The adult entertainment industry is a multi-billion dollar industry. The industry suffered a decline in the 80s and 90s but enjoyed an uptick when the Internet was born. Once this happened, it changed the game entirely. Selling both content and adult products generates an extremely high volume of transactions via credit card payments. Learn why accepting card payments, via multiple adult merchant processing solutions with an experienced adult payment processor, is of utmost importance.
Today, the consumption of adult entertainment and online dating has climbed to astronomical heights.
According to statistics, 120 million people visit PornHub, one of the biggest sites in the adult industry every day.
In 2019, the adult website reported 42 billion visits.
It is no secret that major adult websites get more traffic than Netflix, Amazon, and Twitter combined.
An investigative BBC report has even gone on to assert that 37% of the content online is tilted towards adult entertainment.
A surprising fact is that these people are not just skimming over the content.
According to research, men spend an average of 6 minutes daily looking at adult content and they fork out money too.
Over $3000 is spent on adult entertainment every second and this comes down roughly to $260 million per day, mostly via credit card payments.
Needless to say, the annual revenue from the adult industry is more than the National Basketball Association, Major League Baseball, and National Football League combined.
The adult toy industry in the U.S. is also a massive niche. Various adult merchant processing solutions and adult payment gateways are used to route this high volume of business to multiple acquiring banks. In reality, only a small group of these banks cater to this massive industry and accept adult merchants as their business associates.
In 2020, it was estimated to be worth $7.1 billion and presently accounts for a 28.92% share in the world market.
The Adult Industry Continues to Grow in Leaps and Bounds
There are a number of reasons why the adult industry continues to grow that vary from strength to strength.
Here are some of those reasons:
- Discretion and privacy when accessing adult content
- Purchases are anonymous
- Upsurge in online adult stores that offer lower prices
- Technologies like Virtual Reality (VR) and Bluetooth have created more niche and market opportunities
- Boost in public interest on sexual health and wellness
- More adult content in mainstream media, particularly in movies and music
It is crystal clear that there is a staggering demand for adult content.
That number will continue to grow as more market opportunities open.
This is perfect timing for anyone looking to enter this booming adult market.
For any new merchant looking to fully cash in on these multiple opportunities, the time to act is now.
But payment companies and banks do not process transactions for adult industries because they are considered high risk.
This means merchants will have to look elsewhere for a reliable adult payment processor to handle their business transactions.
Examples of Products and Services in the Adult Industry
- Intimacy Toys and Novelties
- Adult Massage
- Online Lingerie and Adult Clothing
- Gentleman’s Clubs
- Strip Clubs
- Adult Magazines and Bookstores
- Escort Services
- Adult Dating Services
- Live Adult Video Streaming Services (Webcam)
- Adult Content Websites
- Adult Membership and Subscription Sites
If you are looking to start a business in any one of these niches, you cannot directly approach a bank or open a merchant account.
Since the industry is considered high risk; you need an adult payment processor to handle your transactions.
Opening a High-Risk Merchant Account
A major reason why escort services, adult dating sites, and other adult businesses encounter difficulties in opening a merchant account is that they are continuously vulnerable to a huge number of chargebacks.
Most banks, credit card companies, and payment solution providers do not allow adult payment processors to underwrite various high-risk businesses because of this.
The quickest way to open an adult merchant account is to apply through a high-risk merchant account provider like SecureGlobalPay. Your application will always be reviewed by an experienced underwriting team familiar with your particular business type and business model.
Documents Usually Required for an Application with an Adult Payment Provider
- Pre-printed voided check or bank letter
- Bank statements not older than 90 days
- Employer Identification Number or Social Security Number
- Valid government-allotted ID i.e. driver’s license or international passport
- Banking transaction history for the last 3 months
- A secure and active website
Be prepared to provide additional documents like your business plan, business license, and other documents you think can boost your chances of getting quick approval.
Submitting Your Application to an Adult Payment Processor
When submitting your application for a high-risk merchant account in the adult industry, ensure that you are not involved in any illegal activity.
Adult payment processors do not work with businesses that have dodgy backgrounds or are engaged in illegal activities. This simply does not happen.
This is why underwriters perform due diligence and assess the legitimacy of anyone interested in doing business with them.
In addition, underwriters want to appraise the level of risk your business attracts.
Be prepared to answer questions they might have about your company and be downright honest about it.
Adult payment processors freeze and terminate high-risk merchant accounts all the time if they find out businesses were not straightforward and provide misleading information.
Avoid doing this because it can get you on a watch list or have you blacklisted, making it very difficult to open an adult merchant account.
Honesty and openness are crucial watchwords for any merchant applying for an adult payment account. It is vital that you are upfront about everything.
Increase Your Chance of Approval with an Adult Payment Provider
All underwriters take an interest in a merchant’s credit card processing history and personal credit score.
Well-established transaction history is usually not an easy option for merchants starting out because they have hardly done any business.
All in all, make sure your finances are healthy. A high personal credit score and decent balances on all bank accounts improve your chances of getting approved.
That is why it is important to clear your card debts and pay your bills quickly.
Don’t forget to also take calculated steps in securing your website for customers to make card payments. This move instills confidence and is of great importance in the checkout process.
Improve Your Credit Card Processing Volume Cap
A start-up merchant account processed by an adult payment processor always comes with a monthly cap.
In other words, there is a limit to the amount of credit card transactions that are allowed every month.
Once that threshold is reached, payments can no longer be accepted and are pushed to the following month.
The adult entertainment business is hugely profitable. And as soon as you find your niche, it is understandable that you will want to milk it for what it is worth.
If you want to increase your credit card processing volume, maintain a great credit history and manage your chargebacks properly resulting in low chargeback claims.
Ensure that you have hit your monthly credit card processing volume 3 months in a row before asking for an increase.
If you are looking for industry professionals ready to assist you with various payment processing solutions in this vertical, look no further. SecureGlobalPay, adult merchant processing solutions that make sense.