The sex retail industry is one of the most lucrative markets in the world; therefore, it’s no surprise that an adult merchant account is necessary for online sales. But, these days some businesses are experiencing challenges with banks due to revenge porn laws. This applies especially to merchants that distribute racy digital content across the globe.

Getting your own merchant accounts is a must to successfully sell sex toys, dolls, gay underwear, tube and cam content, and much more.  For businesses in Europe, South America, Canada or the US, securing services from an acquiring bank is already likely challenging. Options such as PayPal and Stripe do not accept adult businesses. The introduction of revenge porn laws may make this even harder for legitimate business owners.

This blog post will offer insight into how adult entertainment merchants can be on the right side of the law. We’ll carefully help in rebranding your online image, so it’s less high risk, despite the industry being considered as such. And, our guidance will help you better manage your current or next merchant account.

Sex sells, but at what cost?

Revenge Porn is the new way to digitally (and figuratively) screw someone. It means forbidden and malicious distribution of pornographic images or videos on the internet. With the advent of smartphones acting as web cams, a bitter ex can easily upload private sexual content for all to see. Sadly, this criminal act strongly conflicts with law-abiding adult entertainment companies, because proving which willing participants engaged in adult activities for profit is difficult.

Unfortunately, even though sex sells it will not guarantee a payment processor will work with a business erotic in nature. Banks typically assign adult vendors unique merchant category codes (MCC), mainly 5967, that identify them as a riskier account. High rates of chargebacks and reputational risk constitute reasons why a merchant’s payment provider may flag them.

Revenge porn laws and how they affect merchants

According to the Federal Trade Commission, 38 States in the U.S. now have laws protecting those affected by Revenge Porn. They offer a step-by-step process on how to have it removed, and seek further course of action. According to a Newsweek article in 2016, Germany, France, the Philippines, Scotland, India, Australia and the UK all have implemented more specific laws on the subject.

During the Obama-era, a defunct program called Operation Choke Point pressured banks and payment processors to end their relationships with certain industries. Porn stars and payday loan lenders were among those affected. The initiative represented one of many ways the federal government tried to penalize industries they didn’t like by closing access to digital infrastructure. The specific program was deemed unlawful and unethical. This is precisely why it was ultimately overturned.

Another major world affairs issue is the concern of human sex trafficking. With the SESTA (Stop Enabling Sex Traffickers Act)-FOSTA bill in place, it is an area of utmost importance at a time during revenge porn concerns.

A reputable acquiring bank will ensure high-risk merchants comply with the law, which means your rights are equally protected. Tube sites such as Pornhub.com ensure per their terms of service that all content uploaded have the full consent and necessary paperwork from all parties depicted. Even in the Middle East (which accounts for the biggest share of porn sites) distributors must comply with local regulations to ensure everyone involved has consented.

Therefore, pay attention to your professional reputation, image and credibility. These are all factors for how adult merchants are considered when applying for high-risk merchant services.

How to protect your adult entertainment business

Merchants in this high-risk industry can use strategies in their business so they will be on the right side of the law. Acquiring banks will also look more favorably upon your next merchant account application.

1. Make age verification mandatory. It will make a great first impression for any payment provider reviewing your business!
2. Only work with reputable web developers and designers who only use images or content with participants of legal age.
3. Always have hard copies of signed porn contracts and licensing from content distributors. Businesses applying for adult merchant accounts or ACH processing may need proof of this documentation. European payment providers are known for requesting this paperwork.
4. Ensure you are abiding by Payment Card Industry rules. Having a PCI compliant website entails a few conditions. Make sure you have a secure checkout page, use tools like 3DS2 and take measures to keep credit card data safe. Using security logos will put consumers’ fears of malware to rest.
5. Keep fraud under control! Maintain low chargeback rates. If you’re not sure how, find a payment solutions provider like DirectPayNet who is familiar with the adult entertainment business.
6. Lastly, if you are a US-based erotic digital content business, ensure mandatory 2257 laws are followed and your website disclaimer is clearly visible.

We hope this information gave you some clear insight in how revenge porn laws may impact your adult merchant account.

When you work with DirectPayNet, your high-risk merchant account is in solid hands. Our company has helped several businesses in the adult entertainment industry find secure payment solutions despite having a risky reputation.

Contact DirectPayNet to secure payment solutions for your high-risk business today!