The internet has breathed new life into many types of businesses, but none more so than the adult products and entertainment sector. Whether you are an established entrepreneur in this area or are just starting out, one fact remains the same: You need to make obtaining a secure payment processing provider one of your top priorities.
When you lock down this portion of your business, many of the other components will fall into place.
When you run a dating, content, or products site for grown-up consumers, you are doing business in an extremely lucrative ecosystem. In fact, it is estimated that the industry rakes in a whopping $260 million per day, most of which is in the form of credit card payments.
Given this fact, it might come as a surprise when newcomers find out that their website or physical store is automatically deemed a high-risk business by the companies that provide payment processing services. Why is this the case?
It boils down to the fact that these companies want to make a profit as much as you do. Many don’t wish to enter into a partnership with a retailer in an industry with age regulations, reputational concerns, a higher than average likelihood of fraud, and increased instances of credit card chargebacks.
It is only a specific segment of the merchant account provider pool that dedicates itself to serving the high-risk business community. Some of these vendors have particular experience in the adult industry and have relationships with other financial institutions who are willing to work with you as well.
There are some things to bear in mind when entering into a contract with a high-risk payment processor. For one thing, the application process may take longer and could require additional documentation and scrutiny. After being approved, you will most likely pay higher per-transaction and monthly fees.
Additionally, you could be asked to open a rolling reserve account to further protect the merchant account provider.
Although successfully working out a deal with a high-risk merchant account vendor may present a few additional obstacles, there are some actions you can take to maximize your chances of being accepted for an account.
Additionally, it is crucial that you work hard to avoid chargebacks, which occur when the customer goes directly to their credit card company to dispute a charge. In the adult industry, chargebacks frequently stem from fraud, but they can also be the result of regret. Either way, they cost you, the merchant, in time, money, and — in the worst cases — your very merchant account. Strategies to minimize chargebacks include the following.
Regardless of how scrupulous and transparent you are, chargebacks will always be a thorn in your side. However, instituting these proactive measures will go a long way toward reducing their frequency and long-term negative consequences.
When a customer purchases video content, paraphernalia, or other services from your adult-themed business, their expectations amount to more than those of a customer in a more “mainstream” retail operation.
That’s because in addition to efficiency, excellent customer service, and high-quality products, your clients need discretion due to the nature of who you are and what you sell.
A good high-risk merchant account provider with a focus on this industry will make the payment process speedy, streamlined and in line with the customer’s value of privacy. Your company should furnish the following.
When you make the decision to sell adult products, entertainment, and services, you are opting to jump into a highly regulated yet lucrative sector. Doing so with a premium high-risk payment processor at your side is one of the most important steps you can take to enhance your chances of success.