You might be familiar with the “high risk” tag imposed by banks on some industries that hinder their chances at securing a regular merchant account – Adult industry being one of them.
Working in the adult entertainment industry requires a few sacrifices, privacy and respect being at the forefront. However, not many realize that opening a simple bank account can also prove to be an uphill task.
Imagine facing difficulty while obtaining something as basic as a bank account!
Businesses related to or operating within the adult industry do not have it easy either. Merchants running an adult toy shop, book store, escort company, porn website or strip club especially have trouble processing credit card transactions.
There have been several cases of banks shutting down or freezing accounts of sex workers or businesses selling or even simply publishing, adult content. The worst part being, these banks do not offer any kind of explanation beyond being labeled as high risk.
One such example being, a couple years back a reputable bank decided to shut hundreds of accounts of porn performers on moral grounds. They reportedly cited porn’s “high risk” nature as a justification for account closures.
Even a ‘legally registered’ store selling adult toys had suffered similar fate by the bank.
Credit card processors like PayPal are no different. Back in 2010, an activist and writer had one such experience with PayPal wherein, they closed their account and froze funds when they tried raising money for a social cause. The writer had written about their experiences in porn and PayPal’s terms of service led them to conclude that the fact that they had done sex work was sufficient cause to deny them the money.
In fact, often PayPal will accept your business at first but once your account goes through the underwriting process revealing the nature of your business your account will be frozen and shut, discontinuing credit card transactions and disallowing removal of existing funds.
Discrimination of adult workers and businesses by financial institutions is common knowledge. So, why is an entire billion dollar industry being denied basic credit card processing services?
– Social stigma and taboo shrouding the adult entertainment industry is still prevalent in the current society.
– Acquiring banks do not allow processors to underwrite adult merchants.
– Some banks fear losing business because of some of their socially conservative clients, who might see the bank’s more risque clientele as reason enough to take their money elsewhere.
– Legal uncertainties, high chargebacks, fraudulent activities, high-ticket items and large monthly volume, etc. make it difficult to obtain adult merchant account solutions.
Find the right merchant account provider
With no merchant account, professionals working in the adult industry as well businesses cannot accept credit cards and as a result struggle to keep the business afloat. Often, adult merchants are taken advantage of and get scammed or charged exorbitant fees by credit card processors.
Despite of the strict banking regulations restricting the adult entertainment industry, there are several reputable high risk merchant account providers that offer quality adult merchant account services to adult merchants. Choose wisely!
There is an increasing global demand for adult entertainment and services. As long as it’s legal, sex workers and companies selling those products should have access to all the privileges that a regular business has.