If your business sells adult-oriented products and services or adult entertainment in Europe, and you’re looking for ways to offer diverse payment methods to your European customers, an adult payment gateway is a must, in addition to a high-risk merchant account.
A payment gateway is a client-facing type of software supplied by payment service providers, which enables merchants to verify credit and debit cards or other types of online payment methods in a safe and secure way. In an online store, this is the section where a customer is asked to select a payment method (credit or debit card, e-wallet, or other) and enter the payment information.
An adult payment gateway is categorised as a high-risk payment gateway due to the legal age restrictions and inherent financial and reputational risks the industry can pose to merchant acquiring banks and payment service providers. The vast majority of them won’t accept such businesses as clients due to the preset organisational policies, in spite of the high volume of transactions.
Your business is part of the adult industry if you sell the following products and services:
- Adult film distribution and online streaming
- Online dating
- Pole/lap dancing clubs
- Webcams and live accounts
- Adult toys
- Escort services
- Adult saunas
- Sensual messaging
If any of these businesses intend to offer online payment methods, an adult payment gateway isn’t just nice to have. It’s literally mandatory in order to implement the following functions:
- Collect customers’ payment details
- Encrypt customers’ payment data
- Determine which card association has issued the bank card
- Send the transaction data for payment validation
- Send the transaction data to the payment switch
- Either decline or approve payment transaction
- Protect the business from fraud and chargebacks
- Securely save payment data for future purchases
How the payment authorisation process usually works:
- A customer selects a payment method and enters their payment details at the payment gateway of an online store
- The payment gateway validates the customer’s data, as well as verifies the availability of the customer’s funds
- The payment gateway encrypts the customer’s data and sends it to the payment processor of a merchant acquiring bank
- The merchant acquiring bank sends the information to the customer’s card association to approve the transaction
- The customer’s card association either authorises or rejects the transaction and sends this data back to the merchant acquiring bank
- The merchant acquiring bank sends the payment authorisation data to the payment gateway
- If the payment is approved, it gets transferred to the merchant’s bank account by the merchant acquiring bank
Adult Payment Gateway Providers in Europe
All European payment service providers are regulated by the Payment Services Directive (PSD), the purpose of which is to encourage competition and enhance safety within the digital payments market. Moreover, every payment service provider operating in Europe must be fully licensed by relevant state authorities, which means your adult business will be in safe hands. If you’re not sure about the intricacies of European legislation, feel free to seek a personalised consultation with our legal experts here at Regulated United Europe.
The following adult payment gateway providers are available in Europe:
- Verotel (HQ in the Netherlands, offering high-risk payment gateways at competitive prices since 1998)
- PaymentCloud (HQ in the US, offering cutting-edge, PCI-compliant payment software)
- Axcess Merchant Services (HQ in the UK, offering the highest compliance level gateways and other payment services)
- Instabill (HQ in the US, serving global clients by offering high-risk payment gateway software with multicurrency support)
- ccNetPay (HQ in the UK, offering payment services to a wide range of adult businesses in Europe)
Requirements for Adult Businesses
To be considered by a payment service provider, you are generally required to have a fully registered legal business, open a high-risk merchant account and prepare a set of documents.
In case you can’t or don’t want to set up a high-risk merchant account, choose a sub-merchant payment aggregator, or a third-party payment processor, instead. Its function is to enable businesses to accept credit and debit cards as well as other digital payment methods without having to set up a merchant account.
Documents required to obtain an adult payment gateway:
- Incorporation documents or other business documents
- Proof of registered business address where your business operations are carried out
- A business plan that includes a description of your products or services and the intentional use of the payment gateway
- Proof of identity of every individual with managerial control of the business
- A tax form issued by the tax authorities of the country where your business is registered
- Suppliers agreement if you sell tangible adult products
- Corporate bank account details, including bank statements from the previous few months
- The company’s statement of profit and loss if available
- Financial statements (3-6 previous months)
- Records of previous processing history if available
- Proof of identity of the company’s shareholders and directors
- Proof of residential address of the company’s shareholders and directors
In addition to the required documents, you have to make sure that your website is compliant and prepared to accept secure payments. For instance, the sections of terms and privacy policy must be drafted and published on your adult business website accordingly.
How to Choose an Adult Payment Gateway
Such high-risk payment gateways as adult payment gateways usually come with high fees. On the other hand, they offer higher security, which will prevent your business from fraudulent activities and high volumes of chargebacks. To ensure your business gets all the benefits you pay for, take the time to research adult payment gateway providers by looking at the most critical aspects.
Things to take into account before choosing an adult payment gateway provider:
Define your business needs and determine your customers’ payment preferences
Understand what regulatory environment your selected adult payment gateway providers must operate in and also how they keep their clients compliant
Look up and compare fully licensed high-risk gateway providers who ideally have experience in serving adult businesses
Send your company information and a service request to the sales teams of the providers to determine their pricing and exact requirements
When your application is approved, you’ll receive a test payment gateway ID which will have to be integrated into your business website
The payment gateway goes live after the test and the full integration into your website
To submit an initial application, you will be asked to provide only such basic information as the name of the owner, company name, business email, telephone number and website address, specify regions and countries of operation as well as describe your products or services. Processing history may also be required.
If you’re ready to grow your adult business in Europe by offering more customer-friendly payment methods, our team here at Regulated United Europe will be delighted to assist you. We have eight years of experience in helping clients to obtain adult payment gateways for European markets. We tap into our vast network of trusted partners in the European financial services industry to offer the most suitable and cost-effective solutions that improve the functioning of the companies we serve.
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