Only a decade ago online dating could be painted with derision, and often mentioned in scornful tones. Now, the number of people dating online has exploded and online dating has become mainstream.

Seven million residents in the U.K. and 15% of U.S. adults sought love — or at least companionship — online in 2016. Many adults find that online dating services reduce the guesswork associated with meeting people and dating.


Many free sites exist today, and others charge periodic fees, often following a free trial of short duration.

That’s the focus of this blog post: online dating merchants offering fee-for-service dating sites. Business owners in that sector become familiar with being treated with the payments industry equivalent of derision. They’re classified as high-risk merchants.

High Risk Online Dating Merchants Face Unique Challenges

Banks and other service providers often classify these businesses as high risk. Two main reasons explain it: high chargebacks and transaction laundering.

  • A high chargeback rate occurs when too many customers aren’t happy with results — e.g., not enough suitors. Dissatisfied consumers file chargebacks with their credit card issuers, saying the online dating merchant failed to deliver its service.
  • Underwriters sometimes discover that an online dating website is a front for a different business entirely… fraudulent transaction laundering for an escort service or perhaps prostitution.

These issues raise red flags with acquiring bank risk management professionals, making it difficult to be approved for a merchant account. Without a merchant account, online businesses can’t accept payment cards for products or services. No payments, no business.

Other challenges faced by online dating merchants include the dilemma of needing a banking relationship to operate, yet not being able to establish one. Banks want to see records of a healthy business. To satisfy that reasonable request the business has to be operational.

What Acquiring Banks Want

If you apply for a personal loan or mortgage, you’d expect your financial life to be scrutinized. It’s much the same for business owners when they apply for a merchant account. Your business life will be analyzed and dissected.

It helps to put in place the important business practices banks want to see. Use these tips:

  1. A robust and complete business plan. A professional business plan helps establish credibility. Be sure to include key sections including an analysis of the online dating industry and competition; a revenue model; sales and marketing plan; key business processes; and expected return on investment (ROI).
  2. A healthy processing history. A track record of at least six months of operations is best. Good records are needed, and all facets of the business will be explored. Ideally, processing results tie to the business plan.
  3. Strong financials. A healthy balance in a business bank account is important. Funds may be self-generated or the proceeds of a loan, if you qualify for one. When a merchant is considered high risk, it’s difficult — if not impossible — to be approved for bank funding.
  4. Professional operating controls: A strong business includes key recurring processes and internal controls systems. They should address financials, inventory (when relevant), security (think PCI compliance), and ongoing management reporting. Provide evidence that the Key Business Processes outlined in the business plan are operating well.
  5. Low Chargeback rate. All merchants will incur some chargebacks, but to develop (and protect) your healthy processing history as required by a merchant bank, your chargeback rate must be low (under 3%). There’s a clear link between this requirement and good business processes which should include:
    1. Excellent customer communication… Be sure the website sign-up form requires a valid e-mail address. A positive validation before the service becomes operational is a good idea.
    2. Send email confirmations when a new customer signs up for the service, and clearly explain recurring charges: include the frequency and amount.
    3. Many sites offer add-ons like “hugs” and “bouquets of flowers” customers can send to each other. Send an electronic receipt each time an optional add-on is purchased.
    4. Service cancellations should be easy for the user, and be followed up with an email confirming cancellation.
    5. Make sure your billing descriptor is recognizable. Use your business name.
    6. Have a robust, recurring process to screen your payment gateway for fraudulent transactions.

Help is Available with the Right Merchant Account Provider

Challenges abound when running an online dating site. With very clear terms and conditions, and excellent customer service, online dating merchants can avoid experiencing many of the issues discussed.

One of the best solutions to dilemmas facing this sector is working with the right merchant account provider.

Partnering with an experienced global merchant account provider will ensure your online dating business finds its ideal match: the perfect payments processor.