Do sex toys constitute adult services when it comes to card payment processors?

[SweetTease]

I'm about to launch a shop that specialises in adult toys and lingerie. I have been led to believe that my business would fall into the high risk group so i would need a service provider that offers their services to high risk businesses. Also, that I would end up paying more for the service.

After trawling through these forus and finding quite a number of providers that would be able to help, i have spent ages researchingg them all and reading all their online content and what I have found is this... most of them describe the high risk category as 'Adult Services', which I am not a provider of. I have excluded all pharmacy products and similar from my online shop and we don't sell pornography. No downloadable products, no web cams, no services whatsoever, just actual, real life products just like tesco.com or hmv.com, where the customer orders, pays and is then sent the item.

This leads me to think that I do not fall into the category of Adult Services - I'm just the same as any other online retailer surely??

 

[jon1984]

What do you mean by service provider??

 

[AndyP]

The OP is asking about PSP's, payment service providers.

 

[jon1984]

Op????????

 

[AndyP]

OP = Original Poster

 

[Steve2507]

I've been in the industry for over 10 years (www.temptationsdirect.co.uk) and it has always varied.

Some psp's class us as high risk as they really see us a high risk business, others just don't want the shame of having an adult company as a customer.

But if you are new to the industry then you will probably be classed as high risk, then when you have been trading a few years and have a good record you can look at changing out of the high risk.

 

[SweetTease]

Thanks Steve, glad to hear from someone in the same industry.

I'm having trouble understanding why are we classed as high risk though?? I can't see why selling a ***** shaped bit of rubber is any different to selling a CD or a loaf of bread... especially in business terms where our type of industry, ie. sex toys (which does not include web cams, videos and other adult services), is worth approx £250m a year to the UK.

Sex toys are becoming less and less taboo, what with Ann Summers cropping up all over the place, 4,000 Ann Summers parties being held every week, and of course the Fifty Shades phenomenon which has created a massive boost to the industry, isn't it about time things started changing with regards to PSPs etc.

I am probably wasting my time ranting about something that simply isn't going to change any time soon, but I'm feeling really disgruntled about this seeing as I will end up paying more than another online retailer.

 

[SweetTease]

oh, forgot....
Steve, nice site by the way, who have you used and who are you currently using with regards to payment processing? Do you have a MOTO service as well as ecommerce integration? What are your recommendations? I also notice you are accepting PayPal which is another provider that I was led to believe won't allow adult toy sales.

 

[Steve2507]

Thanks for the compliments. Our site uses a pretty bespoke piece of software (now), it started life as an off the shelf but we have added so much customisation that really it is now bespoke (everything techie now done in-house as well).

We are classed as high risk because banks don't want to be associated with us and also site owners perceive the adult industry as easy money (which it isn't), so from a risk point of view there is a greater likelihood of the bank losing money because of the website going under.

If you are new to the industry then whoever you go to will probably want a rolling reserve, but this can be re-negotiated at a later date when you have proved yourself with them. Paypal will accept adult retailers, but they have strict criteria. Also Nochex will take you on and it is worth contacting Barclays.

You have to really think how you are going to manage your stock though. PSP's may not be happy with dropshipping and so you may need a stockholding.

 

[dx3webs]

It is pretty random.. we have been left scratching our heads wondering why some clients are not accepted and at other times surprised that others are accepted. Guess they have some kind of risk management profiler working on these decisions.

 

[PayPoint net]

As mentioned by Steve above, some UK banks view it more as a reputational risk as there are certain sectors that they will be reluctant to work with than others. European acquiring banks can be more flexible to the types of business they accept so it may be worth approaching one of them especially if you have some PayPal processing behind you. As your volumes grow you may find it easier to to find a local solution.