OnlyFans currently uses Stripe as their payment processor. The aggregate merchant account provider makes special exceptions for the high-volume adult content provider. In the past, card companies like Visa and Mastercard have cracked down on the industry. These changes almost caused OnlyFans to drop their adult content altogether.
Like most adult content streaming companies, their products and content providers are hard to regulate. OnlyFans currently has around 1.5 million creators and over 170 million registered subscribers. With numbers like these, it takes a great deal of internal resources to monitor, and correct illicit behavior.
The chargeback rates for adult content are historically very high for reasons that seem quite common. Some customers make clandestine transactions and later realize the charge shows up on their credit card statement. To delete the transaction altogether they file for a chargeback which ends up as a relinquished payment.
Additionally, chargebacks occur as a result of a subscription billing model. This type of payment is billed automatically over time, usually weekly or monthly. As such, customers often forget about the payment when it’s left on autopilot. When they see it later on their statement they cancel and in many cases dispute the charge if the merchant doesn’t offer a refund.
There are many options when it comes to accepting credit card payments online. If you’re a startup or an established business, you’ll want to find a high risk processor that works with adult online sites. Zen Payments for example, has a history of onboarding multiple types of adult, pornogrpahic, and mature content.
OnlyFans is a unique case which doesn’t apply to smaller sites so Stripe will most likely not be your best choice. One reason they allow OnlyFans to process is because of their size. Currently, the company is valued at around one billion dollars. They leverage their transaction volume to get lower rates and bend the standards. In short, money makes a difference when it comes to fees and regulations.
After the rise in popularity of personal streaming platforms, many similar sites began arising. The model presents an excellent opportunity because each content provider supplies their own videos while the host takes a portion of the payments to run the website. In theory, this seems like a good idea for easy growth.
The issue from a payment processing standpoint is that technically, each one of the streamers represents their own micro-business. As a result, banking underwriting stipulations for certain processors require each of those individuals to have their own merchant account. At that point, the business model is unviable.
Certain payment processors create custom accounts specifically in the adult space. These companies are equipped with customer service representatives that help businesses update their website or make changes to their content in order to qualify for payment processing.
The rates for an adult merchant account are often higher, but it’s the cost of doing business. High risk means the bank is taking a gamble, and being the risk averse industry they are, they’ll charge the difference in payment processing. Luckily, the fees are only around 5%, and the good news is they can get you up and running almost instantly in some cases.