First Card Payments – Adult Services Merchant Accounts
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Don’t Make This Common Mistake
A common mistake a lot of first-time adult industry merchants make is opening a Square, PayPal, or Stripe account only to find that their funds have been frozen and their account is terminated a few days later. The problem is that these payment processors approve almost any business, even if that business is on their prohibited list.
They don’t pre-underwrite the files, so you slide under the radar for the first week or so; when they find out, your funds are held for a minimum of 180 days. Yikes!
At First Card Payments, we will get your company approved for the correct merchant account from day one so you can focus on growing your business.
Adult Industries We Cover
Adult Book Stores
Chat and Phone Operators
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Ensure you avoid chargebacks. We can help!
How to Apply for a High-Risk Adult Merchant Account
Adult entertainment is now one of the biggest industries in the world yet a lot of banks still deny applications for merchant accounts from companies offering adult services. Running this type of business may make it harder for you to get approval because you’re tagged as a high-risk merchant.
Aside from processing card-not-present transactions, adult entertainment is considered high risk because you’re processing a large number of transactions and offering subscription-based services, not to mention the legal restrictions that are just the nature of the business.
But there’s good news! It’s still possible for you to get approved for a high-risk adult merchant account, especially if you follow these tips:
Save money. Banks will look for stability in the businesses they grant adult merchant accounts to, so one of the best ways to get their approval is to have some money stashed in a separate account that will serve as your emergency fund. You will only use this reserve account for refunds and chargeback fees; it will show banks that you are serious about your business so they should also take you seriously.
Build good credit. If this is your first business, you should start building and improving a business credit score by getting a business line of credit or a business credit card. Also, make sure to pay on time and even early if you can so you can establish good credit and get good scores from major reporting agencies. If you have bad credit, that could lessen your chances of getting approved for an adult merchant account.
Always choose honesty. The thing is, you can’t hide anything from banks, especially with matters concerning your business. So if you’ve had a previous merchant account terminated or one of your businesses has gone bankrupt, you need to be honest about them and prepare to answer questions from the bank you’re applying for. Although these situations may be red flags for some banks, that doesn’t necessarily mean that you won’t be approved anymore. You just have to tell the truth rather than having the bank find out that you’re lying.
Complete your paperwork. Before you apply for a merchant account, you need to be ready with all the paperwork that would prove your credibility as a business.
As an adult entertainment business, you will be required to submit a valid, government-issued ID, three months of your recent bank statements, a bank letter, and your Employer Identification Number (EIN) or Social Security Number (SSN).
By having all these documents ready, you can make the process shorter and show banks that you’re really preparing for your application.
If you get approved for a high-risk adult merchant account, you need to make sure that you can keep it for a long time. Avoid chargebacks as much as you can, offer better customer service, be accessible to your customers, and embrace good practices when processing payments.
You may have to deal with more challenges and higher rates as a high-risk merchant, but you can always prove to banks that you’re worthy of their trust.
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