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There is no denying the fact that the adult entertainment industry is one of the most profitable industries in the world. It is a multi-billion dollar industry in the US alone, making it a much sought-after business venture. But the consistent issue that the adult industry faces is it being listed as a high-risk business that limits its payment processor options. Due to the nature of the business, many payment processors stay away from businesses related to the adult industry.
That being said, there still are a few adult entertainment merchant accounts that understand the risks involved in the adult entertainment business. They strive to make payments on adult websites easy and convenient by accepting credit and debit cards at low costs.
If you’re looking to handle payments on your adult webcam site, then you would have to use an adult webcam merchant account and an adult payment processor to get things going. In this article, we will see and understand adult business merchant accounts, the challenges faced by adult businesses to get a merchant account, and how you can open a merchant account with providers who support adult businesses.
What is an adult merchant account?
Contrary to popular belief, adult merchant accounts are not the same as payment processors. Merchant accounts are special business bank accounts that are required by every business for payment processing. For every business, whether they are processing online payments or via a POS terminal, a merchant account is necessary to accept payments.
A merchant account is no physical account from where you can withdraw money. It is an electronic-only account that merchants use to direct payments from customers. The money that is debited from the customer’s account is held in the merchant account till the settlement date. Once the settlement date comes, the money is transferred to the merchant’s regular bank account or paid out through checks.
Together with payment processors, adult merchant accounts are the backbone of online payment processing that provides a safe framework for digital transactions. Both adult merchant accounts and adult payment processors serve different purposes, and any adult business dealing with online transactions needs both on its website.
Why is getting an adult webcam merchant account a challenge?
The adult entertainment industry has been considered a high-risk business for a long time. There are multiple reasons for this categorization of the adult entertainment business. Not many payment providers agree to support adult businesses due to these reasons. The factors that make adult businesses high risk include the following:
Regulatory compliance requirements
All adult businesses are heavily regulated by various laws and regulations. The minimum age requirement for customers, as well as all performers on adult websites, is a mandate in almost every country in the world. Similarly, the sale of sex toys or other eCommerce sex products is restricted in many countries, making selling sex toys regulated. These complexities associated with regulations for adult businesses make most payment processors stay away.
High chargeback rates
Most adult businesses face the wrath of high chargeback rates that put them into the high-risk category. Anything above 1% in a chargeback is considered high-risk, and most adult businesses score higher than that limit to be classified as a high-risk business.
High fraud risk
Most adult businesses are susceptible to fraud on the internet. Fraud is a concern in all eCommerce businesses, but the adult entertainment industry is more vulnerable to such fraud due to the nature of the business.
Reputational risk
One of the major reasons for payment processors to stay away from adult entertainment businesses is reputational risk. Many companies don’t want to be associated with any business that might taint their reputation, even if those businesses are legal.
Security risks
Adult websites are more likely to be attacked by hackers and cybercriminals, making them a high-risk option. Due to this reason, adult websites need an additional level of security which leads to them being labeled as high-risk businesses.
How to open an adult webcam merchant account?
An adult merchant service is a must for any adult business, including adult webcam business for cam girls. Without an adult business merchant account, customers won’t be able to make payments on your adult site, and neither can you receive payments in your account. Any adult webcam merchant account allows you to process credit and debit cards through payment gateways, POS systems, or credit card terminals.
For your adult business, you need to apply for an adult webcam merchant account that can help you process payments on your adult website. There are 2 types of merchant accounts that businesses can choose for their adult website. Businesses based out of the US can choose to go for a domestic adult merchant account, for which you’ll need to have a US-registered business along with a US bank account.
The second type of adult merchant account is the offshore merchant account, which is meant for businesses that don’t have the US registered business and bank account. This type of account usually takes 5 to 10 business days for approval. The offshore merchant accounts provide more flexibility in terms of country of registration and location of your bank account. Using an offshore merchant account, businesses can process payments in multiple currencies for cam girl salaries and get deposits in their currency in any country.
A few of the documents needed to avail of an adult merchant services are as follows:
- ID
- Bank letter
- Proof of domain ownership
- Utility bill
- Business registration document
- Proof of tax ID
- 3 months bank statements
- 3 months processing history
Top merchant account providers for adult webcam business
Finding a merchant that will help process payments for your adult website is not an easy job. Firstly, there are not many providers catering to adult services. Secondly, there are many factors to consider before you can choose an adult business merchant account. Here are our top picks for an adult webcam merchant account provider.
1. PaymentCloud
Payment Cloud is an excellent choice as an adult business merchant provider primarily due to its specialization in handling high-risk businesses. Some of the notable features of Payment Cloud are as follows:
- Virtual terminal included
- Free credit card terminal included in every account
- Mobile processing solution
- ACH and echeck processing
- Authorize.net and USAePay payment gateway
- Parsley QR code payment service
- No account setup fee
- Long-term contract needed
- No monthly minimum for low-risk businesses
- $15 per month fee for low-risk accounts
- Fee varies for high-risk businesses depending on the back-end processor used
2. NationalProcessing
National Processing is a Utah-based provider that specializes in ACH processing for small businesses. They serve a variety of high-risk adult businesses and provide extra fraud protection and liability for their merchant accounts. Some of the features of an adult merchant account on National Processing are:
- Free credit card terminal
- No long-term contract is needed if processing hardware is purchased
- ACH and eCheck processing available as an add-on
- $7.95/ month PCI compliance fee
- Variable monthly account fee for high-risk businesses
- Variable processing rates for high-risk businesses
- Choice between interchange-plus and membership pricing plans for low-risk businesses.
3. DurangoMerchantServices
Durango merchant services provide a full range of products and services, especially for eCommerce and retail businesses. They also provide adult merchant accounts for adult businesses and other high-risk companies. Their best features include the following:
- International merchant accounts
- Cryptocurrency merchant accounts
- Mobile processing through iProcess app
- eCheck processing
- iSPY fraud protection
- Long-term contracts
- Variable account and processing fees
4. HostMerchantServices
Host merchant services is a Delaware-based merchant account provider that is capable of processing payments for US-based adult business owners. They specialize in eCommerce solutions and provide a free website and email address to interested customers. Below are the highlights of HostMerchantServices:
- Virtual terminal included
- Free terminal available for merchants processing over $20000 per month
- Full range of countertop and mobile credit card terminals
- Choice of Vital or Bonsai POS system
- Choice of Authorize.Net or Transaction Express payment gateway
- Gateway fee of $5-$10 per month
- Chargeback fee of $15
- No application or setup fees
- No PCI compliance fee
5. CCbill
A very well-known payment merchant that is popular among normal and adult businesses alike. CCbill provides merchant accounts for any type of adult business including, live streaming, web camming, digital entertainment, etc. It is a trusted and proven resource for adult business merchant accounts and adult credit card processing. Here are some notable features that CCbill provides:
- Active risk management
- Flexible Website Compliance Support
- One-Click Legal Cross Sales
- Secure and safe platform
- Adult processing prices vary from 10.8% to 14.5%
- Cancellation discounts
- Discretely displayed purchases
Many popular adult businesses use the services of CCbill due to its reputation and experience in the adult entertainment industry. One such readymade webcam script is xCams which comes integrated with CCbill that helps you kick-start your webcam business. You don’t need to worry about integrating an adult-friendly payment processor, as xCams provides a robust adult payment gateway in CCbill. The review by CCbill of your adult merchant account usually takes 7 to 10 days, and you can opt for either split payments or direct payments as per your business model.
Conclusion
Adult merchant processing is a tricky business that not many processors agree to do for adult businesses. But luckily, we have quite a few payment processors that provide an adult website merchant account to help you process payments through credit cards on your adult website. You can talk to the aforementioned merchant account providers and get more information regarding their plans.
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