When people mention the high risk credit card processing industry, the first vertical that is typically mentioned is the “adult industry.” The adult industry is an all-encompassing name that includes product websites selling adult toys, streaming videos, novelties, and chat rooms. The adult industry is changing, like all industries, with more free content provided to users.
However, with all the free content, the usage of credit cards is still quite significant and chargeback ratios for many online adult websites is greater than 1% creating underwriting and risk issues for the acquiring banks. Alternative Merchant Processing has been working with adult merchants since the founding of our company and is very comfortable in this industry sector and is confident to provide a highly competitive processing program for our merchants.
Categories of Adult Businesses
Adult Merchant Accounts can process in a variety of ways with AMP — traditionally, there are two options and each has a benefit to the business owner: (1) is a monthly or recurring membership in which the fees are received every month and (2) the other type is daily discount whereby the credit card fees are taking out daily before the money is posted to the merchant’s bank account.
Problems in Getting an Adult Merchant Account Provider
Based on working with adult merchants for past 10 years, adult merchant account banks are risk adverse in approving an adult merchant account for Visa, MasterCard, American Express acceptance. And, it is not uncommon for adult merchants to pay very high credit card fees (extending up to 18% in some cases). These escalated fees hurt with cash flow, bottom line profitability and have caused many merchants to claim bankruptcy or go out of business. AMP will offer competitive rates and help ensure the future success of our merchants.
Every business has its own characteristics, especially with relation to the risk profile it presents. The underwriting criteria of adult service business tends to keep many acquiring providers (such as banks and credit card processors) away from adult service businesses.