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Credit Card Processing for Adult Websites - October 2010

Discussion in 'Payment Processing' started by Mui2000, Oct 22, 2010.

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Was this information helpful to you adult business?

  1. yes

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  2. a little

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  3. No

    100.0%
  1. #1
    I have written extensively about my 1st. hand experiences with several 3rd Party merchant processors over the years on digital point. Look for my posts and you can get all the details as to who not to deal with.

    Things really started going down hill for adult processors in the 90s when the Visa MasterCard Credit Card processors association started issuing fines for charge backs and underwriters (Banks) followed suit with there own fees.

    For every charge back the association charges $30 -$50 per charge back if your charge back rate is under 2% and the fines get even higher if your charge back rate is over 2%.

    The underwriter (The Bank that pays you every week / month) also imposes there own fines of $10 - $20. If you are processing with a 3rd party processor they will also impose a fine. At one time I was paying 100 Euros for every charge back in addition to loosing the revenue from the Sale. This was my experience with www.multicards.com).

    In order to survive in the adult industry it is important to understand why it is so difficult to process and not pay extremely high fees. The 5% - 6% (commonly advertised) is just a teaser rate. In actuality if you are processing with a third party processor you will only receive 50% of your sales in the first 6 months and about 60% of all your sales in the life time of your account. So you must be asking where all the money is going to. Here is where it goes:

    1. 5% - 7% in processing fees.
    2. $50 - $150 in charge back fees plus the revenue from the sale. (For each sale)
    3. 10% in escrows that you will probably never see as many companies fold up before its time to release escrows or hold your money for years. Don’t believe the 6 months lie. I had to sue 2 companies for holding $59,000 in escrow past the 6 months and the lawyers got 10%.
    4. Wire transfer fees $30 -$45 plus your bank may charge you additional fees for receiving the wire $10 -$20
    5. Refunds and remember you still pay fines and fees for refunds.

    This is a crazy business. You literally loss money left and right. It’s worse than highway robbery. And it’s perfectly legal.

    I finally found a way to tackle this hideous problem. I now own 15 merchant accounts and I manage each one with my staff. I make sure that each merchant account stays below 0.5% in charge backs and once it exceeds this figure I stop using it and remove it from my shopping cart. The cost is quite high operating so many merchant accounts but the fees are much lower than what I have described above. I now bank 90% of all sales and my money is funded to my bank in a few days of each sale, unlike waited months for your money with 3rd party processors. There are a lot of secrets to acquiring so many merchant accounts, so I do not want to get into too many details right know about how I did it. I am sure if you sit down and think real hard you will figure it out. (Its not Calculus).

    The biggest secret is Never Telling the bank that you are selling Adult products or services, because they will turn you down.(Banks consider this industry too risky and they will not touch it). As long as you tell them you are selling other goods and services you will enjoy a rate of 1% to 2.5% or less. Now that you know the biggest secret to success in the Adult Industry; the rest will be a piece of cake.

    Good luck to you.

    MUI2000:cool:
     
    Mui2000, Oct 22, 2010 IP