Adult Sex Doll Merchant Account

Merchant Accounts for Adult Sex Doll Businesses

The adult sex toy industry is slated to grow by $9.92 billion from now through 2023, making it an exceptionally successful industry worldwide. Yet despite these numbers, US payment processors are reluctant to accept merchant accounts for adult sex dolls businesses. Typically, adult sex dolls merchant accounts are denied payment processing services, no matter how successful they are.

If you own or manage an adult sex dolls business and you’ve been denied by a gateway payment company, you’re not alone. A number of industries — including many that are economically booming worldwide — have a next-to-impossible time trying to get payment processing services. Banks and credit card companies have designated these industries as “high-risk,” for reasons that often have little or nothing to do with how much revenue they bring in.

Fortunately, you can get the help you need for your high-risk business, thanks to Zenti. Zenti specializes in providing merchant account services — including credit card processing, mobile app, e-check, and online payment options—for businesses in high-risk industries. In addition, Zenti offers payment and tracking tools, automated billing and invoicing, and a variety of payment processing solutions to streamline your business, increase your profits, and boost revenues.

Which industries are “high-risk”?

Here’s a partial list of these so-called “high-risk” industries:

Adult sex dolls, sex toys, and novelties
Adult entertainment venues and services
Adult websites
Subscription billing
Cannabis
Nutraceutical products
Online dating
Fantasy sports
Property management
Travel and tourism
Guns and ammunition
Independent health and beauty
Pay-day lending
Pawnshops
Online gambling
Collectibles/antiques

Exactly why are adult sex dolls and toys on this list? There are a number of factors, but the primary culprit is chargebacks.

How Chargebacks Impact Your Reputation

Chargebacks refer to the refunds issued to credit cardholders. Customers typically request chargebacks because they’re not satisfied with a product or service, or because something wasn’t delivered or arrived damaged. Every business has to deal with these, and for most industries, the chargeback rate hovers around one percent.

However, some industries suffer an inordinately high number of chargebacks, and the adult entertainment industry is among them — which impacts merchant accounts for adult sex dolls businesses. And specifically for the adult industry, one reason for this is “friendly fraud.”

Friendly fraud

“Friendly fraud” refers to chargebacks that occur when customers authorize a charge, and then later claim that the charge was unauthorized and ask for their money back. This often happens because customers simply changed their minds about a product, but it can also happen when customers feel pressured to revoke a charge. With adult realistic sex dolls and other sex products, a customer’s spouse, significant other, or employer might accidentally discover the purchase, thereby pressuring the customer into denying it and claiming it as a fraudulent charge. Statistics indicate that, by 2023, one in every ten chargebacks will involve friendly fraud.

“Friendly fraud” chargebacks usually don’t involve malicious intent, but the adult entertainment industry is also prone to a higher level of criminal activity, which includes fraudulent chargebacks as well.

Chargebacks are a major headache for merchants, banks, and payment processors because they can cut into profits and impact revenues. And for certain industries, including the adult entertainment industry, high chargeback ratios prevent companies from being able to offer basic credit card processing services. As you’ll read below, Zenti offers a variety of tools that can help businesses decrease this ratio, even in the high-risk adult novelty business.

In addition to chargebacks, other high-risk behaviors involve remote charges, cybersecurity problems, and regulatory issues.

Card-not-present transactions

“Card-not-present” (CNP) transactions refer to credit card transactions conducted online or over the phone, where the credit card isn’t physically swiped. Instead, the numbers are typed in manually or processed automatically. CNP transactions present a higher risk to financial institutions because they lack any personal verification of the credit card. Approximately 45 percent of all credit card fraud cases in the US involve a CNP transaction.

Cybersecurity

It’s an unfortunate fact that the adult entertainment industry has long been associated with higher levels of crime, including cybercrime. Adult websites and merchandise sites for adult sex dolls and toys are particularly vulnerable to hacks and security breaches. One reason for this is the “underground” nature of the adult industry. While most vendors are honest and reputable, the industry has its share of bad actors, in the form of dishonest merchants. Cybercriminals know this, and bank on their crimes not getting reported to the authorities.

For gateway payment processors, however, this necessitates adding extra levels of cybersecurity for these sites, which is time-consuming and can cut into profits. And even with heightened security, the risk is still there — which is why many payment processors won’t work with adult sex dolls merchant accounts.

Regulatory issues

Certain industries, including those involving cannabis, e-cigarettes, love dolls, and adult toys and products, are more highly regulated and have age requirements for their usage. By agreeing to work with these industries, a payment processor has to follow a number of state and federal regulations — and this involves extra time-consuming (and costly) due diligence work. Even if your doll business is high-end and successful, the amount of work involved for compliance might make credit card processors shy away from working with you.

Social stigmas

Some financial institutions still consider adult entertainment to be an “underground” industry, stigmatized by society as having a shady reputation. This same attitude affects a number of lucrative industries, including cannabis. Because of this, these financial organizations don’t want to associate themselves with an industry that, in their opinion, might reflect badly on their own reputation. Fortunately, as the 21st century progresses, this attitude is beginning to wane, but it’s still prevalent among many financial companies.

As you can see, when it comes to merchant account payment processing, everything is ruled by financial companies. And more specifically, it’s dictated by underwriting.

Underwriting and payment processing

“Underwriting” is simply another term for financial backing. When you take out a loan from the bank, it is underwritten by the bank, and by the financiers who provide financial backing to that bank. In much the same way, financial organizations underwrite payment processing companies. If a merchant account falls under the high-risk category, then a payment processing company might risk jeopardizing its financial underwriting by taking that account. Since merchant accounts for adult sex dolls fall under the high-risk category, they’re typically denied payment processing services.

Likewise, if you own an adult sex dolls company, you might have applied for Paypal, Stripe, or Square, and initially gotten approval — only to see your account immediately canceled during your first credit card transaction. Once automated payment processors discover your industry, many of them will drop your account with no warning.

Even if you’ve experienced multiple denials, the good news is that you actually can get merchant account processing approval. But to get approved, you’ll have to follow a number of steps — and the best way to get approval is to get help from a high-risk merchant account specialist like Zenti. Zenti offers a full roster of payment processing services for adult sex dolls merchant accounts, plus valuable tracking, invoicing, and security tools so you won’t have to spend your valuable time doing bookkeeping or tracking down payments.

Perks of merchant account processing services

Is it really worthwhile having payment processing services? The answer is a resounding yes. Statistics show that customers prefer credit cards above all other types of payment, especially for retail purchases. Here’s how it can benefit your adult sex dolls business to offer automated payment options:

Automated payment options

For many consumers, there’s nothing more convenient than using a credit card. And with a credit card processing account, you’ll also be able to provide options for e-check, debit card, and mobile app payments. In addition, you’ll also be able to take a variety of different currencies via automated payments, which means that you can even sell globally if you wish.

Payment tracking

Tracking payments can be tedious and time-consuming; but a payment processor will automatically track your payments, from the point of sale until the payment is processed and in your bank.

Invoicing and billing tools

A payment processing account gives you the tools you need to send automated bills and invoices, eliminating time-consuming bank statements, paperwork, and bookkeeping.

Secure payments

If you’ve ever dealt with bad checks, you know what a headache it is to track down customers and try to get payment. With automated payments, including e-check processing, you’ll never have to run the risk of bad checks again. Plus, automated payments are processed through a secure server with state-of-the-art security protocols and encryption.

Competition and professionalism

The adult sex dolls industry is growing more and more competitive, with companies developing more realistic models each year. With the emergence of lifelike silicone dolls and high-tech models, you have to be on the cutting edge of your industry. Toward this end, in order to retain customer loyalty and grow your business, it’s essential to provide a streamlined experience for your customers, as well as maintain a professional image. If you can’t take basic automated payments, it could make your company look less professional, and even less reputable, especially when compared to your larger competitors. By providing a full roster of automated payment options, you’ll show that you can compete with anyone, including larger corporate chain stores.

Tips for getting payment processing approval

First and foremost, it’s crucial to get help from a high-risk payment gateway specialist. A specialist can provide a shortcut through the approval process, even if you’ve been denied multiple times. In addition, you can streamline the process by following these simple steps:

Keep your paperwork: Payment processing companies often request bank statements going back for at least half a year, plus tax returns going back several years.
Try to save some cash: A healthy bank account is a plus when applying for gateway payment services.

There’s one more vital tip, and it has to do with our old friend chargebacks…

Reducing chargebacks

Decreasing your chargeback rate can not only help you get approval but also boost your profits. For the adult sex doll industry, here are two specific strategies:

Provide full disclosure on products and policies: Adult sex dolls, like lingerie, are often not returnable. Be sure to give full and accurate descriptions of your products, so customers know exactly what they’re paying for. Also, be clear about your return policies.
Use discretion in billing: If your company name reflects your association with the adult entertainment industry, use another, more discreet name in billing and invoices. This ensures your customers’ privacy. Likewise, it lessens the number of friendly fraud chargebacks that occur when customers’ purchases are accidentally discovered by other people.

Zenti offers a variety of tools that can help you decrease these damaging chargebacks. They include Address Verification Service (which automatically checks for matching billing addresses in a transaction), credit card security code monitoring, and 3-D Secure Protocol, which validates identity across different devices.

Choosing the best high-risk payment processing company

In recent years, a number of high-risk payment processing specialists have entered the market. Some specialize in specific industries, such as cannabis or e-cigarettes, while others might provide only a limited number of payment processing options.

Before you choose a high-risk payment processing specialist, it’s crucial to find out whether or not they work with merchant accounts in your industry. And even if they do, they might not work with your specific type of business. For example, some companies may work with adult entertainment venues, but they might not accept adult sex dolls merchant accounts. Also, make sure they offer a full roster of payment processing options for your customers. For example, Zenti offers a comprehensive package of merchant services that includes all types of payment processing for online stores, including credit card payments, e-checks, and mobile apps.

Here’s what to look for in a high-risk merchant account specialist:

Fair prices and full disclosure

Invariably, high-risk merchant account companies charge higher fees, because they’re taking a higher financial risk. These fees should be reasonable, however. If the fees seem ridiculously high or are much higher than those of similar companies, view this as a red flag. Additionally, a reputable merchant account specialist will provide full disclosure on all fees, so you’ll know exactly what you’re paying, and why.

As a service provider for high-risk businesses, Zenti offers affordable prices for adult merchant accounts, no matter what your business type may be.

Also, Zenti charges the exact same fees for every credit card, whether it’s Mastercard, VISA, Discover, or American Express. If a company charges different rates for different cards, you probably should look somewhere else.

Multiple payment options for your customers

Some high-risk merchant account companies offer limited payment options. A good high-risk payment processor should offer a wide range of payment methods, enabling you to provide a variety of automated payment methods to your customers, including credit cards, e-checks, debit cards, and mobile app payments.

In addition to a full roster of payment processing options, Zenti also offers high-risk credit card processing tools that accept and process transactions online in a secure, streamlined manner. Plus, we integrate with a vast 99.99% of payment gateways globally.

Secure servers

A top-notch merchant account company will use secure servers, with next-gen cybersecurity protections and encryption so there’s no risk to you or your customers.

How Zenti Can Help Your High-Risk Business

No matter what your payment processing history has been, if you’re ready to take your adult sex dolls business to the next level, Zenti can help. Zenti is the #1 payment processing specialist for all types of adult businesses, including adult sex dolls stores, adult websites, cam sites, sex toy/novelty sites, dating apps, strip clubs, lingerie e-commerce sites, and gentlemen's clubs. In fact, we’re one of the first payment processing specialists to work with the adult entertainment industry. And when it comes to merchant accounts for adult sex dolls businesses, we’ve had years of experience working with the adult industry, so we understand the financial services that are essential for adult entertainment merchants of all kinds.