A common question for experienced adult merchants, and usually a surprise for merchants new to the adult industry, is if businesses need to pay the adult merchant annual registration fee commonly required by Mastercard in order to accept credit cards. When merchants are inquiring with adult payment processors and adult merchant services providers, the answer to the question whether this registration is necessary for adult businesses might yield a different answer from every company spoken to.
The introduction of the Mastercard Business Risk and Assessment Mitigation (BRAM) program was done as a way for Mastercard to monitor and control the types of businesses and products being sold using the Mastercard network. While Mastercard do not approve or underwrite merchants that apply for network access individually, they do try to periodically check merchants for any legal or intellectual property/rights violations using web crawling programs or referrals from customers and inform the merchant acquirer to their findings.
When merchants are approved for a merchant account, they are assigned a 4 digit Merchant Category Code (MCC) number by their merchant acquirer depending on the type of products or services that their business offer. This use of MCC codes is accepted and required by Visa and Mastercard when a merchant acquire approves a business for merchant services, allowing Visa and Mastercard an easier way to manage their vast networks of merchants and easily make changes to standards or guidelines to the entire category if needed.
Merchant acquirers with merchants processing with the MCC codes pertaining to adult content providers; 7273 (dating and escort services) or 7841 (video) will be assessed a yearly compliance fee for registration of $500 per merchant for providing access to the Mastercard payment network. This fee is usually charged as a pass through cost to the merchant and the merchant is usually required to pay this fee when the acquirer is billed by Mastercard.
Its important for adult businesses to understand that some payment service providers will advertise that they do not charge these registration fees, but merchants should beware that the payment service provider will be assessed this fee by Mastercard and the payment services provider will recoup this registration fee through other excess costs or hidden fees wrapped into their merchant services program.
Another misconception that merchants have when being informed about the Mastercard adult registration fee is that they would like to decline the use of Mastercard and only accept Visa with their adult business. While the thought of saving hundreds of dollars a year by not accepting one card type runs through many merchant’s heads, the merchant acquirers and payment processors are unable to issue a merchant account with only one of the card association networks integrated into the merchant, thus making it not possible to avoid the Mastercard compliance.
Merchants in the adult industry with additional questions about the adult merchant annual registration fee or looking to lower their credit card processing fees might be interested in speaking to an adult payment processor that is familiar with the adult industry and a leader in providing low cost merchant account services. Our payment processing professionals are available to speak to any adult merchants with questions, concerns or looking for a quote for their payment processing services.