Using an adult payment processor can help merchants reduce long term costs of operation while insuring the longevity of their business on the internet. Working with an adult payment processor that takes all the necessary steps for account underwriting, registration and maintenance of banking relationships can limit the potential of service outages, unnecessary fees or other costly disruptions.
A common occurrence in the merchant services industry is directly attributed to the sales person or organization that handles the merchant application submission to the payment processor, since many merchant services sales agents work on commission with a performance based pay scale, the best interests of the merchant are many times overlooked in lieu of the commission payouts. By not using an adult payment processor, this practice has lead to many adult merchants inadvertently applying for and being quickly approved as another type of business, thus avoiding registration fees and other business guidelines needed to be an adult provider.
One way to find the best adult payment processor that understand sand abides to the guidelines set forth by the card association for adult content providers is to insure that their merchants are properly set up with the payment processing partners and merchant acquiring banks. Failure to properly identify the industry of the business can result in suspension or closure of the merchant account along with funds being held for a 6 months to prevent any potential charge backs. In a worst case scenario, merchants run the risk of being placed in the Terminated Merchant File or MATCH List, a list managed by the card association that tracks merchants who have violated guidelines, their agreement or owe fees and are generally unable to apply for a merchant account in their name for up to 7 years.
One of the important questions adult merchants should ask a potential merchant services provider is about how they handle the yearly registration fee that is charged to adult merchants by the card association. Some payment processors will not charge this fee for one of two reasons; either they include the fee as part of the merchant account or they do not require the fee because they are not registering the merchant in the proper business category; while the latter can potentially cause problems in the future for the business, the adult merchant account providers that include the registration fee will generally charge higher fees during transactions, allowing the processor to recoup the registration fees and usually more.
When merchants are coded incorrectly, it means that the payment processor has set them up under a business category that does not pertain to their actual business. Merchants operating adult websites, whether its a membership website, directory site or another similar type business will generally be assigned the codes of either 5967, 7841 or 7311, requiring full review of the website and registration to insure that all guidelines are followed and compliance is maintained by the merchant. By using an adult payment processor, merchants can know that this will not be an issue in the future.
One of the final checks that adult merchants should inquire about is the type of payment gateway being used by your merchant services providers, because not all gateways are adult friendly. One of the largest and most sold payment gateways, Authorize.net, who is part of the Visa corporate, does not allow adult oriented or pornographic websites to use their services. Similar to having their merchant account set up with the wrong business type, merchants in the adult industry will soon be relieved of gateway services once an audit is completed of the gateway account.
A simple solution to prevent any service disruptions or unnecessary fees associated with a merchant account is by using an adult payment processor from the get go, by working with a professional that understands the industry and does not try to cut corners can save merchants a lot of time and money in the future. Merchants looking to start an adult business, or currently operating an adult business and have questions are encouraged to contact one of our payment professionals for more information and to get started processing credit cards.