Fetish site owners are seeing more interest from online users, but getting approved to process payments isn’t going as well.
Recent headlines would indicate fetish sites are attracting more enthusiasts because of the pandemic. Obviously, popular culture books and movies blew the door wide open on this community years before. This is a good thing, right?
Well unfortunately, fetish dating sites and apps, online porn streaming, video conferencing and adult web cams are some of the channels facing uphill battles with payment providers. Community members falling under the category of kink, BDSM and other more adult titles want to transact online. But getting banks to approve those orders is what’s at stake.
In this blog we’ll discuss why COVID-19 is making it harder for high-risk merchants. We’ll also offer some strategies to navigate this.
Why is it so hard to get my fetish site approved for payments?
Payment providers aren’t afraid of dominatrix videos, sexual fetish communities or apps similar to Tinder. Right now the biggest roadblock for fetish site owners is chargeback risk. COVID-19 has put priorities into perspective for a lot of consumers. Many no longer have the type of disposable income they used to. Those who are really strapped for cash aren’t spending as much. They’re also not in a hurry to sign up to adult friend finder or other adult dating sites when they can’t even meet another person without the risk of catching a virus.
You’ve probably read that porn sites and cam sites burst open in online sign-ups and streams. That’s because it’s video and not a fetish dating website encouraging in-person role play.
As you clearly know fetish activity involves many interests including fetish dating sites, foot fetish services, BDSM dating and chat rooms. Right now, streaming services and online chats are fairing better than fetish sites that facilitate in-person meetings for things like threesomes. Obviously because of the pandemic, enthusiasts that would normally like spanking or any contact with any body parts cannot do so. In that case, try pivoting toward kink that can be strictly done through live webcams. Kinksters can still enjoy live webcams, video, movies and other virtual activity sessions. If you can afford to make the shift with proper security in place, do so now.
Getting approved for recurring payments was tough before the pandemic. Today, it’s even harder. The number one reason? Chargeback fraud. Acquiring banks and other payment providers are facing a lot of liability issues. This is due to the high volume of online customers issuing chargebacks during the first wave of the pandemic. This activity put Visa and Mastercard on notice.
Ultimately payment service providers and facilitators don’t want to be on the hook for an enormous number of chargebacks and refunds. So how does this affect fetish site owners with memberships? Well, let’s just say it isn’t a cinch getting approved for even a high-risk merchant account anymore.
Fetish and sex cam site owners that already have or are accumulating high chargeback ratios must apply serious anti-fraud measures as quickly as possible. If you’re like many merchants doing rebills or subscriptions, this is a good time to either use the straight-sale model or sell prepaid packages for minutes to be used. This is just one way to help in reducing risk to your processing account.
Payment processors are not above threatening closure of merchant accounts if they see fraud levels going out of control. Also, with fraud being at an all-time high, lost or stolen credit cards are included in this mix. So what must you do to ensure your merchant account application isn’t declined?
In the worst case scenario, merchants should explore EMV 3DS – this is like adding 2-factor authentication to your transactions. It will help minimize chargeback fraud. While it’s not a 100% full-proof measure to prevent chargebacks from happening, it does leave more consumers accountable for their transactions. They can no longer claim they were not present for the transaction or that their CVV was not present. That’s because the EMV 3DS has additional authentication points during a transaction proving the card holder definitely was present. It also proves verified information was used during the purchase. So, we highly recommend using this as a fraud prevention tool.
Collect more data to fight chargebacks
The one thing we see often with membership merchants is their unwillingness to fight chargebacks. They give up very easily in order to avoid fees. Disputing these incidents is necessary, because it shows the card networks, you’re actively engaged in consumer transactions. Clearly if someone agreed to buy your services, they knew exactly what they were doing and you need to prove that with as much evidence as possible.
Therefore, here are some recommendations on how to protect yourself and even curb the chargeback fraud from happening in the first place.
1. Use velocity checks and anti-fraud software
Your payment gateway has several tools you can use at your disposal to limit the number of transactions or dollar amount a customer can spend on your site. Establish logical limits to avoid letting in obvious fraud. Other tools such as transaction scoring software can help establish measures to prevent fraud transactions from happening in the first place.
2. Use double opt-in
Some online dating, fetish lover and sex cam sites make the mistake of just letting kinky users sign up without verifying emails or permissions. Use double opt-in to ensure customers confirm access to their account via email. They should be either clicking on a confirmation button that you track, or keying a PIN for 2-step verification.
3. Log fetishists activities
If you run a social network for like-minded people in the pegging community or offer a fetish porn website, it’s likely you require users to log in. If that’s the case make sure you keep a log of all activity even if 2-step verification was used. This will show the user logged into their account and consumed content during the period for which they issued a chargeback.
All members in the payments industry know that when a spike in internet usage occurs so does the prevalence of scammers. So the above suggestions should help in preventing that.
So say you want to proceed with applying for a merchant account? What should you do to have an easier approval? Take the following steps.
Arm yourself with processing history
Right now, money talks. If your kinky dating or sex cam website happens to be doing well, great. Now you need to show that in numbers. Have six months of processing history for your business. If you need to process up to $50,000, then show processing at that level each month or close to that threshold.
Prove your business is low risk
When you show your processing history for August 2020, you cannot show chargeback-to-sale amounts at say 5.5% and expect an acquiring bank to look the other way. These numbers matter big time. So, work on lowering those rates to at least 1% for two or three consecutive months. If you show chargebacks are slowing down, it will have a much better impression.
Don’t make rebills mandatory
Consider switching from subscription only to a straight-sale and rebill combo. Not everyone wants to subscribe to role-playing content on a monthly basis. So, try giving your visitors the choice. Allow them to pay a one-time fee or sign up for a month-to-month subscription by selecting to opt in themselves. If you really want to reduce risk, try limiting rebills to a three-month or six-month package with an option to renew.
Get all licensing and agreements ready beforehand
Some fetish site owners sell BDSM equipment, or offer licensed movies or other content. Don’t apply for a merchant account empty-handed. Have all supplier, licensing and fulfillment agreements in place. The more time your application for credit card processing is left lingering without all the right paperwork, the more excuses a bank can find to refuse your business. For example, a change in policy that sees them not accepting merchants with recurring transactions any longer.
Refine your website
Don’t make the mistake of applying to be approved for payments to your BDSM fetish community or foot fetish dating site without having a compliant website. Make sure all of the following are in place:
- An age acknowledgement pop-up for new visitors
- A descriptor and support number clearly visible on the order page
- Little to no nudity on the home page unless it’s an actual porn site with appropriate licensing
- Your legal company name, address and phone number included in the footer and on the contact page
- An actual phone number on the home and contact page where customers can reach you for more information
- A valid 2257 page and DMCA notice to ensure you are compliant with all adult entertainment restrictions and laws in the US and Europe
Now, if you’re ready to take the next step and find the right payment solution for your business, let’s talk.
DirectPayNet is specialized in finding unique payment solutions for business models like fetish sites and other adult themes. Ready to go? Email us here.