High-risk adult online merchants face challenges in the payments industry that some other merchants do not. Ecommerce sites in general are considered high risk, but even more so when the merchant category code falls into the “adult” category.

Many U.S. banks and processors refuse to do business with merchants selling exotic adult toys or videos. They often equate dating websites with more nefarious illegal businesses — like escort services. There’s no point arguing, the “high risk” label sticks.


Why this is so is a topic for another day. Meanwhile, adult ecommerce merchants face the same general business issues as less exotic ecommerce brethren. Let’s review those issues, and ways to optimize business results in spite of the challenges.

But first let’s review the basics of currency conversion, the relationship to payments processing, and the fees you may incur.

Currency Conversion Basics

Currencies matter to most people, even when they don’t realize it. In order to conduct foreign trade and ecommerce business anywhere in the world, currencies must be exchanged.

For most people, currency conversion rates matter only when they travel. But for ecommerce businesses, currency conversion rates matter for you and your customers every day.

The first currency conversion term to know is “exchange rate.” It always refers to a pair of currencies, for example how many US dollars it takes to buy one British pound.

That pair is written GBP/USD. The first symbol refers to one unit of the currency being purchased. So in our example, to buy one British pound it takes x.x USD, written GBP/USD in the currency markets.

The market price differs from the exchange rate banks offer. Currency exchange houses and banks mark up the price to make a profit. Major credit card brands like Visa and payment aggregators like PayPal do too, and may also charge a fee when currency conversion occurs.

Even when currency conversion is not required, payment card brands charge cross-border fees when a cardholder’s issuing bank country differs from the one in which your business is registered. But there are ways to avoid or reduce them.

Ecommerce Challenges Can Reduce the Bottom Line

One of the first lessons high-risk ecommerce merchants learn: It’s difficult getting a merchant account approved with a domestic bank. Banks and underwriters often don’t understand unique ecommerce business models employed in the digital world.

What banks focus on are the likelihood of high chargeback ratios and the high risk of online fraud plaguing the ecommerce industry.

Retail fraud rose dramatically (11%) in 2016. Online and mobile merchants drove the increase with 9-12% growth in the cost of fraud per dollar of revenue; hence the need to reduce ecommerce fraud.

All of the above cause higher-than-average processing costs when a merchant finally lands a merchant account. Processing rates rise to account for higher perceived business risk.

The world of ecommerce is global by definition. Your customers can reside anywhere that your business model supports, if there’s an Internet connection available.

Which leads to the need for currency conversion. For example, a customer might reside in Japan but your business processes only in U.S. dollars. Enter currency conversion and cross-border transaction fees for you and/or your customers.

All of these challenges increase operating costs and negatively affect your bottom line. But solutions are available.

Optimize Your Payments Process to Maximize Business Results

It may seem counter-intuitive, but your payments process — a necessary cost of doing business online — represents the best way to address many of these issues and maximize your business results.

Optimizing your ecommerce payments process ensures that customers can buy from you in ways they prefer. From offering the right currency conversion options to ensuring your website is mobile friendly, your payments processor should offer success tips.

Adult merchants often turn to offshore merchant accounts for easier approval. Offshore accounts generally provide multi-currency payment capabilities. This helps to avoid currency conversion and cross-border transaction fees that sometimes drive customers away.

robust and secure payment gateway permits the authorization of credit card payments directly from your website. Be sure your payments processor’s gateway is PCI-DSS (Payments Card Industry Data Security Standard) Level 1 compliant. Failing to maintain compliance can result in large fines from major card brands.

Your payment gateway provider should include fraud protection and screening tools within the gateway to protect your business from fraudulent transactions. Examples include quick, secure account verification with AVS and IP Address tools that match the actual cardholder’s location with the location where the card is being used.

A complete layered fraud prevention tool suite enhances business protection. As will a robust, recurring business process to screen your gateway for fraudulent transactions. Website features like requiring strong passwords for recurring customers also help.

Advanced management features like transaction reports, returns and voids capabilities should come standard to help improve business operations by optimizing payments processing. Reduced fraud improves the bottom line by reducing fees.

Currency conversion capabilities help ensure that customers fully understand the cost of a purchase before they make it… helping to lower your chargeback ratio and also reducing chargeback fees.


Choosing the right payments processor can make or break your ecommerce business and help it thrive today and tomorrow. The right processor understands your business model and helps you implement a payments process that meets your specific needs.

From helping you provide the right currency conversion capabilities to protecting your business from outlandish fraud and chargeback levels, the right payments processor will help ensure your adult ecommerce business maximizes business results — now and in the future.