Card Processing For Adult Web Sites

Since early 2003 Mastercard and Visa have imposed very strict rules concerning processing credit cards for adult sites.

Trying to get your own merchant account from a UK or European bank in the current climate of anti-adult is virtually impossible, with even long established, reputable sites experiencing difficulty in opening an account.

Third party companies offering transaction services are quickly being weeded out by Visa and Mastercard, with the excuse being that adult and gambling sites have high volumes of chargebacks and therefore present a risk to them.

In reality, a lot of the problem stems from the USA's anti terrorism legislation known as The Patriot Act.

The US government assumes that if you run an adult or gambling site then it's likely that you belong to an organised crime syndicate or a terrorist outfit, unless of course, you are prepared to give the card company detailed personal information about yourself.

In response, Visa have made it a requirement for third party processors to register each of their "high risk" merchants. In addition, in order to get Visa approval, you have to be either an American citizen or operate your web site through a US registered corporation.

The cost of Visa registration is $750 which has to be paid in advance, with no guarantee of acceptance and no refunds given in the event of rejection.

In addition, there is an ongoing fee of $350 per year just to stay registered.

The aim of this registration, according to Visa is to prevent dishonest merchants from continually swapping processors when their chargeback levels get too high - something that is common in the adult industry.

To reduce this problem, Visa have another card up their sleeve. If your chargeback levels are high (above 1% usually), they will discontinue processing for you, not just for now, but forever - and you have no chance of being accepted by another processor.

Before starting an adult site, you need to think long and hard about how you are going to collect your money via the Internet.

The doors are closing and despite many Spam emails suggesting that you can open a merchant account easily within 24 hours, it simply isn't true.

Some unscrupulous providers are profiting from the confusion in the market place and will sign up new adult accounts, simply because of the high fees they can charge. However, very few can actually provide a robust and continuous service for you - and by signing up with the wrong supplier, you could find yourself blacklisted by Visa and MasterCard, meaning that you won't get a merchant account in the future.

The good news is that there are one or two companies that are able to help.

The bad news is that the rates you'll have to pay will be in the region of 15% of all transactions, in addition to the initial set up costs.

Even large companies are being affected by the new regulations and several very high profile adult sites generating millions of Dollars a year in revenues have simply had to close down altogether.

Be very careful before signing up with ANY processor claiming that they can process adult or gaming transactions, because in reality, many are simply breaking the rules.

Be particularly aware of offshore processors, as these are high on the Visa and MasterCard "hit list".

If you are prepared to operate your site via a US corporation or are based in the UK (or have somebody based in the US to make the application), then it is possible to get an account.

Again, you have to be VERY careful about the company you choose - there are literally only two or three processors that are Visa verified and possessing the necessary experience in the adult/gaming industry.

So who are the main players?

The two largest adult processors are both USA based. Epoch Systems / Paycom and ccBill

As Visa verified processors, they have to run your account via the USA. If your business is not based in the USA, you will have to set up a US company for the purpose and will also mean a $750 verification fee paid to Visa International and a $375 renewal fee each year thereafter. Nobody said it would be easy.

But the good news is that both are well established processors in this market. Although the set up costs and the transaction fees look expensive, the accounts come with a whole host of extras that even includes the ability to run your own affiliate program and promote your web site via thousands of other web sites.

That's not all. You can also increase your revenues by up-selling your customers and promoting other adult web services after the initial sale has been made.

These processors are for serious web masters who wish to earn real money in the adult world.

The down side is that they now "scrub" extremely hard - this means that they look for reasons to decline cards in, they claim, an attempt to reduce chargebacks.

One site that we know experienced an 80% declined transaction rate - even the site owner's card was declined!

Adult is no longer easy!

COMING SOON - Exciting new information about European Adult Processors - low cost, easy set up and nice to deal with - about time too we say!