The online dating industry has experienced remarkable growth in recent years. According to an important research paper published by Kings Research, the industry is expected to reach USD 11,702.8 million by 2030. This massive growth is creating opportunities for all types of companies in the dating sector. One crucial service that acts as a backbone for this industry is payment processing.
The QuadraPay team has created this comprehensive guide to provide you with all the necessary information regarding online dating merchant accounts. After carefully reading this entire guide, you will be able to choose the right online dating credit card processor.
Understanding Online Dating Merchant Accounts
An online dating merchant account is a specialized bank account that allows dating apps and websites to accept credit and debit card payments from users.
Most credit card processing companies simply decline applications from merchants operating in the online dating industry. This creates a significant challenge for genuine businesses. Fortunately, there are specialized payment processors that onboard online dating merchants. QuadraPay has already partnered with these processors and we will make it super easy for you to get an online dating merchant account for your website and app.
A significant change has happened for dating merchants in 2024.
Dating and Escort merchants (MCC 7273) are now subject to increased scrutiny, higher fees, and strict compliance requirements. The latest framework, which came into force on April 1st, 2024, aims to effectively manage risks associated with merchants from the dating services industry. As of April 1st, dating merchants will be charged an additional USD 0.02 per transaction. Dating services are now included in the High-Integrity Risk merchant category. All online dating merchants must be registered with the card scheme. The initial registration fee for each high-risk dating merchant increased from $500 to $950.
Key Reasons Why Most Credit Card Processors Say No to Online Dating Merchants
- High Chargeback Rates: Traditionally, online dating merchants have experienced high chargeback rates, and many payment processors have already suffered losses. A higher number of chargebacks can significantly impact the acquiring institution.
- Additional Regulations: Merchants in the online dating industry must comply with certain regulations. For example, most online dating merchants are required to ensure age verification. These add additional complexities, making mainstream payment processors hesitant to work with these merchants.
- Reputation Management: Some banks and payment processors avoid working with dating merchants due to reputational concerns. These financial institutions try to avoid being associated with anything related to online dating services.
- High Volume of Refunds: Online dating sites typically have a high refund ratio, meaning users often ask for their money back if they are not satisfied with their experiences on the mobile app or website.
- Subscription Billing Issues: The recurring billing model is common in the online dating industry; however, this can also attract disputes and friendly chargebacks. It’s quite common for users to forget they ever subscribed to the service.
- Market Saturation: Another reason is market saturation, where large players like Tinder, Bumble, Hinge, OkCupid, and Happn are consistently growing their market share, leaving very little room for new companies. The industry is experiencing consolidation, and the bigger players in the market offer significantly better services than most new players. This is why new companies hardly sustain themselves. Credit card processors prefer to work with businesses that have the potential to grow; unfortunately, many acquirers have lost interest in startup merchants from the dating industry.
- Compliance Requirements: With recent developments requiring online dating merchants to register as high-risk merchants, there are big registration fees each year and additional transaction charges. These new developments are challenging not only for the merchants but also for processors. Many startups in the online dating industry may not be comfortable taking on this financial exposure and may not complete the registration, thus failing to get an account.
All these factors together make online dating difficult industry in terms of merchant acquiring. However, if a merchant works with the right processor that truly understands this industry then it should not be a problem.
Features of Online Dating Merchant Account
QuadraPay offers highly reliable merchant accounts for dating sites. Our solutions come with top of the line features that help merchants accept transactions card payments without any stress. Let us look at some of the features we offer with our solution.
- Built-in tools to reduce chargebacks and disputes: Smart tools reduce chargebacks and minimize losses. The payment gateway automatically checks all transactions and proactively declines unsafe ones. Better monitoring helps merchants increase profit.
- Subscription payments: Support for one-time, recurring billing, and microtransactions helps companies freely accept payments of all types. The ability to accept a full range of payments helps dating sites and apps to grow.
- Easy integration with Customer Relationship Management (CRM) systems, shopping carts, and mobile apps: The online dating payment gateway comes with an extensive API and SDK guide. Merchants can easily integrate the gateway into their website, CRM system, or mobile app. Ready-to-use plugins for popular platforms like OpenCart, WordPress, Magento, and WooCommerce make e-commerce integration an easy task.
- Multiple payment methods: Apart from the conventional credit and debit cards, merchants can also accept various alternative payment methods, including local payment methods. By adding the capability of accepting payments through a larger range of payment instruments, merchants can significantly improve conversion.
Typical Requirements for an Online Dating Merchant Account
Our team will share an application form with you. You will have to fill out the form and share copies of a few business documents. These documents will be evaluated by the underwriters, who will primarily look at your company’s financial strength, credit history, and the legitimacy of the documents. Underwriters also consider various other factors, including online reputation and previous merchant account history. Here are the documents you will need to send for the application process:
- Filled merchant account application form
- Business registration document
- Utility bill for the company and the directors’ home addresses
- A letter confirming your bank details; you may also provide a voided check
- For confirmation of domain ownership, you can provide the domain purchase receipt
- For businesses already accepting credit card payments, sharing the processing history is mandatory
- Startups can share a recent bank statement
- The dating website for which you are applying must have a full SSL certificate
FAQ Merchant Account For Dating Sites
What types of online dating sites does QuadraPay support?
QuadraPay supports many types of online dating sites and apps, including niche dating services like Farmers Dating and Older Dating. We also provide merchant services to related businesses, such as dating advice platforms, online relationship forums, speed dating businesses, relationship coaching, and mobile dating apps.
Will I be able to get an additional MID (Merchant Identification) if I want to start an online dating site for another niche?
Absolutely. We are fine with that. It is quite common for online dating companies to open new niche sites. This strategy aims to capture market share across various segments, ultimately leading to business expansion. We have many clients that have online dating sites for multiple countries, religions, ages, orientations, and even health conditions. Feel free to share the new URLs, and we will help you with the next steps.
How can online dating merchants avoid chargebacks and financial losses?
Merchants should invest time with their team when drafting the website’s terms and refund policy. A comprehensive terms and refund policy can help reduce the possibility of chargebacks. Ensure that the terms do not allow members to take undue advantage of your dating platform. Clearly mention contact information and promptly address even the smallest queries from paying customers. This proactive approach can contribute to building trust and minimizing potential chargeback incidents.
