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.

A word about payment providers and the adult entertainment and products industry.

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.

Boosting your chances of securing a high-risk merchant account.

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.

• Before you apply, work to enhance your personal credit history and score as these will be examined carefully by the provider’s underwriters. Also, pay any outstanding debts.
• Make sure that all taxes are fully paid in a timely manner. If any liens have been imposed on you as a result of delinquent taxes, your application might be denied.
• Be totally honest and upfront on your application. Inconsistencies, omissions, and lies will be discovered, which could result not only in your application being rejected but also in an industry-wide blackball.

Special focus on avoiding chargebacks.

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.

• Requiring customers to actively agree to your website’s terms and services before any purchases are allowed.
• Cross-referencing billing and shipping addresses through the use of the Address Verification System (AVS).
• Making it mandatory that the customer provides their card verification value (CVV) for all purchases.
• Investing in IP tracking software to flag unusual purchases.
• Using 3-D Secure technology to further verify customers’ identities.
• Instituting a two-day authorization hold before products are shipped or services are performed. This gives the cardholder or their bank time to spot fraud.

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.

How your high-risk merchant account provider will streamline your billing.

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. 

• Age verification in the software. This protects both you and your client, ensuring that you remain in compliance with strict federal regulations in this regard.
• Discreet billing. This feature ensures that the nature of your customer’s purchase will not be specified on their credit card statement. Be sure to advertise this as a selling point.
• Multiple payment options. Especially in this industry, customers want to be able to have flexibility in how they pay. Your account provider should allow you to configure your system to facilitate credit and debit card, ACH and mobile payments, and perhaps even cryptocurrency for those opting for maximum discretion.
• Demonstrated compliance with rules and laws. As you know, the adult industry is heavily regulated, and this protects both you and your client. Make sure customers understand that you are partnering with a payment processor dedicated to compliance as well as committed to keeping their data safe and secure from hackers.
• Excellent customer service. Having a dedicated support team available to assist as soon as problems arise helps to ensure that the customer’s payment experience is trouble-free. In an industry where integrity and credibility could not be more important, having this support is an absolute must.

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.