How does an Adult Merchant Account help Mitigate Risk for your Business?
The high-risk adult merchants have the responsibility of every penny sent by their customers for the product or services sold. The adult entertainment industry is already in constant struggle with so many things. In such a situation, a merchant account is a key to success for a stable business. Due to the higher chances of chargebacks and vulnerability against financial fraud, the companies are always in a sort of struggle for safety. But the good part is that the adult merchant accounts enhanced by the new tools and software make the high-risk businesses less risky.
A lower number of chargebacks and money fraud can be attained through a customized solution. With a bunch of safety features, an adult merchant account helps the merchants get money from their customers safely. Also, when it comes to a refund to the end-users, safety exists until the money reaches its owner that is consumer.
What is an adult merchant account?
An adult merchant account is a bank account destined to receive payments from the customers for an adult entertainment merchant. The adult industry includes varied business products and services such as – adult toys, dating services, escort services, adult video stores, etc.
Why the adult industry is considered high-risk?
Several numbers of factors prove why the adult industry is called high-risk or unsafe. You should know about those factors because they always walk with the business owners and can intrude in many commercial decisions for the growth of the company.
High volume processing – Yes, the adult merchants have a huge client base and thus multiple payments take place every day. A business with a minimum processing volume of $100,000 per month is called a high-risk business. The higher the volume of daily transactions, the higher is the risk because the customer data is huge and the money that gets transferred is big. A small loop in the network may cause a financial loss to the company as well as the consumer.
Subscription-based services – Normally such businesses offer subscription-based services to their customers. Once the customer tries a product or service, he may not want to continue. But later he may forget to unsubscribe the offer and when the money deducts from the customer’s account, he realizes that the subscription is still ON. This makes him raise a chargeback demand. In other words, we can say that a higher possibility of the chargeback due to this reason, is also a cause to call such companies high-risk. Although there are other reasons also for a chargeback, for example – dissatisfaction from the product’s performance.
Strict legal restrictions and regulations – Yes, we all know how legal organizations keep an eye 24×7 on adult merchants. Such companies have international clients as well, which makes the circumstances even more difficult. It is very difficult to work in compliance with the laws and rules of varied countries. No financial institution wants to spoil its image in the eyes of the law and its customers. The finance companies are afraid that they may get the blame that they are inspiring addiction to a bad thing in society.
Controversial content – Of course, the content on adult business websites is always inappropriate for a big part of the society that contains children. Not only for children but also, it is considered cheap even for an adult to visit an adult website. Those who consume such content, do not accept it publicly. Conversations about these things always get the tag of ‘secret’. It is not a subject to discuss at the dinner table with the family. Right?? For the same hesitation, the adult entertainment industry is considered high-risk.
Banks deny to connect with the adult entertainment business – Due to the risky nature of adult companies and poor image, the conventional banks always hesitate to associate with the merchant. But due to the presence of the high-risk adult merchant accounts nowadays, the business owners do not need to worry. Amald, an adult merchant account provider serves merchants from all sorts of high-risk industries.
In many practical ways, a high-risk adult merchant account becomes the ultimate support for a merchant to ensure safer money transactions. Whether it is the customer making the payment or the company making a refund to the customer, the merchant account is the only bridge.
Chargeback support to reduce the issue – The first reason that a high-risk merchant looks for a merchant account is his urge to get rid of a higher chargeback percentage. 3% to 4% chargebacks happen in the case of adult entertainment service providers. The 3d secured payment processing that happens through the merchant account, gives a safer payment experience to the users. The safer they feel, the lesser they raise the demand for the chargeback.
Merchant Category Code helps mitigate risk – The MCC that is merchant category code is a four-digit code assigned to the merchants depending on the industry type. Every industry has a fixed code that denotes its identity. Through this code, the merchant account providers can know whether a business is a high-risk or low risk. A code that represents a high-risk industry helps the payment service providers mitigate the chargeback issues for the concerned merchant. These four digits are also necessary to decide the applicable fee for that business.
Some examples for MCC are –
MCC 5816 for Digital Goods: Games
MCC 4722: Travel Agencies
MCC 5941: Sporting Goods Stores
MCC 5411: Grocery Stores
Spotting suspicious transaction is easier – A merchant account service provider has a strong technological infrastructure to find out doubtful transactions. For example – a hacker purchasing with the name of an existing customer can be a common incident. A slightly wrong mistake in name spelling of the customer or late response to the authentication code demand etc. is a sign. Merchant accounts employ artificial intelligence to spot any suspicious activity.
Safety to customer’s money – Customers want to make payments on a safe platform while consuming adult entertainment. A merchant account can provide that security to the customers. They pay and their money, as well as precious financial details, travel securely to the merchant. This protection is equally important for the merchant because weaker gatekeeping against financial fraud will only make a business lose its customers.
An adult entertainment merchant can survive and operate smoothly with the help of a merchant account. A secured payment gateway is the most important thing. It keeps the customer as well as the company protected against some potential financial threats. Are you also looking for an adult merchant account? Then Amald is your answer because we have the best solutions in the industry. With the experience of working with clients of the same industry, we customize our solutions to meet the nook and cranny of your requirements. Contact us now and get in touch with our experts who will lead you to the actual and practical solutions.