The Business of Love: Maximize Profitability for Dating Coaching Businesses with Easy Payment Services
Jul 30, 2021 2 minute Read
Finding true love, seeking connections, boredom – no matter the reason, dating apps and online dating coaching businesses are on the up and up. The convenience and advancements of technology as well as the unfortunate loneliness of being stuck at home during the pandemic triggered an economic boom for the dating market.
Making a profit as an online dating coach or off an up-and-coming hook-up app is potentially one of the trickier parts of working in the business of love. Thankfully, merchant accounts like those provided by DirectPayNet give you a solid leap forward towards accepting payments and making a profit.
You may be wondering, “but online dating coaches are high-risk, so how can I accept payments?” Not to worry, high-risk merchant accounts have you covered and we’re here to show you how.
The Differences in Perception of the Services Dating Coaching Businesses Offer
We’re not necessarily talking about consumer perception—everyone has their own opinion of how helpful a dating coach or app can be. Rather, we’re talking about the perception banks and payment processors have on coaching businesses versus consumer demand. To fully understand, we need to first outline what services dating coaches offer.
What is a dating coach?
The essence of an online coaching business, including relationship and life coaches, is advice: personal development that leads to healthy relationships.
Online coaches work remotely using video conferencing and chat tools like Zoom, Skype, and even WhatsApp to meet with clients, learn their behaviors, and train them to be more confident and attractive. While it’s possible to meet face-to-face via these apps, many customers see their coaches just one time and leave the rest to text. This can help with the offline aspect of virtually coaching clients and follow-ups.
In fact, many people who use online dating coaches see results in other aspects of their life like work, home, friends, travel, etc. However, much of the impact is on improving the client’s position in the dating scene (otherwise you would be considered a subcategory of life coaching).
How has the coaching industry changed recently?
Because of society’s reliance on technology, even the coaching industry has moved towards a digital future. In 2019, the estimated market size was $15 billion with a projection to reach $20 billion in 2022. The average yearly growth rate rests around 6.7%, meaning there’s no better time to enhance your coaching business offerings and payment solutions than right now.
Coaches for dating are still more about developing attractive personal traits, the client’s own confidence, and self-esteem to make them as attractive as possible. It’s more an alignment of personal vision to reality in a dating sense. Recently, that service has grown to include dating profile management. Things like advising which photos to use, which order to put them in, and what you should talk about in your profile are now under the dating coach umbrella. They will even take it a step further and monitor dating app profiles and website accounts to accept matches and weed out the ones that don’t fit on behalf of their client. It’s akin to Tinder or Bumble without the algorithm and automation. If these services aren’t within your own dating service offerings, then you should seriously look into it to help expand your business even further.
What about market demand for online dating coaching services?
The same report from the link above states that niche coaching businesses will see more growth and opportunity than generalized coaches. Dating coaches fall into a niche category, therefore growth and potential for any dating coaching business is high.
Part of the reason online coaching is becoming popular is because of our further progression towards digitization and the stay-at-home orders due to the pandemic. But a significant part is due to market demand; consumers want online coaching services.
Social media is a highly useful and valued asset to the online coaching industry as a tool to keep in touch with current clients as well as attract new clients. The evidence is clear that consumers want to interact digitally with their coach. And who can blame them—who doesn’t want a personal dating coach in their pocket?
How do banks and payment processors view the dating coaching industry?
Hopefully the increase in demand helps move acquiring banks and credit card processors towards accepting the coaching industry as a low-risk norm. Right now, that isn’t the case. Dating coaches are high-risk, as with any online business that’s related to health or advice.
Gaining a secure payment gateway to allow your customers a seamless checkout experience for a high-risk business can be difficult, but there’s always a way.
Reasons Your Dating Business Is Considered High Risk
Before getting into the details, the general idea behind the high-risk label is due to the high amount of risk a bank or processor thinks your business will put on them. They don’t want to lose money and they’re afraid your business will make that happen. Sometimes that’s due to unfortunate industry characteristics, other times it’s due to antiquated policies (which we hope get updated at some point in the near future).
The coaching industry is unregulated.
Because coaching businesses are unregulated, there is no guarantee for quality assurance. There are no official requirements to have professional credentials, but clients are beginning to request them more often. Still, because of the lack of official regulation for the industry, it’s considered high-risk.
Lawsuits, refund requests, chargebacks, and negative reputations effect the bank as much as your business. Payment providers don’t want companies who have too many bad reviews to use their service because it doesn’t invoke much confidence that the company will make the provider money.
Coaching businesses run on giving advice.
Advice is great, but it’s not a substance. You cannot hold advice the way you can hold a phone or a bag. The coaching industry runs on giving abstract advice which banks mark as a hard “high-risk”. And if you’re thinking, “but I also manage my clients’ profiles”, then they’ll like place you in another high-risk category: digital services. Again, nothing is concrete here; your services are entirely digital or advice-based.
The chargeback ratio, fraud, and number of negative reviews are too high.
Chargebacks are a customer’s direct request to their bank for a refund. If a customer doesn’t feel that they’ve received enough from your service, it didn’t live up to their expectations, or the outcome wasn’t what they wanted, then they want their money back. Instead of contacting you or your customer support team, they contact the bank and get their money right back.
There are many ways to manage chargebacks for your dating coaching business, and a good merchant account provider will include some level of chargeback protection. The same goes for fraud. Negative reviews are something you should handle with grace by responding politely and requesting that person contact your support team.
Industry-wide, all three items (chargebacks, fraud, and negative reviews) are just too high to build confidence for banks to openly offer payment gateways for your site.
Ways to Secure a Payment Provider for Your Coaching Business
Online dating coaching businesses are booming right now, which means there’s definitely a way to get a payment gateway up and running on your site. At this point, you likely already have a credit card processor for your service but maybe you’re tiptoeing around what to do next and it’s harming your growth.
Use third-party credit card processors initially and as a backup.
The easiest way to get going—and maybe this is the method you’ve already chosen—is to use services like Stripe, Square, PayPal accounts, or Shopify Payments. This is NOT a permanent solution as there are limitations to what these services allow and failing to follow those rules can lead to withheld funds or account termination.
Get in touch with high-risk merchant account providers.
While you’re using those 3rd-party aggregators, you should be contacting high-risk merchant account providers. We are designed to assist with businesses like yours, using connections with banks to give you a merchant account that works without worry. We may even be able to negotiate down some of the pricing, but the major concern is obtaining one for now.
You’ll want to prepare a few items, like bank statements, payment plans for coaching services, and pricing for coaching packages as well as a few other things you can check here.
Renegotiate or shop around for alternative merchant accounts.
Because you’re a high-risk merchant, you might be subject to chargeback reserves. If this happens, talk with your account provider after a few months (6 months is a good amount of time) about negotiating reserve caps or repayment from the bank.
Your initial merchant account might not come with as many features as you’d like. Your base should include at least debit card and credit card payment processing. This is a good time to shop around for a new account. You’re allowed to hold more than one merchant account for the same business. Once you find one that has attractive pricing and features, go ahead and apply for it. You can always keep the one you’ve been using as an even better backup than 3rd-party providers.
By the time you’re ready to renegotiate or apply for a new account, you’ll have built up a solid archive of bank account statements that display positive online payment history and a low chargeback ratio. This will make your business more attractive for new providers. And a new provider could include a CRM to help you with client management, client payments, and streamline your business in an organizational sense. Or plugins and APIs that link directly into QuickBooks for easier invoicing.
Grow Your Dating Coaching Business with Fully Featured High-risk Merchant Services from DirectPayNet
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