The 5 Best Merchant Accounts For Adult Oriented Products & Services
Adult entertainment has been around in one form or another for many centuries, but it’s only been relatively recently, with the advent of the internet, that people have been able to access it from the comfort and privacy of their own homes. Entering into the Digital Age has allowed the adult entertainment industry to expand dramatically in terms of sales volume and the number of customers making purchases. While it’s not known for certain just how much money the industry as a whole makes every year, the sex toy segment of the market brings in a whopping $15 billion per year on its own.
With the ability to reach customers via the internet and make online sales comes the need to accept credit and debit card payments. However, getting a merchant account to process those payments is much trickier in the adult entertainment industry than it is for other businesses. Credit card processing for adult businesses presents several unique challenges, and most providers won’t approve an account for an adult entertainment business. Virtually every provider in the industry classifies every type of adult entertainment business as being high-risk. If your provider of choice doesn’t accept high-risk businesses, you’ll be out of luck. However, there are several companies that actually specialize in serving a wide variety of high-risk businesses, including the adult entertainment industry.
In this article, we’ll explain the unique challenges faced by the adult entertainment industry and why it can be difficult to find a provider that will approve your business for a merchant account. We’ll also make some specific recommendations of providers that accept adult businesses. Finally, we’ll discuss the option for an offshore merchant account, as well as provide some tips to improve your chances of approval.
Read more below to learn why we chose these options.
Table of Contents
- Why Getting An Adult Merchant Account Can Be A Challenge
- The 5 Best Adult Payment Processors
- Looking For One Of These Adult Merchant Service Providers?
- Should You Look For An Offshore Adult Merchant Account?
- How To Increase Your Chances Of Approval For An Adult Merchant Account
- How Do I Find The Best Adult Payment Processor?
- In Summary: The 5 Best Adult Payment Processors
Why Getting An Adult Merchant Account Can Be A Challenge
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 some 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 their own specific lists of categories that they accept. These categories vary from one provider to the next, so it’s important to look for a provider that specifically accepts your business type. 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.
Just as there are many possible reasons for any business to be placed in the high-risk category, there are several specific issues associated with adult entertainment businesses that make them less likely to be approved for a merchant account. The following are the most common factors that can cause an adult entertainment business to be considered high-risk:
- 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.
- 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.
- 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.
- 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.
Note that being classified as a high-risk business is usually not the result of a single factor. More often, it’s a combination of two or more of the factors listed above.
The 5 Best Adult Payment Processors
Finding a provider that will process payments for your adult entertainment business, while obviously essential, is not the only factor to consider. A good provider will also offer a full range of products and services, fair contract terms, and reasonable pricing. Top-notch customer service is also a critically important consideration.
PaymentCloud (see our review) is an excellent all-around high-risk provider, but the company also offers a lot of specialized features for adult entertainment businesses. It supports almost all of the common sectors in the adult entertainment industry (with the notable exception of escort services). Unlike most high-risk providers, PaymentCloud doesn’t charge an account setup fee for new merchants – despite the additional underwriting required to approve your account.
The company emphasizes supporting eCommerce-based adult entertainment businesses, and partners with several popular web hosting companies to provide you with an all-in-one service that integrates web hosting, a payment gateway, and a merchant account. Web hosting is available through partnerships with Hostinger, DreamHost, HostGator, and many others.
Customer service is particularly important for any high-risk business, and PaymentCloud has an excellent reputation in this area. As with virtually all high-risk providers, pricing information is highly variable, so you’ll have to contact the company for a pricing quote that’s tailored to your business.
- No account setup fee
- Reasonable rates and fees
- Excellent customer support
- Few public complaints
- No publicly disclosed pricing
2. Durango Merchant Services
Durango Merchant Services
Colorado-based Durango Merchant Services (see our review) is one of our top picks for any high-risk business that needs to accept credit cards. While the company accepts a variety of adult entertainment businesses, it doesn’t provide a specific list of approved sectors within the adult industry on its website.
Nonetheless, Durango should be able to get you approved for an account, in most cases. In addition to working with domestic banking partners, the company also offers offshore accounts for merchants who need them.
Like most high-risk providers, Durango doesn’t disclose any pricing information on its website. However, the company has an excellent reputation for fair pricing and great customer service. While you’ll probably have to agree to a long-term contract, the company usually doesn’t charge an early termination fee if you switch to a different provider.
- Fair processing rates and account fees
- No early termination fees (in most cases)
- Offers offshore merchant accounts for some international merchants
- Offers dedicated account manager for customer support
- No pricing disclosures on website
- Usually requires long-term contract
Los Angeles-based eMerchant Broker is another great choice for an adult entertainment merchant account. The company stands out for its willingness to accept some of the adult entertainment industry’s riskier sectors, including escort services.
Unfortunately, this larger appetite for risk comes at a cost. Although the company advertises rates as low as 2.99% for qualified high-risk merchants, you’ll usually end up paying much higher rates than this. You’ll also need to accept a long-term contract that comes with an expensive early termination fee (ETF). However, these conditions are more or less standard with any high-risk provider.
eMerchant Broker excels at customer support – something we can’t say about most other providers in the payments industry. If you’re having a hard time getting approved for a merchant account for your adult entertainment business, it’s certainly worth getting a quote from eMerchant Broker to see what they can offer you.
- No application or account setup fees
- Full line of products and services
- Offers chargeback protection services
- Excellent customer support
- Advertises deceptively low processing rates
- Requires long-term contract with early termination fee
- More expensive than other high-risk providers
4. Host Merchant Services
Host Merchant Services
Host Merchant Services (HMS) is one of our favorite providers for low-risk businesses, but the company also serves a number of high-risk industries as well. On the High-Risk Merchant Accounts page of the company’s website, it advertises support for adult-themed websites (including membership sites) and adult novelty/toy businesses. The list of supported industries is not inclusive, so you should feel free to reach out to HMS even if your business type isn’t listed.
One of the things we like most about Host Merchant Services is its extensive disclosures regarding processing rates and fees. Unfortunately, this information only applies to low-risk businesses. As a high-risk merchant, you can expect to pay substantially more than the rates advertised on the company’s website. However, we haven’t seen any complaints about its high-risk pricing, so you should expect pricing to be competitive with what other providers can offer you.
Host Merchant Services offers a full line of products and services for any type of business and has a remarkably low complaint volume from its users. While you won’t get features such as month-to-month billing or transparent pricing disclosures, you will enjoy the same high level of customer support that low-risk businesses receive.
- Accepts several sectors of the adult entertainment industry
- Offers a full line of products and services
- Fair and reasonable pricing
- Excellent customer support
- Will usually require a long-term contract for high-risk businesses
- High-risk pricing not disclosed
- Usually requires a rolling reserve
5. SMB Global
Headquartered in West Jordan, Utah, SMB Global (see our review) is a high-risk provider that was spun off from one of our favorite merchant account providers, Payline Data (see our review). While the company is still fairly new, it offers a full range of products and services and has built up an excellent reputation within the payments industry.
SMB Global lists adult businesses as one of the high-risk industries it serves, but doesn’t provide a detailed list of specific sectors it can accommodate. The company mostly focuses on serving eCommerce businesses, and doesn’t appear to offer much support for in-person retail enterprises.
As with most high-risk providers, you won’t find any specific pricing disclosures on the company’s website. Instead, you’ll have to contact the company directly and obtain a quote that’s tailored to your business. Pricing is highly variable due to the number of banks and backend processors the company partners with to get you approved for an account. Offshore merchant accounts are also available if you need one.
- High-risk specialist accepting adult-oriented businesses
- Offers offshore merchant accounts
- Reasonable pricing and contract terms
- Excellent customer support
- Little support for retail businesses
- No pricing disclosures on website
Looking For One Of These Adult Merchant Service Providers?
While we highly recommend any of the providers listed above, they aren’t the only choices available. There are several other high-risk specialists that work with the adult entertainment industry that we weren’t able to include among our top picks for one reason or another. If you’re having difficulty getting approved for an account, the following companies are also worth considering:
New Hampshire-based Instabill is a small, but reputable high-risk merchant services provider. The company accepts a variety of adult entertainment businesses, including adult toys, gentlemen’s clubs, escort services, and many others. Unfortunately, we weren’t able to assign an overall score in our review of the company, so we can’t make a valid comparison between Instabill and the other providers profiled above. We’re also concerned about the company’s heavy reliance on offshore merchant accounts. As we’ll see below, offshore accounts are not a great option for US-based merchants.
PayKings enjoys an enviable reputation as a top-notch provider specializing in high-risk industries. The company accepts a wide variety of adult entertainment businesses and has a dedicated website page describing its services for adult industries. While online reviews of the company are quite positive, we haven’t done our own full review of PayKings yet. Thus, we can’t make a valid comparison between PayKings and the other providers listed above at this time.
Should You Look For An Offshore Adult Merchant Account?
There are several reasons why you might consider an offshore merchant account. Obviously, merchants most frequently sign up for offshore accounts because they are doing business in multiple countries and need to have an account with a local bank to process transactions. At the same time, offshore accounts can also serve as the “provider of last resort” for high-risk merchants who’ve been unable to get approved for a domestic merchant account. If your adult entertainment business is particularly high-risk (escort services being a common example), you might have no choice but to sign up for an offshore account.
Let’s be clear: offshore merchant accounts aren’t inherently a bad idea. Under most circumstances, they can function just as well as a domestic account. However, they also pose some potential risks to your business that you need to be aware of before committing to this option. The primary advantage of offshore accounts is that it’s much easier to get approved. Banking regulations are much looser in some countries than they are in the US, resulting in more relaxed underwriting guidelines and a much higher chance of approval. Likewise, offshore accounts often don’t come with monthly processing caps, meaning that you can process as many transactions as you like without having to worry about going over your limit and having your account suspended.
Sounds great, doesn’t it? Well, those looser banking regulations can also work against you. In some cases, there won’t be any government-imposed restrictions on how much your provider can charge you in fees, resulting in sky-high costs that are only kept in check by competition with other banks in the same country. You can also expect to have to wait longer to get your money, as settlement times will generally be much longer than what you can expect from a US-based bank or processor. Worst of all, you might not have any legal recourse if a dispute occurs. Your offshore bank might choose to hold your funds indefinitely, and you’ll have few options for getting your money back in a timely manner.
If you’ve carefully considered all the risks and benefits and decided that an offshore account is the best option for your business, almost all of the providers we’ve profiled above can help you get one. Check out our article on the best offshore merchant account providers for a few additional options.
On the other hand, if you’d rather not risk signing up for an offshore account, but can’t get a domestic high-risk merchant account, you might want to consider setting up an ACH-only option. This alternative dispenses with credit and debit cards altogether. Instead, your customers pay you directly from their bank accounts via eCheck or ACH payments. All you’ll pay is a single monthly fee and a low, fixed per-transaction processing charge. The obvious downside, however, is that you’ll lose out on sales from customers who insist on paying with their credit cards.
How To Increase Your Chances Of Approval For An Adult Merchant Account
Getting approved for a high-risk merchant account is often a nail-biting experience, but it can be particularly challenging for merchants in the adult entertainment industry. You should be prepared to answer a lot of detailed questions about your business and your finances. You’ll also need to provide a lot of documents and personal information. The underwriting process for a high-risk account is more extensive than it is for low-risk merchants, and it’s usually done before you can be approved for an account. On the plus side, once you are approved, your account should be pretty safe from unexpected holds, freezes, or terminations once you start processing.
Although getting approved for an account is never guaranteed, there are things you can do to make the process go more smoothly and increase your odds of approval. Here are several things you can do:
- Gather Documentation: Providers will want to see documents such as your business plan, your business license, and several recent processing statements (if you have them). If this will be your first merchant account, you’ll usually have to provide personal banking statements as well. Every provider has its own list of required documents, but it’s a good idea to have several copies of everything you need, particularly if you’re applying to more than one provider at a time.
- Shore Up Your Personal Credit Score: This step mostly applies to new business owners, who won’t have an established processing history. If your personal credit score is on the low side, anything you can do to improve it (e.g., paying off bills or credit cards) will improve your odds of being approved.
- Be Honest: We can’t emphasize this last point enough. Every day, merchants get turned down for accounts or have their existing accounts terminated because they misrepresented the nature of their business. It’s critically important that you be completely open and honest about what products and services your business is going to provide. As long as you won’t be doing anything that’s actually illegal, the high-risk providers we’ve profiled above will be more than happy to work with you. However, getting caught lying about your business, even at the application stage, can get you placed on the MATCH List (or Terminated Merchant File), making it far more difficult to get an account in the future.
How Do I Find The Best Adult Payment Processor?
Payment processing is complex and confusing, and being in a high-risk business makes it even more so. Merchants just want to know which provider is the best one on the market. Unfortunately, it’s not that simple. While all of the providers we’ve reviewed above can offer you dependable service at a fair cost, none of them are perfect. The best that you can hope for is to find the provider that’s the best fit for your business. This will take a lot of research and negotiating on your part, but we hope that this article will at least get you started in the right direction.
We also highly recommend that you obtain quotes from multiple providers, rather than simply signing on with the first provider that offers to approve you for an account. Although high-risk payment processing will always be more expensive than what a comparable low-risk business will have to pay, you can still get a relatively good deal if you shop around.
If you’re looking for more information about starting up an adult entertainment business, the following articles can help:
- Instant Approval Merchant Account Guide: How To Get A High-Risk Merchant Account Quickly
- What Are High-Risk Business Loans & Where Do I Get One?