Content is king online. Adult merchants constantly update content and reach out to audiences across the globe. Many adult merchants have a significant following of loyal customers.
However, the risque content offered by adult merchants, combined with the need to control access to the the content by minors, can create hurdles when it comes to obtaining payment processing accounts.
Adult content, dating services and adult toy stores all offer goods intended for people over the legal age. Age restrictions are difficult to enforce online. In countries like the United Kingdom and Germany, there are severe restrictions on the credit cards used for these services, to ensure only adults can access the services.
Although these services are federally legal in the US, adult merchants have trouble gaining access to traditional merchant accounts. Banks and payment providers class these businesses as ‘high risk’ and refuse to offer credit card payment services. They claim that online adult services face a greater risk of customer disputes and fraud. American Express, for example, doesn’t allow cardholders to pay for online pornography.
Card payments in the United States are considered to be the least secure method of payment. Additionally, many adult merchants have recurring payments & subscription billing models that can be impacted when cards are the payment method
One in five credit cards are reissued every year in the country. Updating card information when cards are reissued is labor intensive. And each time a recurring billing customer is contacted for obtain updated card information, you give the customer an unnecessary opportunity to cancel the the service.
The combination of more cancellations and the inability to obtain updated card information negatively impacts your cash flow from recurring payments.
The ACH network is widely considered to be the most efficient and safest payment system in the world. The network currently handles $41 trillion annually and more than 90% of all electronic transactions in the US are made with payments by ACH.
With ACH, payments are electronically debited from customers' bank accounts. Funds are then deposited to your business bank account. Millions of Americans regularly pay for goods & services with ACH payments.
ACH is particularly effective for recurring payments & subscription payments. Consumers rarely change bank accounts, whereas cards are frequently changed or reissued. Once an ACH payment is set up for recurring billing, payments continue steadily, providing a stable source of recurring revenue. With no need to contact customers & risk unnecessary cancellations.
There is rarely a need to update ACH payment info. Therefore, cash flow from recurring payments continues uninterupted. With fewer cancellations occurring since customers do not have to be contacted to obtain updated card data.
A high risk business model can be mitigated by processing higher volumes through a secure online payment gateway with extra protection. Still, you must keep returns & chargebacks below a certain threshold to be able to offer payment by ACH. This reduces the risk for everyone involved on the platform.
The more payment options you offer at checkout, the more sales you make. ACH payments are a familiar & trusted payment option for US buyers.
ACH payments offer significant benefits over cards for recurring & subscription billing models. Stabilizing cash flow while reducing unnecessary customer cancellation of services.
How are you handling payments for your online adult business?
Contact us today to establish your adult merchant account.