Why Are Adult Merchant Accounts Considered High Risk?

Merchant account services are very important to most businesses. They're a variety of financial services that include, but aren't limited to,  point of sale transactions, debit and credit card processing, check drafting, and age verifications. In most specific use, though, merchant accounts are the services that enable businesses to accept credit and debit cards over the internet.

Risk Profiles
Risk profiles are considered the key to understanding why the adult business has difficulty gaining merchant account services. Every business has a unique risk profile, based chiefly upon the underwriters' opinions of what is really a risk. To be fair, there are a few things every bank sees as risks; the most pertinent of which is legality. Another risk factor that often causes adult businesses to be denied is the high charge back risk.

Legal Risk
For a bank to refuse to grant a business a merchant account under the legality clause, they have to only believe the business enterprise is questionable, or 'close' to being illegal. Due to the general opinions of adult services, at least the ones expressed in public, this really is a condition that's easily filled. Because of this, there are adult merchant accounts created specifically for the adult service provider.

High Charge Back Risk
This is especially pertinent to companies that provide a free trial offer followed by automatic billing. The income from such practices is far from guaranteed, and banks know this. Any service that's likely to end up canceled by as many people as keep it is going to qualify as a risk to a financial institution.

How Adult Merchant Accounts Differ
Adult merchant accounts differ primarily in the payments. Though every account is personalized to some degree, adult accounts generally require a good deal additional flexibility and tailoring. In this respect, adult accounts are very different than regular merchant accounts, which are typically more rigid. They are also, unfortunately, prone to a lot higher rates of interest.

Obtaining an Adult Merchant Account
Regardless of the obvious issues, it is fairly easy to obtain an adult merchant account once you know where to look. The first thing is usually to gather all the information about the business that may be required. Next, search online for merchant service providers who provide adult accounts. Third, apply and provide required information. It is, ironically, much like obtaining financing. Mainly, the net must be cast over as large a space as possible while one waits for approval.

The Best Business Solution
One thing to remember when searching for a merchant account provider is the standing of the one you select. A reputable provider is far more likely to be able to provide your company with services than one who isn't as well-established; simply due to the fact that they have been around long enough to develop business relationships with underwriters.

Getting a merchant account is most likely one of the most important things in the continued life of a business. With online shopping outstripping the more conventional version, businesses who want to remain in business must have a merchant account. Adult businesses are no different. When frustrated by financial refusals, adult service providers should keep in mind that there are adult merchant accounts specially designed for them. Click here for more details.