Adult Credit Card Processing
The adult industry, though not mainstream or openly discussed much, has always been one of the largest segments of e commerce business and with the ever increasing growth of the internet and constantly improving content and services, the demand for adult entertainment products is projected to continuously grow and post record sales annually for years to come. The need for merchants in the adult industry to partner with a credit card processing service that specializes in these higher risk payment processing services is key for the longevity and success of an adult business operating in the 21st century. At Adult Merchant Services, we work to find the best solutions for our merchants to insure that their credit card processing and check processing services are being handled by the best banks for the industry.
Beginning with the first modern adult pornographic literature in 1748 followed by the first known adult movie in 1896, sexual imagery has been used by people for well over 2000 years, as early as the times of Mesopotamia. Over the centuries, civilizations have began to slowly recognize pornography and begin to slowly recognize it as part of the fabric of society. Fast forward to the 20th century and nearly 100 years after the first pornographic movie in 1994 is generally considered to have been the first adult website to have started, opening a door to an industry that has never looked back. With the increasing demand of adult content, websites struggled to accept payments until a solution for accepting online credit card payments, CyberCash, allowed for fast and simple payments to be made by customers and accepted by businesses.
Today, many of the banking institutions and eWallet services in the United States that are available to e commerce merchants are not open to accepting adult businesses, limiting the options of merchants and making the process to find a suitable service provider more difficult. Working with financial institutions that have a proven track record of providing safe and reliable adult payment processing services is essential for building a successful adult businesses, preventing any disruptions or sudden terminations of merchant account or other payment services, a problem that has the potential to ultimately destroy a business that would otherwise prosper.
Adult Credit Card Processing Table of Contents
The History of Pornography
Nearly 5,000 years ago, ancient Mesopotamians produced artwork depicting sexual acts, whether for religious or other rituals, it has been widely regarded as some of the first scenes of sexual activities outside of Paleolithic cave drawings of nude men and women. Again, during the Roman Empire imagery of sexual activities and other erotica were present at many of the ruins, surprising modern scholars as to the extent of blatant sexual references used by this culture that is thought to have been intellectually superior to other groups of the time. While not regarded as pornography, sexual references have appeared in other writings, including the Kama Sutra, though as a guide to living a meaningful and graceful life with love and family, part of the guide discusses various sexual positions in a manner available to all Hindu followers.
Erotica existed in writing for centuries even before the 1748 book Memoirs of a Woman of Pleasure was published in England, the first documented publication where the authors were recognized and thus eventually punished for their lewd writings that to that depraved society. Literature and artwork remained as the most common means for the distribution of pornography until a movie in 1896, Le coucher de la mariée was produced, beginning a new chapter in the history of pornography only 8 years after the first movie was produced. In the first three-quarters of the 20th century, video and magazines became some of the most available forms of pornography, from published novels to adult magazines and stag movies, the availability of pornography was more mainstream than every before, but no one had ever imagined that its largest medium had yet to even be invented.
Pornography has becoming even more mainstream with the advances in technology; what were once explicit novels about sex and sexual activities had made their way onto the internet with forums and bulletin boards allowing articles and stories to be shared among users. Shortly afterwards it was discovered that images could also be shared online and with this revelation, the first adult websites emerged. Unable to find ways to charge customers, merchants devised systems to gather customer information and only require a phone call to capture payment card information and complete the transaction. It was not until 1996 that the first online payment e wallet systems were designed by CyberCash, not a perfect solution for online payments since it limited transactions and used a coin system to transfer virtual currency between customers and CyberCash then to the merchants, creating a lethargic system that begged for improvements.
As technologies improved, the number of adult websites on the internet grew, and so did the demand. Online pornography is estimated to comprise of nearly 30% of all online content, relating in millions of adult websites and hundreds of thousands of searches per month on various adult topics. The growth of online pornography has forced adult websites to keep up with the demand for their products by offering videos and images, all of which are costly to produce and provide for free. E-commerce solutions have improved drastically since 1996, making transactions much easier for customers but merchants in the adult industry have still struggled to find safe and secure payment methods to continue accommodating their websites.
What is Adult Credit Card Processing?
Credit card processing is a payment system that is available to nearly all business types for companies located throughout the world, making it a truly global payment method for merchants and customers alike. Merchants operating a retail storefront that want to provide customers with convenient and easy payment methods will usually decide to accept credit cards as a payment option, while online credit card processing for internet merchants is an all but mandatory payment acceptance method.
Payments accepted by credit cards, and similarly by debit cards, provide merchants with nearly instantaneous authorizations for payments from the customer bank when a purchase is attempted in person or online. Authorizations that are approved and finalized during the same day will usually settle into the merchant’s bank account within 24-48 hours, providing consistent and reliable funding for businesses.
Merchants in the adult industry will find that most major credit card processing companies will not work with businesses that are categorized as high risk, as adult is generally deemed. Merchants in the USA that are adult providers have to register with the card associations as an adult provider, requiring an annual fee that is similar to an insurance, to properly process transactions through their network.
The predicament caused by the adult industry has created a void that has been filled by adult payment processors that focus on working with adult friendly banks to provide reliable adult merchant services. While rates might be slightly higher than a general e-commerce business, the reliability of the merchant account from an adult credit card processor will offer a long term solution well worth the added expense.
How does Credit Card Processing work?
As with general e-commerce and other high risk card payment transactions, an adult credit card processing transaction is a quick and convenient payment service for both the merchant and the customer. Even though the transaction only takes a few seconds to complete, the credit card or debit card authorization process is a complex process involving multiple banks and financial institutions working together to complete the payment request. At the point of authorization, the customer card account information received by the merchant from the customer and securely sent to the customer bank through the payment networks.
Involved in a single authorization are the:
• The cardholder
• The merchant
• The payment processor (working with (or is) the acquiring bank)
• The acquiring bank (merchant’s sponsoring bank)
• The issuing bank (cardholder’s bank)
• The card associations (ie; Visa, MasterCard, American Express, Discover, etc.)
• The payment gateway (for e-commerce transactions)
After a merchant has contracted with a merchant services provider, they will be furnished with a merchant account that allows the business to process credit cards through a few different methods, including online or through a storefront. When a customer is ready to make a purchase, either a credit or debit card is presented at the merchants terminal location, allowing for card account information to be captured by swiping or manually entering information, at that point the cardholder account information is encrypted and transmitted to the payment processor.
Online transactions are very similar to sales occuring at the merchant location but use an extra service to provide card security. When the online customer is ready to checkout, the online process will require the customer to enter card account information through their browser to be sent to the merchant’s shopping cart for submission into the payment gateway and onto the payment processor.
The customer card account information is received from the merchant location in the encrypted file and is forwarded on to the merchant acquiring bank to be entered into the payment card association’s network. The payment processor is usualy a seperate organization that is securely integrated into the merchant acquiring bank and actively provides merchant support, including financial management of the merchant accounts, to the businesses using their merchant services.
Upon receipt at the card association, Visa, Mastercard, American Express and Discover, cardholder account information is received, decrypted and a determination will be made to the type of card requesting authorization. Each card company has its own unique card account numbers, usually the first 2-3 numbers will distinguish one card company from another.
Once the card type is realized, either Visa or Mastercard will then forward the account information and request to the appropriate cardholder bank for authorization. Authorization involved checking the amount of the authorization against the available credit of the cardholders account and any other fraud protection measures that card issuing banks might have in place. Since American Express and Discover act as card issuing banks, cardholder’s requests are received and responses are determined in house.
Similar to retail swiped transactions, e commerce websites that are accepting payments online will have either a shopping cart or hosted payment page that is integrated into an adult payment gateway, connecting the merchant to their acquiring bank. The payment gateway works similar to a storefront credit card terminal by accepting the cardholder’s account information and encrypting the data for transmission to the card associations.
Both types of authorizations are nearly identical in process with the difference being in the acceptance method, but regardless if the authorization is approved or declined, the response code is sent back through the card association network and returned promptly to the merchant terminal or payment gateway to inform both the merchant and customer to the response.
How Adult Credit Card Processing Fees are determined
Merchants shopping for credit card processing services will notice that merchant accounts are advertised in a number of different ways, many times depending on the processor and the niche they operate in. Most merchant accounts will be priced in one of 3 ways; tiered, interchange plus (cost-plus) or flat fee.
The original method for billing merchants for payment processing services was through a tiered pricing system that established a set number of pricing tiers that all transactions were run through. Varying from 4-8 different levels, all credit and debit card transactions were checked against merchant agreed upon rates and once a payment card “qualified” for a tier, the merchant was assessed those fees for accepting a card.
Why use Adult Credit Card Processing?
Businesses in the adult industry accepting credit cards without a high risk payment processor or high risk payment gateway are at the risk of having their merchant account frozen or terminated. This can be a costly problem, both in the short term and in long term scenarios depending on the severity of the situation.
Merchants can have a variety of problems, including:
• Merchant Accounts Closed
• Funds and any Reserves held 180 days or more
• Fines from the Payment Processor and/or Card Association
• Business and Name added to the Match List
Most merchant accounts that are being used for adult purposes and not registered as such with the payment processor or card association will be closed, resulting in funds being held for 6 months or more, the potential for fines and being placed on the Match List, a file of terminated merchants who are unable to apply for merchant services due to prior problems.
Verifying that the merchant services company can work as an adult provider and will insure that businesses register with Visa and MasterCard as an adult provider will alleviate many potential problems and unnecessary costs in the future. Not all merchant services providers are able to process payments from adult businesses, but a search online can yield a number of financial services companies that include adult as one their acceptable merchant types.
Types of Merchants using Adult Credit Card Processing
Most adult businesses are using some form of adult credit card processing, whether it is a direct merchant account at the bank or it is an aggregated account with other higher risk businesses, many companies have opted to use a payment processor specializing in their industry.
Most common businesses using Adult Credit Card Processing
Adult Dating Services
Live Adult Web Cam
Adult Membership Websites Credit Card Processing
One of the larger segments of the online adult industry, adult membership websites will need to use the services of an adult credit card processor. Occasionally these membership websites with monthly recurring billing can be plagued by chargebacks stemming from friendly fraud or other variations of fraudulent activities.
Adult Toy Stores Credit Card Processing
A segment of the adult industry that operates as a general e commerce business, adult toy stores can experience difficulty at times establishing merchant services with certain payment processors. The amount of chargebacks and returns are minimal in this industry and credit card fees reflect this with some of the lowest costs in the adult industry.
Adult Dating Services Credit Card Processing
Similar to Adult Membership websites, dating websites working on a monthly re-billing model can experience higher than normal chargebacks due a variety of fraudulent sales. Having a strong fraud scrubbing program to verify transactions can help limit most fraud before it hits the banks.
Adult Video Services Credit Card Processing
Webmasters and Video producers can struggle at times finding a payment processing partner to accept payments for downloadable video clips, whether its a single website or a network of channels offering downloads, this can pose to be a significant problem finding reliable services.
Bath Houses Credit Card Processing
An often difficult type of business to set up with merchant services due to the negative connotations surrounding the industry, bath houses will want to use the services of an adult payment processor. Like any other type of sports club, bath houses offer a variety of memberships, but many of the problems with finding merchant accounts is due to the financial institutions not wanting to work together.
Escort Directories Credit Card Processing
In recent years, escort directories have come under fire for a variety of problems that occurred on a few websites. This has negatively impacted the industry with payment processors pulling back, resulting in webmasters losing merchant accounts and having a very difficult time scrambling to find payment processing solutions.
Live Adult Web Cam Credit Card Processing
Streaming video is one of the largest segments of the adult industry today, with businesses offering new products and experiences for customers, the niche has grown year over year at exponential levels. Merchants have experienced problems with customers charging back due to high bills and other friendly fraud reasons, leaving businesses with higher than average chargeback ratios and a difficult time securing credit card processing services.
Massage Therapists Credit Card Processing
Working in a remote environment that usually does not involve an office or permanent location, massage therapists have experienced difficulty find payment processing services for their businesses. Working with a higher risk payment services provider, massage therapists are able to set up payment card processing services.
Massage Parlors Credit Card Processing
Like the massage therapists that work here, massage parlors have been affected by a negative history of illegal activities and circumstances in and around their businesses. Many times, massage parlors experience difficulty in finding merchant services, requiring additional documentation to prove the legitimacy of the operation applying for credit card processing services.
Penis Enlargement Products Credit Card Processing
Like sexual enhancement products, penis enlargement products usually work on a re-billing platform and many times customers will resort to charging back before contacting the merchant. Instances of friendly fraud are very common and result many times in higher than normal chargeback rates that can effect the longevity of these merchant accounts.
Phone Sex Credit Card Processing
An otherwise tricky solution to set up for businesses operating over the phone, using and IVR dialer integrated into an adult payment processor will allow phone sex workers to accept payments over the phone without having to manually take payment card information prior to beginning the services. Most adult payment processors can help set this program up for merchants in need of this solution.
Sexual Enhancement Products
Sexual enhancement products can fall in to a gray area due to the claims of the manufacturers as to the abilities of their products. Customers that feel they do not want the product they purchased many times will chargeback on the transactions. Friendly fraud due to embarrassment or other similar reasons is very prevalent in this business space.
Sex Toys Credit Card Processing
Similar to any adult toy store, physical products are not considered to be high risk due to the fact confirmation of delivery can be provided for every sale. Some payment processors will not take so kindly to the product type and decline to work with these merchants do to the nature of the industry.
Strip Clubs Credit Card Processing
Patrons of Gentlemen’s clubs have a history of running up large tabs and from time to time merchants deal with these chargebacks. Partnering with an experienced adult payment processor familiar with the industry, merchants can find solutions to fit their needs with advanced point of sale equipment and other fraud detection software.
Swingers Clubs Credit Card Processing
Like bath houses, openly advertising swingers clubs have experienced difficulty with certain payment processors when attempting to establish merchant account services. Some clubs work on a monthly membership plus entrance fees while others might just charge a monthly fee; but regardless of the billing manner its important to work with an adult payment services provider that understands the industry and is fully accepting of all aspects.
Web Cam Credit Card Processing
The business of streaming video is extremely popular with some of the largest adult websites on the internet selling access to these performers. Working with an adult payment processor that is familiar with the billing methods of these businesses can help merchants combat fraud that might otherwise close merchant accounts from non-adult processors.
Adult Payment Gateway Services
Not all payment gateways are the same. Contrary to what a merchant services agent might claim, some payment gateway services do not want to have higher risk businesses in their portfolio, rather they prefer to work exclusively with lower risk/general e commerce type merchants. When searching for a payment gateway program to integrate into a website, it is suggested that merchants confirm the gateway provider will accept adult businesses and that they are a fully PCI Compliant payment gateway.
Merchants using the adult payment gateway provided by Adult Merchant Services will be able to process secure transactions through our PCI Compliant gateway without any risk of being terminated due to industry concerns. The adult payment gateway offers merchants a fully operational program to help manage and run their business with full transaction management capabilities and complete reporting functionality.
In addition to our security, our payment gateway has numerous features that separate us from the other adult credit card processing companies.
• Integrate into over 100 of the most common shopping carts
• Easy reporting, batching and transaction management
• Offsite storage of sensitive customer account data
• Automated Load Balancing between merchant accounts
Adult PCI Compliance
Merchants receive more than just an adult credit card processing service when teaming with Adult Merchant Services; we insure that all accounts are handled with fully PCI Compliant software and services, eliminating merchants liability and signficantly reducing any potential fraud being processed through the payment gateway.
PCI Compliance for adult merchants includes:
• Easy Registration — Becoming a PCI compliant business is fast and simple
• Ongoing Protection — Remain in PCI compliance and stay safe from fraud
• Stress-Free—Monitoring — Managed by our fraud protection support and services
Credit Card Processing with Adult Merchant Services
• Discount Merchant Services Fees
• Payment Processor specializing in Adult
• Fully PCI Compliant Payment Gateway
• 24/7 customer support services
Credit Card Processing with Adult Merchant Services
Benefits of Adult Merchant Services
• Low Transaction Costs
• Easy Transaction Management
• PCI Compliant Payment Gateway
• Award Winning Customer Support
Merchants in the adult industry in need of help starting a new credit card processing service, or with questions about their current adult payment processor are urged to contact one of our professionals at Adult Merchant Services. Our staff will be more than happy to take the time and answer any questions or concerns merchants might have in regard to their business and payment processing services.
Adult Merchant Services is a global leader in the adult payment processing industry with our quick and simple application process and our discount merchant services that offer one of the lowest rates in the adult payment processing industry. Our extensive knowledge of the adult payment industry has provided the necessary training for our staff to provide exceptional customer service in all segments, including transaction management and technical support.
Ecommerce merchants have excelled with our award winning PCI Compliant adult payment gateway as it has helped merchants improve the flow of their businesses and reduce credit card processing costs through the direct banking relationships that provide lower fees, faster authorizations and rapid settlements. With this added value, merchants are able to grow their companies with fewer limitations and making way for higher transaction acceptance rates and higher monthly volume limits; features that many adult credit card processing merchants will appreciate.