ADULT CONTENT MERCHANT ACCOUNTS
HIGH RISK MERCHANT ACCOUNTS FOR ADULT NOVELTIES, TOYS, LIVE CAMS & MORE.
FAST APPROVALS. AGGRESSIVE PRICING. BETTER SERVICE.
HIGH RISK MERCHANT ACCOUNTS FOR ADULT NOVELTIES, TOYS, LIVE CAMS & MORE.
FAST APPROVALS. AGGRESSIVE PRICING. BETTER SERVICE.
Since the 80s, the Adult Related Content scene has been ever growing. Over the last year, the sheer number of adult sites, and traffic to them, have exploded. The web boasts an estimated 700m-800m individual porn pages, three-fifths in America. In 2017 Pornhub, which is the world’s most-visited pornographic website, had 64 million visitors per day in 2017. Last year nearly 30,000 users watch pornography on the internet worldwide, spending $3,075 — every second. What’s more, 25 percent of all search engine queries are related to pornography. That’s about 68 million search queries a day. Revenue growth among adult and pornographic websites increased at an annualized rate of just 0.3 percent to $3.3 billion over the five-year period ending in 2015. Regardless of how well the industry is doing, getting approved for an Adult Content Themed merchant account is difficult. PayMystic is a merchant account provider that will allow adult related vendors to accept credit card payments at their shop and on the go. PayMystic has created an online Adult Content store walk through with additional important information about setting up an adult related merchant account, controlling chargebacks, managing risk, and keeping merchant accounts in good standing.
PayMystic is a recognized global payment processing brand among online Adult Content companies. PayMystic’s extensive network of partner banks, payment experts, and elite portfolio of tailored online payment solutions has helped launch entrepreneurial Adult Content start-ups and enterprise organizations to the next level of corporate growth by reducing basis points and risk that’s associated with higher transaction volumes.
Thousands of merchants, from start-ups to enterprise-scale organizations, leverage PayMystic’s curated knowledge, expertise and experience of high-risk payments to securely process millions of transactions across an array of vertical industries. PayMystic works closely with online Adult Content stores, providing tailored solutions and timely advice to national and regional service providers, while helping them maintain the highest standards of banking and payment card industry compliance.
PayMystic’s team of experts, combined with our technology partners’ proven record of successful online Adult Content businesses, can facilitate successful new company launches and help existing businesses grow and scale.
According to an article on Medium titled “The adult entertainment industry: First mover and high returns”, The Adult Content Industry was at its best after videotapes. In the 1990’s dozens of producers, many of them based in California, churned out hundreds of X-rated films each month to buy or rent. Today, the adult entertainment industry has an annual turnover of $97 billion. While Hollywood produces around 600 films each year and generates $8.8 billion in profits, the adult film industry produces 13,000 films with profits exceeding $13 billion.
Last year nearly 30,000 users watch pornography on the internet worldwide, spending $3,075 — every second. What’s more, 25 percent of all search engine queries are related to pornography. That’s about 68 million search queries a day. Top performing companies in the Adult Content space are seeing more success by offering the ability to buy adult content online. By providing a way for customers to purchase adult content, you can expect your company to gain increased sales.
Competing against large market dominators such as PornHub, or OnlyFans is like David going up against Goliath. This is why many Adult Content entrepreneurs have found success by specializing in niche markets such as toys, video chats, and escort services. These niches are smaller than general-purpose Adult Content Industry, but the profit margins are higher and the customers tend to be very loyal. These types of specialty Adult Content sales also lend themselves well to selling online where merchants have an expanded customer base.
By offering Adult Content and Adult Products online, companies can also increase their sales by finding consumers who are searching for these products on the internet.
Online Adult Content Themed providers are categorized by SIC Codes, NAICS Codes and Visa Merchant Category Codes (MCC) to comply with payment card industry requirements.
Proper classification is vitally important to prevent funds from being held in reserve for misrepresentation. The online Adult Content Themed industry has a specific NAICS code which is grouped under “Hobby, Toy, and Game Stores” in NAICS or MCC codes, and can be classified according to the nature and focus of services. The following are some examples:
Additional information on Visa MCC can be found in this downloadable guide.
The first step in enabling online commerce is to establish a merchant account. The online Adult Content Themed industry is classified as higher-risk, making some businesses ineligible for merchant accounts at some sponsoring banks. Luckily, PayMystic’s expanded network of banking relationships gladly accepts the Adult Content category and provides competitive rates, terms and conditions.
Online Adult Content companies may find it advantageous to work with processing partners who are familiar with their industry, jargon and common business practices, that’s why PayMystic’s Payment processing sales representatives who are familiar with Adult Content Themed lingo, regulations and practices may be more effective at managing relationships. Online Adult Content stores who work with knowledgeable processing partners, can save time and money, improve efficiencies and attract and retain more customers and followers.
Some banks are not willing to accept Adult Content businesses as the industry can have higher-than-average number of chargebacks. Most payment service providers prefer traditional brick-and-mortar businesses over online retailers due to the increased risk of chargebacks and fraud. Given that many banks may not understand the Adult Content industry and that many people desire these products, it may be difficult for them to find a bank that understands the process. Some acquiring banks will only provide adult themed credit card processing if the business has a long history of sales with the documentation to prove that they have the ability to stay in business into the foreseeable future.
Adult Content Themed sites have also been a target for fraudsters as the adult themed content websites have expanded. Adult Content Themed owners have faced difficulty when it comes to the online space, often getting denied for the same services they offer at their retail location. As EMV chip cards are now widely deployed fraud has moved online.
Here are some risks commonly associated with the Adult Content industry:
Consumers who do not receive the dramatic results they expect from a Adult Content product may initiate a chargeback. They do not even have to prove the company made an exaggerated claim. They only need to demonstrate that a Adult Content company hinted at a great result to win a dispute.
Consumers who feel they did not want to purchase a product and or do not recognize the merchant descriptor may file a chargeback. They will then dispute the charge that appears on their credit card statement. Many card issuing banks require consumers to contact the merchant before they process a chargeback request.
Adult Content companies in the early stages of setting up their businesses may not have the appropriate levels of customer service support to deal with consumer complaints and inquiries. Consumers who are unable to communicate their concerns to merchants are at increased risk of turning to payment card issuers for refunds and chargebacks.
Yes, at PayMystic, online Adult Content Themed are our specialty. Our financial services specialists are familiar with the industry’s unique framework and diversified categories, business models, SIC and NAICS codes and VISA MCC. We underwrite our Adult Content merchants before sending their applications to our sponsor bank.
Once new merchants establish credibility and trust with PayMystic’s banking partners, they receive personalized attention and ongoing risk management from PayMystic’s team of payment specialists. This personalized service, coupled with the sheer volume of transactions we process through multiple banks, ensures our merchants receive the highest level of service and support.
Choosing the right payment processing partner is critical, because without the ability to accept payments, merchants are out of business. PayMystic’s merchant onboarding process combines sophisticated technology with human oversight and review. Experienced underwriters who understand the Adult Content industry, and have expertise in payment card brand and banking industry compliance, bring a refreshingly holistic approach to new account set-ups.
Whether you’re interacting with customers in person, your interactive website, or mobile app, PayMystic will give every merchant the attention and resources they deserve and a one-stop shop for processing solutions. The Adult Content industry is growing and PayMystic can help accelerate that growth. The first order of business is eliminating any barriers to progress. Look no further than PayMystic, where getting a merchant account will open doors to a bright and prosperous future.
Since many customers prefer to pay by credit card, we work with adult companies to install card readers at their physical locations and assist with building an online credit card processing program that integrates easily with their website.
Because of the potential higher risk associated with Adult Content companies, more due diligence is required during the new merchant onboarding process. Also, not many sponsoring banks will transact Adult Content merchants due to it’s risqué nature, but luckily PayMystic has a vast network of sponsoring banks. Complexities of the inherent stigma regarding sex toys and adult related products, banks classify these businesses as high risk. This means underwriters need to review a range of documents to assure the business is compliant, financially sound, and a good credit risk. PayMystic is unique because we underwrite merchants in-house before we submit their applications to the bank. Because our team of underwriters is experienced in high-risk, your business is presented to the bank with all required documents and full disclosure, to engender trust and stability.
Presenting your business in the best possible light from point of first contact is important because merchant accounts are essentially a line of credit from a processor. Because high-risk merchants have higher chargeback ratios and regulatory exposure, financial institutions are concerned they may violate card brand rules, laws and regulations. Complaints to the FTC against a merchant create liability not only for merchants, but can also hold processors accountable under Know Your Customer (KYC) regulations.
PayMystic’s in-house team of underwriters and risk managers have curated knowledge in all areas of high risk. We are best qualified to guide you through the process efficiently and painlessly while helping to present your business to increase approval and gain credibility.
Once an Adult Content company is approved, payment processors set monthly processing limits for new businesses, typically between $25,000 and $50,000 per month, for the first three-to-six-months. This gives processors time to develop a customer risk profile by evaluating payment flows, average ticket sizes, processing levels and chargeback ratios. They want to see that you have a history of making timely payments to your creditors. They want to see proof that you have a loyal customer base which provides you stable income.
Those Adult Content companies that maintain a stable, consistent performance throughout their initial trial periods can usually increase their processing limits. PayMystic’s risk management team works with merchants and sponsoring banks to shorten trial periods and raise processing limits based upon good merchant credibility.
Maintaining a low chargeback ratio is key to maintaining a healthy merchant account. When chargebacks exceed card brand maximums, your merchant account is at risk of being shut down. If a merchant category has consistently excessive chargebacks, banks will sometimes shut down an entire vertical industry. For this reason, it is critical for high risk verticals to self-regulate and work collaboratively to establish industry best practices.
Keeping track of your Transaction Chargeback Ratio as well as your Volume Chargeback Ratio is critical because this is what Visa, Mastercard and payment processors monitor. Payment processors with high chargeback ratios in their merchant portfolios can trigger unannounced audits by Visa or Mastercard. For this reason, PayMystic, closely monitors chargeback and refund ratios, reacting quickly to spikes in activity. Excessive refunds, frequently the result of alerts, can be a sign of fraud or poor business practices. This type of information the card brands and banks may consider when assessing risk and potential closure of a merchant account and or vertical.
The formulas shown below use simple math to derive Transaction Chargeback, Volume Chargeback and Refund Ratios:
Add total monthly number of chargebacks and divide by total monthly number of transaction. For example – if during a month you processed 5000 sales, and there were 100 chargebacks, your chargeback ratio would equal 100/5000, or 2.00%.
Add total monthly dollar amount of all chargebacks and divide by the total monthly sales volume.
For example – if during a month, you processed $500,000 in sales, and your chargebacks were $10,000, your chargeback ratio would equal 10000/500000, or 2.00%.
Add total monthly number of refunds and divide by total monthly number of transactions.
For example – if during a month you processed 5,000 sales, and there were 100 refunds, your refund ratio would equal 100/5000, or 2.00%.
Add total monthly dollar amount of all refunds and divide by the total monthly sales volume.
For example – if during a month, you processed $500,000 in sales, and your refunds were $10,000, your refund ratio would equal 10000/500000, or 2.00%.
It is important not to ignore chargebacks, because win/loss ratios matter. Visa and Mastercard can impose penalties and fines in the tens of thousands on payment processors and their sponsoring banks for continuing to process transactions for merchants that exceed the permissible 2 percent chargeback ratio. Non-compliant processors and banks may also be subjected to further scrutiny and potential shut-down by card brands and regulators.
Here are some recommended ways to maintain low chargeback and refund volume ratios:
Refunds are a reality of life and a cost of doing business in the Adult Content industry. By accounting and budgeting for refunds, Adult Content merchants can accommodate dissatisfied customers, avoid chargebacks and improve transaction flows.
Proactively identify fraudulent and stolen cards and suspicious behavior when possible. Having items like an SSL certificate, additional billing details, and other fraud detection tools.
Dissatisfied customers who have access to live support will frequently be satisfied that they had the opportunity to air their grievances. They may be satisfied with a simple return or refund and find it unnecessary or initiate a dispute or chargeback.
Follow product orders and shipments with a simple survey or thank you email. This simple gesture will improve brand recognition when customers receive their credit card statements and make it easy for them to contact your company to complain or request a refund.
Providing customers with a dedicated, toll-free number and email address will alleviate their concerns and build good will. Adult Content businesses that are highly accessible to customers have been shown to increase customer loyalty and decrease chargeback and refund ratios.
In the always-on, always-connected world, customers expect immediate confirmations and emailed receipts when they place orders online. A good CRM program can automate this process and include tracking information with each shipment notification.
Companies with high levels of credit card transactions are in a better position to absorb chargebacks. Low-volume merchants can find themselves in the dubious position of having a high chargeback ratio with just a few chargebacks.
Create instant notifications of incoming requests for refunds, chargebacks and assorted customer inquiries. These services can be implemented in-house or outsourced to third-party providers. Merchants have a small window to react to customer disputes before card brands rule in favor of consumers. Automated chargeback and refund alert systems help merchants mitigate risk.
Adult Content providers rely on eCommerce and POS (Point of Sale) sales to scale their businesses. Credit card payments transacted online or by phone are called Card Not Present (CNP) transactions. Online CNP transactions involve credit card gateways that transmit payments from merchants to their payment processors.
Following is a list of recommended attributes of payment gateways that address the unique requirements of Adult Content Merchants:
Some Adult Content companies may need multiple merchant accounts to support their diversified array of offerings. Gateways should ideally be able to manage multiple merchant I.D.s organized under one master MID relationship.
Payment gateways need to seamlessly integrate into CRMs, POS systems, third-party software, and eCommerce shopping carts to facilitate all forms of online, MOTO and in-store commerce.
Adult Content companies need access to a variety of real-time reports and transaction data to grow and scale their businesses and manage chargebacks and refunds.
In addition to enhanced reporting, Adult Content stores need secure access to transaction data from anywhere they happen to be working, with built-in permission levels to facilitate all levels of employees and management.
Payment gateways must comply with the Payment Card Industry Data Security Standard (PCI DSS). Ask your gateway provider if they are PCI DSS compliant and verify their certificate annually. Adult Content businesses also need a gateway with a data vault for tokenization of credit card numbers and encryption of customer personally identifiable information (PII).
Tokenization replaces a Primary Account Number (PAN) with a randomly generated set of numbers/letters and records this in the data vault. This is to prevent hackers from accessing customer data. By storing PII and PAN in a highly secure, offsite location merchants shift their liability to the gateway provider. Encryption and tokenization keep your customer’s information safe while allowing merchants access to the data for future transactions.
The online Adult Content industry has become a worldwide phenomenon that is only continuing to grow. PayMystic is excited to play a supporting role when it comes to the growth of online Adult Content stores. Our extended family of Adult Content businesses, with vastly different models and product sets, are equally committed to optimal results, performance metrics and profitability. Some offer subscription programs; others provide mobile apps. All want affordable and easy high-risk payment card processing, which is our specialty.
What is affiliate marketing? Affiliate marketing is a partnership between merchants and affiliated individuals and companies that sell for them on the internet. Companies of all sizes, from leading global brands to start-up entrepreneurs, use the affiliate marketing model to great advantage, finding it an effective and lucrative ecommerce strategy. For example, thousands of Amazon.com affiliates promote products on their websites, redirecting buyers to Amazon’s site where they can check out and complete the sale. These sales are tracked by unique URLs that enable affiliates to earn commissions.
Creating an effective affiliate marketing plan begins with identifying trusted and reputable affiliates with extensive networks and followers, retail analysts have noted. These sources can help introduce products and services to markets outside a company’s traditional marketing footprint. Some examples might be a blogger with thousands of followers, or an e-zine with a strong vertical industry focus.
Because affiliate marketers are ideally an extension of a company’s brand and salesforce, it is crucial for organizations to create an affiliate program with clearly articulated terms and conditions, leaving nothing to chance. Some companies may outsource most of their promotional efforts to affiliate marketers. Others may supplement their traditional salesforce with a few affiliate partners.
Companies need to consider their primary objectives and corporate culture when creating an affiliate marketing program. Companies that manage more than one sales force, such as telemarketers and outside sales, have learned to structure sales programs to ensure that different teams are not competing against each other. This principle is equally relevant when working with affiliate marketers, who have proven to be most effective when they are not in direct competition with internal sales teams.
Payment acceptance: Affiliate marketing takes place on the internet, where payment methods vary. Merchants that only accept traditional credit cards will miss the opportunity to scale their businesses globally, by not accepting the most popular payment methods of other countries. Partnering with a company that specializes in cross-border payments and understands the unique regulatory environments of different countries around the world, will solve this issue.
Establish dedicated URL links: Targeted, accurate URLs are directly tied to affiliate marketers’ commissions and need to directly link to landing pages and product codes. Companies need to work with IT specialists to accurately track and promptly commission affiliate sales.
Create a coupon program: Considering how many consumers search for coupons and offers online, doesn’t it make sense to create coupon programs that help affiliate partners attract prospective buyers? Discount codes are one of the biggest growth hacks on the internet and show no sign of slowing down.
Stay in touch with affiliate partners: Establishing deep ties with affiliate partners means notifying them in real-time of any changes in inventory, pricing models and promotions. No company can afford the embarrassment of having an affiliate learn of a discontinued item or clearance sale through a third party. As sales representatives on the front lines of selling a company’s products, affiliate marketers deserve real-time alerts to keep them agile and motivated.
KPIs, banners: Affiliate marketers, like any sales professionals, need to know their key performance indicators, not only to track their closing rates but to be inspired to reach even greater heights. While there are multiple ways to do this, establishing a secure portal where they can log in and view their activity, commission status and current promotions will help them stay on track and cut down on customer service calls.
Before you approve a new affiliate, your first step in preventing affiliate fraud is to fully vet them. Ask the Affiliate about their current brand relationships and how they promote their products. Their responses will help you evaluate if their values and culture are consistent with your company’s image and brand. Ask the affiliate how they will drive traffic & sales to your offer. Check to see if the affiliate has behaved fraudulently in other programs before approving them.
To stay apace with ever-changing rules and regulations, it is necessary to periodically update your affiliate terms and conditions. Let your affiliates know how these updates will be broadcast and request confirmation. Be sure to include a due date for compliance to the new terms as well as an enforcement strategy.
Monitor for violations using technology and human intelligence. Consider contracting with third-party service providers that use technology to monitor websites, or build those capabilities in-house. Ideally, machine learning coupled with human intelligence is the best way to ensure compliance.
The adage, trust but verify, applies when monitoring affiliates. The following guidelines can help identify potential fraud:
Affiliate software: Unique applications developed by companies to track and manage their affiliate marketing programs.
Affiliate link: This distinct URL, created for each affiliate marketer, enables companies to recognize, track and pay commissions to affiliates.
Affiliate ID: These unique IDs are sometimes used in addition to unique URLs on websites to identify affiliate marketers and ensure that they are compensated for sales.
Payment Mode: Pertains to the method of payment used by a consumer to complete an affiliate-referred sale. Most affiliate programs offer payment methods beyond traditional credit cards to appeal to global consumers.
Affiliate Manager/OPM: Affiliate managers, who specialize in all aspects of affiliate marketing, provide expert guidance on establishing and maintaining affiliate programs.
Commission percentage/amount: This refers to the percentage of each sale that companies provide in commissions to their affiliate marketers.
2-tier, or multi-tier, affiliate marketing: Like multi-level marketing schemes, this method rewards affiliate partners for referrals and recommendations, creating a second tier of sub-affiliates who can also earn sub-affiliate commissions.
Landing pages: This web page is used to promote a specific product and is frequently used to test a market’s receptivity to a product or service.
Custom affiliate income/account: Some companies reward top-producing affiliates by creating an elite sales program with higher-tiered commissions.
Link clocking: Link clocking shortens affiliate-identifying links, keeping them short and easy on the eyes.
Custom coupons: Custom coupon programs, directly linked to specific affiliates, help companies track and analyze affiliate sales.
A growing number of companies are working with PayMystic to optimize and grow their affiliate programs. Contact us today for a no-obligation review.
Thank you for taking the time to review this compendium to learn about available opportunities and solutions in the Adult Content industry. We look forward to welcoming you to our growing merchant community.
Our online application takes minutes to complete. Once approved, our relationship managers will help you personalize your business management portal and leverage our full complement of secure payment gateway and chargeback management tools. They’ll help provision your processing account, eCommerce website and POS systems in brick-and-mortar stores.
PayMystic will also make it easy for your customers to find you, by helping you create an engaging online and in-store presence and seamless customer checkout experience. Take your Adult Content business to the next level today.