According to a March 2016 study conducted by Statistic Brain, there are 72 million visits to adult sites every month on the internet.
The growth of the internet, combined with changing social attitudes about sex and porn, has proven a bonanza for the adult entertainment industry. With the click of a button, users can access and purchase a variety of material with a credit card.
Despite this incredible growth, banks and traditional financial institutions are reluctant to partner with businesses in this industry. Obtaining Adult Merchant Accounts and the services necessary to process online credit card transactions can pose difficulty to merchants in the adult entertainment business.
Fortunately, there are solutions. Let SecureGlobalPay be your guide in obtaining an affordable, secure online merchant services account.
How to get an adult merchant account
The adult entertainment industry is a diverse and growing one. Merchants offering everything from strip clubs, pornography, escort services, online dating and sex toys abound.
What all these businesses share in common is a high volume of credit card chargebacks. Banks and traditional financial institutions are reluctant to provide services to merchants and industries who face this problem. This poses difficulty for adult entertainment merchants seeking to process credit card payments online.
The solution is to choose an online payment service provider with a proven track record of working with so-called “high risk merchant accounts.” SecureGlobalPay is one.
SecureGlobalPay provides versatile payment solutions and lower account rates through its merchant account services. Fill out our easy, online application today to take advantage of our selection of offerings, tailored to your unique business.
Online payment system provider vs. credit card processor
Many adult entertainment merchants seek to avoid the bias of banks and traditional financial institutions by signing up with an online payment system provider such as PayPal, Stripe or Square. Such businesses will initially accept adult entertainment merchants and allow them to begin processing credit card payments.
What many adult entertainment businesses do not understand, however, is how the approval process works. Services such as PayPal do not actually start the evaluation and underwriting process until up to six months after transactions start processing.
It is therefore with some surprise that adult entertainment merchants abruptly find their accounts suspended after six months of booming business. Services like PayPal then notify the merchants that they cannot work with adult merchants and can sometimes freeze their assets for up to six months.
Types of adult businesses accepted
SecureGlobalPay is more than willing to consider reputable, legitimate adult businesses as potential partners. We are prepared to approve adult merchant accounts and work with a variety of merchants in the adult industry, including those offering:
- Adult Toys and Novelties
- Adult Bookstores
- Adult Content Membership Sites
- Online Lingerie and Adult Clothing Shops
- Strip Clubs
- Adult Massage Businesses
- Escort Services
SecureGlobalPay is willing to consider merchants in the above-captioned areas. If your product or service doesn’t fall into one of these common categories, never fear. Our Underwriters are prepared to consider and evaluate any sort of adult entertainment business that does not engage in illegal activities.
NOTE: Your chargeback rate must be less than 2%. E-commerce merchant businesses are expected to have secure, working websites.
The application review process
When Underwriters begin evaluating adult businesses, they seek to ensure that companies are legitimate and operating according to best-practice business principles. In the case of adult entertainment merchants, this requires providing valid disclosures and restrictions.
Once the legal requirements unique to that industry have been verified, Underwriters will then turn their attention to determining a business’ level of risk.
Determining risk involves examining a business’ credit scores, credit card processing history, bank statements and website. Underwriters seek to ensure that a business pays its bills on time, keeps its chargeback ratio low and maintains a positive bank balance. Business websites are examined to ensure they have a secure SSL as well as explicit privacy and refund policies.
Underwriters are more likely to approve merchants that take time to prepare and make a good impression. Paying off all outstanding bills, having savings in the bank and nominating a principal with good credit to file the application will increase your chances of approval. Applicants who demonstrate sound financial housekeeping are more likely to be awarded accounts without limits, such as volume processing caps or a mandatory rolling reserve.
Merchants that obtain approval can immediately begin processing credit card payments. SecureGlobalPay clients are also eligible to receive integrated chargeback management software and chargeback alerts. A fraud filter also can be set up for online payments.
Increase your credit card processing volume
Merchants that receive accounts with processing volume caps can overcome the limited number of permitted monthly charges with time and discipline. Adult merchant accounts with low chargeback ratios, no unpaid bills, and money in the bank can request a limit increase. Businesses should have at least three months of processed transactions under their belts before seeking an increase from the account provider.
Chargebacks occur when a customer disputes a debit or credit card transaction. Merchants that fail to stay on top of chargebacks can face punitive financial penalties and even termination of their accounts.
The key to fighting chargebacks is to have a strategy. To fight and win a chargeback dispute, a merchant must prove that a customer ordered and received a product or service. Detailed documentation like signed delivery slips, address or CVV verifications can be enough for some transactions. Others may require more documentation, such as e-mails between the customer and merchant or proof that a consumer used the same information and IP address on another transaction. The more prepared a merchant is, the greater the likelihood of winning a chargeback dispute.
Preventing chargebacks in the adult industry
The adult entertainment industry is exploding. According to a study conducted by Statistic Brain, global sales of sex toys reached more than $15.25 million in 2017.
Despite the industry’s success and society’s increasingly permissive attitude toward sex, most people are embarrassed when a spouse or significant other catches them ordering adult items. This sometimes leads to the customer’s denying the purchase and issuing a chargeback.
Every chargeback has the potential to harm an adult business. Merchants can take steps to minimize this risk. For example, if the name of an online adult business obviously reflects what the merchants sells, an e-commerce site may want to adjust the name so it doesn’t draw attention on a customer’s credit card bill.
In order for this to work, online merchants need to clearly communicate to customers how information will appear on a bill. Communicate this to them via receipts, order confirmations, and emails.
A chargeback prevention system that works
SecureGlobalPay has partnered with Verifi and its new Cardholder Dispute Resolution Network (CDRN) as well as Ethoca’s alert system to create a chargeback prevention and control system. Since the CDRN works with banks and card issuers, merchants have control over resolving credit transaction disputes. Offering alerts and the resolution network allows merchants to achieve the greatest rate of chargeback resolutions while having direct input in the process.
Adult entertainment industry categories
Standard Industrial Classification (SIC) codes are four-digit numerical codes given to business establishments by governments in the United States and elsewhere to identify the primary purpose of their businesses. Typically, merchants in the adult industry fall into these SIC codes:
- 5945: Hobby, toy, and game shops primarily for adult novelties and toys
- 5947: Gift, novelty, and souvenir shops (an alternative for adult novelties and toys)
- 5968: Direct marketing, continuity/subscription merchant for pornography websites, content memberships, and other adult continuity products, such as electronic items
- 7299: Miscellaneous personal services; not elsewhere categorized for adult massage
- 7375: Information retrieval services for adult websites
- 8139: Business, professional, labor, political, and similar organizations (an alternative used for adult membership sites)
Visit the United States Department of Labor to view a complete SIC list.
NAICS are 6-digit codes used by federal agencies to classify business establishments by type. NAICS codes are used to collect, analyze, and publish statistical information about similar types of businesses and how each impacts the U.S. economy. The following NAICS codes are most commonly used in the adult entertainment industry.
- 451120: Hobby, toy, and game stores (often used for adult novelties and adult toys)
- 451211: Bookstores for adult magazine, e-books, bookstores, DVDs, and other retail products
- 453220: Gift, novelty, and souvenir stores (an alternative for adult novelties and toys)
- 454111: Electronic shopping, internet retail sales for adult ecommerce websites and adult online sales
- 517110: Wired telecommunications carriers for adult content websites
- 792903: Amusement and recreation services for adult bookstores, strip clubs, and other adult retail locations
- 812990: All other personal services for adult dating, escort services, strip clubs, and adult massages
Visit the United States Census Bureau’s Northern American Classification System to view the complete NAICS code list.
SecureGlobalPay can help your online adult business get advanced fraud protection and innovative gateway features.
Let us help you find the perfect, cost-effective merchant account to get your electronics business off the ground.
- No Application Fees
- Competitive rates
- No VISA/MasterCard Required
- Secure Payment Gateway
- FAST Approval Times.
- High volume? No problem, we can help!