entertainment businesses must continue to send constant reminders to consumers in a bid to reduce the issues of chargebacks.

Reputation

Generally, most banks are highly dependent on outdated ideas of businesses. Hence, they impose strict terms of service to guide the standards of their services. For Instance, the adult entertainment industry isn’t a business you can comfortably talk about at a dinner table with your family. So, it is considered high risk and poses a reputational risk to the bank. For adult businesses, there’s no guarantee that these terms shall fit into the working systems or banks at any time.

The only way out for companies and businesses in the adult entertainment sector is to find a banking institution and credit card processing company that’s willing to provide the needed support.

Applicable Laws

Since it’s an adult industry, there are a number of laws guiding the industry. A typical example is the 18 U.S.C. 2257 law, which is commonly referred to as 2257. It states that companies must have an age verification on their websites or online stores coupled with accurate records of government-issued photo identification of all performers. Other laws may focus on the total prohibition of the purchase of adult products or services in specific states. You can now remember that some websites require you to fill in whether you’re above the age of 18 or below.

With these laws, the customer base is significantly limited, consequently limiting your ability to sell adult products or services to a broad audience.

Does Being High Risk Affect Your Chances of Getting an Adult Merchant Account?

If you apply to any of the traditional card issuing or payment processing platforms at the moment, there’s a high probability that your request won’t be approved. This is because most of these payment services platforms and providers do not want to associate with high-risk categories of products or services like adult entertainment products.

Examples of payment providers that do not allow processing payments for adult products or services include Stripe, PayPal, and Square, simply because they are categorized as high-risk businesses. The same holds true for the adult merchant account industry. You’ll hardly find any regular merchant account that will approve your request.

Why is this so?

Most of the examples of companies we listed earlier did not include high-risk businesses in their underwriting at the time of application. There’s a higher chance that your merchant account will be approved at the beginning, but once they sight adult entertainment in your application, it’ll be immediately turned down. These companies will quickly notify you that they do not approve adult merchant accounts.

In some cases, their strict regulations and policies give them the power to shut down your account immediately or send you packing from their server. In extreme cases, your account might be permanently frozen. This is where a reputable, trusted, dependable, high-risk merchant account provider like PurePayPayments comes in.

With PurePayPayments, you can rest assured knowingly fully well that your risks are largely covered, and the processing of your request is guaranteed within the shortest possible time. PurePayPayments is the best high-risk merchant payment processor that handles any payment processing you might have in the adult entertainment industry. If there are any questions or concerns, we’d be here to respond as fast as possible.

What Is an Adult Merchant Account?

Essentially, adult merchant accounts work like the traditional merchant accounts that you know. The only difference is that it serves a specific industry or sector, and one of the sectors it serves is the high-risk industries.

Like regular bank accounts, merchants’ accounts allow users to collect and save cashless payments. A merchant account exists under the law of contract between the two entities: the merchant acquiring bank and the merchant accepting payments. Through this agreement, the merchant can process all card payments from their website, whether a debit or credit-based transaction.

Usually, merchant account operates in a sort of cycle. It begins when a customer surveys, discovers, and purchases an item of interest from a merchant’s website using a credit card. The card processor then transmits this translation via a credit card network such as Visa or Mastercard within a few minutes after initiating the transaction.

Subsequently, the customer’s transaction data is transferred to its merchant account’s network, and the credit card network immediately processes that information to the issuing bank. Once the issuing bank approves the transaction, the funds leave the card processor and go into the merchant account. The funds are consequently moved from the merchant’s credit card processor to the merchant’s bank account. This allows the merchant to ultimately utilize the funds.

How Do You Get an Adult Merchant Account?

Do you operate a business in the adult entertainment industry? Do you encounter problems with payment for your products or services from your consumers? Finding a solid, trusted, and dependable adult merchant account provider might be the only solution to your business problem right now. Remember, the merchant account provider you choose must understand the concept of the high-risk industry thoroughly and the pitfalls they might encounter in the industry.

Apart from a reputable adult merchant account provider, you’d need some additional documents to apply for an adult merchant account for your business.

Let’s take a brief look at these documents:

Financial statements: With a solid and accurate financial statement, the adult merchant account provider can thoroughly assess how you’ve been managing your business finances. Apart from that, the provider can also be able to evaluate your average amount of expenses.

Bank account and routing number: Bank account and routing number are used to distinguish personal and business finances. With your bank account and routing number, the merchant account provider will also be able to gain insight into your efforts to reduce potential liability, especially regarding your personal assets.

Business license: Licenses are essential for your business. Your merchant account provider will educate you on the specific business licenses required in your business line.

PCI Compliance: PCI Compliance is compulsory for all adult entertainment businesses. It guarantees the protection of customers’ information. Merchant and payment processors must comply with regulations contained in the PCI. It’s a prerequisite to processing a customer’s information with the maximum level of security.

Additional Supporting Documents: Apart from the 5 types of documents listed above, applying for an adult merchant account might require other additional documents to complete your application. This may also vary from one provider to another. You can request to provide a business plan, marketing or promotional materials, shipping and return policies for your products and services, and even inventory reports.

In order to ensure that your application for a merchant account runs smoothly, you need to ensure that the law of your land legally recognizes the kind of business you operate. Remember, no payment processor would want to be involved in shady deals or unlawful companies. Underwriters typically conduct background checks on the legitimacy of every business they evaluate, and this is usually done during your application process.

With a clean credit history, sufficient funds in your bank account, and all cleared debt, you’d be assured of getting your merchant account application approved.

How To Increase Your Chances of Approval for An Adult Merchant Account

There’s no denying the fact that running an adult entertainment business is considered high-risk. So, the application process for your adult merchant account can be rigorous and might even be declined. However, when preparing your application for an adult merchant account, there are certain things you can put in place to increase your chances of approval. These could include:

Being Honest about Your Business

Honesty is crucial, especially when it comes to getting your adult merchant account application approved. And in most cases, your account can even be frozen or deleted permanently. Due to misleading information or misrepresentation, processing companies turn down millions of merchant account applications daily. From what your company does to your specific products, accessories, and services, you have to be open, honest, and transparent in your application.

In addition, you shouldn’t get your hands in dirty, shady, or illegal deals. Many payment processing companies are always committed to profiling only legitimate businesses for approval. The consequences of supplying misleading information in your application might range from being blacklisted or placed on a watchlist, thereby creating bigger problems for high-risk merchant accounts in the future.

Boost Your Personal Credit Score

Another way to boost your chances of getting your merchant account application approved is to improve your personal credit score. This might be difficult for new business owners to achieve because they’re new to the industry and have no established payment processing history. However, every applicant must know that the lower your personal credit score, the lower your chances of getting approval for your adult merchant account. However, you can boost your personal credit score by paying off your bills and credit card debts.

Have Your Documentation Ready

When applying for an adult merchant account, ensure that all your relevant documents are ready and available. From your banking license to your business plan, bank statements, and other documents, you must ensure that everything is available. However, it may interest you to note that the requirement varies slightly depending on the payment processing company. Generally, it’s good to ensure everything is ready. This will help you in case you’re partnering with different payment processing companies at the same time.

Choosing the Best Adult Payment Processing Company: PurePayPayments to the Rescue!

You can save a great deal of time and effort if you actually find an adult payment processor that clearly states that adult entertainment merchants are accepted.

Chargebacks are too common in the industry, negatively affecting your profit margin. That’s why you must evaluate and choose the best adult payment merchant offering complete chargeback protection. There’s also a great benefit in implementing a system that screens out customers based on their age. This seems like an excellent way to curb unauthorized transactions while building a solid reputation, reducing risks, and retaining profits.

Demand assistance is also a feature to distinguish one payment processor from another. When a payment service provider offers on-demand, 24/7 assistance, it demonstrates an unparalleled commitment to ensuring that customers are 100 percent protected against potential threats. And lastly, another checklist for choosing a payment processor is the ability and willingness to maintain an open and transparent relationship with merchants.

The adult entertainment industry requires a payment processor with several years of experience working with high-risk industries and understanding the industry’s nitty gritty. PurePayment is a B2B merchant payment processing platform for adult entertainment companies that offer free equipment and short terms contracts. In addition, we specialize in high-risk businesses while also maintaining optimum transparency and accountability in our dealings.

Why Choose PurePayPayments?

Was your application for merchant services refused? Are you in search of a payment provider that specifically serves the adult entertainment industry? Do you want a payment processing provider that specializes in high-risk merchant services? Look no further. We’ve got you covered at PurePayPayments.

PurePayPayments is a full-service merchant account company providing clients and customers with the best adult payment services. From local payment to credit card processing, we understand your business problems, and we’ll offer a full-scale and detailed solution to your problems, sticking with you every step of the way.

Our services at PurePayPayments include short-term commitments, customer age verification, free equipment, fraud, and chargeback protection tools. We also help you eliminate potential threats, manage risk, and monitor suspicious transactions.

Remember, adult merchant processing isn’t entirely free of its own intricacies. You must do everything possible to wade through these intricacies. The key lies in finding a payment service provider that utilizes technology to protect your adult entertainment business. So, you can increase profits and grow exponentially for years to come