High Risk Merchant Handbook

What an Adult Merchant Account Really Is

An adult merchant account is not just a high-risk account. It is a registered category at Visa and Mastercard, with rules your acquirer must follow.

An adult merchant account is a card account for a business the card networks call adult content. That label is not a judgment call by your processor. It is a registered category with its own codes, fees and rules. Your acquirer is the bank-side company that signs you. It must follow those rules before your first sale and for as long as you process.

What an adult merchant account is

The account itself works like any merchant account. Money moves from a customer's card to your business. What changes is the label attached to your file.

Visa's manual says MCC 5967 merchants sell adult content and services that customers access via telephone, fax, or the internet. Mastercard's manual covers adult content and services sold at a distance. It names MCCs 5967 and 7841.

That code follows every transaction you send. It tells the networks what you sell.

Why the category is treated as high risk

Visa's program lists Tier 1 card-absent business types. They include Adult Content, Dating and Escort Services, Gambling and Pharmacies. Adult content is on that list, so the extra steps start at the top.

Visa's program says acquirers must be granted High Integrity Risk Acquirer Registration before soliciting, contracting with, or processing for any High Integrity Risk Merchant. So your acquirer has to hold its own approval from Visa before it can even pitch you an account.

Visa's Integrity Risk Program says acquirers need separate and additional approval from Visa for each Tier 1 Merchant category. One approval does not cover them all. An acquirer cleared for gambling is not cleared for adult content too.

What Mastercard requires

Mastercard's manual says an acquirer must identify non-face-to-face adult content transactions using MCC 5967 with TCC T, or MCC 7841 with TCC T.

Mastercard's manual says an acquirer must register a merchant with Mastercard before processing non-face-to-face adult content transactions from that merchant. The merchant must be registered before any sales go through.

During registration, the acquirer must list each website URL these sales may come from. Mastercard's manual says an Acquirer must document all approved URLs from which the Merchant may submit Transactions for processing.

There is a fee. Mastercard's manual says it assesses the Acquirer an annual USD 500 registration fee for each Merchant and Sponsored Merchant under the listed categories. Mastercard charges this fee to your acquirer.

Mastercard's manual says the Acquirer must ensure each such Merchant complies with the fraud control Standards in Chapter 6.

Visa's Integrity Risk Program

Visa runs its own program for these merchants. Visa's rules say adult content purchases under MCC 5967 require the merchant to meet all requirements in the Visa Integrity Risk Program Guide.

Visa's program says an acquirer must check a merchant and vouch for that check before it signs the merchant. The acquirer must also vouch that the merchant passed the review. It must promise to watch for illegal sales.

In plain terms, your acquirer signs its name to a promise about your business.

What underwriting looks like

Visa's standards say acquirers must develop a risk-based underwriting process for onboarding new merchants. Visa also says they must sort merchants into risk groups before onboarding.

Expect these checks, all named in the networks' rules:

  • Visa's standards say acquirers must check the Terminated Merchant File before finalizing a contract with a prospective merchant. Mastercard's manual says an Acquirer must conduct MATCH inquiries under the proper ICA Number. If you have been on that file, say so up front.
  • Visa's standards say acquirers must check more items for online sellers. One is a list of every URL the merchant uses.
  • Visa's standards say acquirers verify that the merchant is the registered owner of its domains and websites.
  • Visa's standards say acquirers must carry out ongoing AML due diligence including sanction, politically exposed persons and derogatory media screening.

None of this is your processor being difficult. Each item is a line in a network rule it must answer for.

Content and marketing rules

Mastercard also has rules on the content itself.

Mastercard's rules say adult content merchants must have written agreements with each content provider that prohibit illegal activity. Mastercard's rules also say content makers must check the ID and age of each person shown. All must be adults.

There is a marketing limit too. Mastercard's rules say adult content merchants must not market content in a way that suggests child exploitation materials or nonconsensual activities.

So your deals with the people who make your content must be in writing. If you have no written agreements with your providers, fix that before you apply.

Life after approval

Approval is not the end of the reviews. Mastercard's manual says the acquirer must ensure each such merchant implements real-time and batch procedures to monitor transactions continually.

Visa's standards say acquirers must review merchants with high dispute rates for deceptive or misleading sales and marketing practices. Visa's standards also say an acquirer must not send sales it knows are illegal. The same goes for sales the merchant should have known were illegal.

Mastercard's manual says an acquirer must notify Mastercard of changes to information it has provided, including changes in law, merchant activities and merchant systems. Add a site, change your setup, and your acquirer has to tell the network.

What not to do

Do not hide what your business sells to get an easier application. Do not split your volume across accounts to stay under a threshold. Do not ask for a friendlier MCC than the one your business fits.

Mastercard also fines acquirers that break its BRAM Rules. Mastercard's manual says an Acquirer in violation of the BRAM Rules may be assessed USD 200,000 with respect to each Merchant.

To learn more, read why banks watch payment processors. Do you sell by phone too? Read how to get billing authorization right.

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