Adult merchant account

One of the benefits of choosing PPS for your payment processing provider is the flexibility you have in product offerings. 

The term “adult entertainment industry” is a broad description of a  wide variety of adult-themed products and services. There are many  separate sectors within the adult entertainment industry, and virtually  all of them are considered high-risk by banks and processors. However,  some sectors are riskier than others in terms of getting approved for a  merchant account.

Here’s a brief list of the most common categories found within the adult entertainment industry:

• Online dating websites
• Sex education courses (books, videos, webinars)
• Lingerie items
• Fetish-related items
• Sex toys and novelty items
• Lubricants and lotions
• Streaming video services
• Adult-themed video games
• Adult videos and photography
• Telephone sex operators
• Escort services

Most high-risk providers who accept adult entertainment businesses  have specific lists of categories that they accept, and these lists vary  from one provider to the next. In searching for a provider for your  adult entertainment business, it’s vital to look for a list – usually  posted somewhere on the company’s website – that details the specific  types of adult businesses the provider will accept.

Factors that cause businesses in the adult entertainment industry to be considered high-risk include the following:

• Reputational Risk: While most processors will  gladly work with any profitable business, they do have their reputations  to think about. Some providers simply don’t want to be associated with  these types of businesses, even if they’re perfectly legal.
• Heavy Regulatory Compliance Requirements: Adult-oriented  businesses are more heavily regulated – particularly at the state level  – than other types of businesses. Minimum legal age requirements for  both performers and customers apply in virtually every jurisdiction. In  other states, the sale of sex toys and other adult products is  prohibited outright. With eCommerce businesses operating in virtually  every state, compliance with these laws adds an additional layer of  complexity that many processors simply don’t want to deal with.
• High Chargeback Rates: Having a higher-than-normal  chargeback rate (i.e., over 1% of sales) is the single most common  factor in causing any business to be considered high-risk, and it’s a common problem in many sectors of the adult entertainment industry.
• Higher Risk Of Fraud: Although fraud is an  ever-growing concern for all eCommerce businesses, it’s historically  been a larger problem in the adult entertainment industry.
• Additional Security Concerns: Adult businesses have  been frequent targets of hackers and other cybercriminals, requiring an  additional level of security than other businesses. If a provider feels  that your business is at an elevated risk of a data breach, it may not  approve you for an account.
• Organizational Policies: Even if a provider doesn’t  categorically exclude adult entertainment businesses, it may have  written policies – often related to the factors listed above – that  preclude it from doing business with an adult entertainment vendor.