Why are adult service providers called high risk merchant accounts?

Adult service providers have a high sales volume and yet, despite its high profitability, adult service providers have a hard time getting an adult merchant account whenever they attempt to accept payments online.

Why an Adult Service Provider might need a High Risk Merchant Account?

The reasons why adult service providers are termed as high risk merchant accounts can be briefly summarized as follows:

  • Due to steady increase in the sales volume and occasionally huge turnovers the risk of financial liability for the merchant account providers increases
  • New entrants in the business have more chances of refunds and chargeback
  • The risk of fraudulent transactions is more for adult service providers when compared to other businesses
  • Poor or no credit history causes it to become challenging for adult service providers to set up a high risk merchant account

Yet, when we search online we find tons of merchants accepting payments online suggesting that while it may be challenging for adult service providers to get an adult merchant account however, it is not an impossibility.

Why a High Risk Merchant Account for Adult Service Providers?

Adult service providers intending to launch or promote their business online must have the ability to process payments online and for that they would need to find a financial processor that provides high risk merchant accounts.

High risk merchant account providers can be based offshore or in the US and provide merchant accounts and third party merchant accounts. They are specially designed for creating processes that reduces the risk factor when targeting the high risk merchant account market.

Financial gateways like Instabill.com exist, offering the adult service providers’ businesses the ability to process payments online with adult merchant accounts. These processors accommodate this business by providing a base where the merchant can open high risk merchant accounts well within their budget.