By Joy Allen
Sales and Account Manager, Connected.co
Sex, porn, kink, fetish — you name it, it’s all controversial and isn’t openly accepted or spoken about in society.
Most banks would love to be a part of the adult business; however, due to the controversial nature of our industry, accepting adult opens a bank up to reputational risk.
Most large banks are conservative but will consider merchants involved with novelty products or softcore content. It’s the hardcore adult content that is a bigger issue for them, often due to their customers and associated supporters, which makes them near impossible to work with. Smaller banks that aren’t similarly beholden to their customers or support bases usually do not have the capital requirements issued by Visa and MasterCard to process hardcore adult content. This leaves them unable to accept adult clients even if they are otherwise willing. With large and small banks off the table, we are left with industry-specific payment processing.
Let’s face it. Processing in the adult industry is just like sex in the real world. Everyone needs it and everybody wants it, but nobody likes talking about it. But today, we’re going to!
Porn is “high risk”
In 2002, Visa and MasterCard determined that adult content would be classified with a “high risk” merchant code. This means that businesses selling adult content would be charged higher fees than those not categorized as high risk.
After the new high risk change, PayPal decided they would no longer accept adult industry merchants, which started a domino effect with many other credit card processing companies. Since then, PayPal has steadily but slowly increased the amount of channels they add, helping to change the decision of other companies to “no on high risk” as well.
In addition to reputation, we have chargebacks. For various reasons, consumers get buyer’s remorse – but not because they didn’t actually purchase something. Rather, it’s because they’re embarrassed or otherwise experiencing porn shame, so they call their bank and issue a chargeback.
A large number of chargebacks is one of a bank’s biggest concerns since it can mean a faulty business. The fact that the chargeback is rooted in personal or social issues, verses bad business practices, is irrelevant to a bank. Making sure you monitor your daily sales and that your customer service is on point are key to helping reduce chargebacks.
But regardless of all these issues, sex still sells. It’s also part of Maslow’s hierarchy of needs, which means it’s something we all participate in in one form or another. As such, adult businesses won’t be disappearing anytime soon – but we still need to process those payments. At Connected.co, seamless, multifaceted payment processing is something we strive for.
Payment processing in the adult industry
Getting adult merchant accounts approved is pretty simple, but what takes the most time is that all adult sites require Visa and MasterCard registration. Today, there are so many options for processing in the adult industry that the real struggle is getting the best rates and having a trusted advocate that will fight for you – someone you can call and feel confident that your issues will be handled efficiently and correctly.
There are four main quality indicators to consider when looking at your current processor, or even at a new processor. They are:
Trust: The relationship that you have either with an ISO (Independent Sales Organization) or bank is one of the most valuable relationships for your business. You want to know that whomever you are working with is accountable for your business and will help steer you in the right direction.
Pricing: Processors and ISOs operate differently, which means each can offer different rates and fees. Often, agents and brokers upcharge rates for their own profit. With Connected.co, the banks set the rates for each account and we pass those rates directly on to you.
Back Up: Sites aren’t the only things that can go down. Processors can get flooded and go down as well. Having multiple payment platforms allows you to cascade multiple payment solutions, maintaining the processing power you need — Connected.co supports this functionality.
Reporting: Different processors offer different reporting or can offer different safety measures. With any IPSP you work with, you want to make sure they offer the latest in fraud protection and chargeback mitigation. Some of the best are Iovation and Threat Matrix, which along with Verifi and Ethoca, are built into the Connected.co gateway.
Let me let you in on a little hidden secret to getting a chargeback reversed. Yup, you heard me correctly: reversed. Make sure you are getting all of the internal reporting that a bank can offer, including the Visa TC40 data and MasterCard Safe data. These reports differ from Verifi and Ethoca and will allow you to catch fraudulent sales that you should refund the day you receive the report.
If you do this and keep track of it, at the end of the month when you are reviewing your statements and chargebacks, you can compare it to when you refunded a customer. If they still charged you back, you can send that information to the bank and they will reverse the chargeback. This is the only way to reverse a chargeback and not have it count against you.
Why choose Connected.co?
In addition to endless “in the know” tips, Connected.co offers multiple payment platforms for the adult industry while maintaining the ability to offer payment options for other high risk verticals.
Our state-of-the-art gateway offers you all of the fraud prevention and reporting tools needed to manage your credit card processing. With twenty years in the high risk processing business, our team is ready to help you with your merchant services to keep you up and processing — allowing you to focus on your business.
We work directly with our banks, which means the rates they give us are the rates we give you. Our in-house risk team alerts you of potentially fraudulent transactions in advance, before the bank puts you on Visa and MasterCard’s dreaded Match List. Most importantly, being directly connected to your account manager means you have an advocate for all your questions and support needs.
These and more are all the services we specialize in. If you have any questions or would like to work with us, let’s get connected!
Joy Allen is the Sales and Account Manager for Connected.co. They offer merchant accounts, payment processing, chargeback prevention, adult PSP and more. For business inquiries, contact her via firstname.lastname@example.org.
Image via Marco Michelini