OT: I just went through Adyen's prohibited businesses. Why does every major payment processor prohibit vendors of adult toys from using their payment services?
I mean, those aren't even high risk businesses. Credit card fraud usually happens when you offer high priced electronics. Chargebacks usually happen when you sell digital goods like templates, ebooks, videos etc.
You need a merchant account from a high-risk processor, combined with a generic gateway like Authorize.Net. (Don't use their built in processor) The all in one solutions like Stripe or Adyen are convenient but they aren't what high-risk industries need.
From the article: “According to Section 43.23 of the Texas penal code, although it doesn’t clearly state dildos, the law still regulates the possession of ‘obscene devices’”
I've wondered about this, too. The simple and unhelpful answer is because banks/CC companies are conservative and consider them high risk. So why is that? I've been able to find two factors: 1) associated (correctly or not) with the sex industry, which is taboo, possibly regulated or outright illegal. 2) high rate of chargebacks. Factors leading to high chargebacks could include no returns allowed and taboo/shame. Imagine an insecure partner finds a charge on a CC and the other partner claims they didn't purchase it, leading to a chargeback to support the lie.
The credit card networks have brand protection clauses in their operating procedures.
They likely don’t actually prohibit adult toys specifically but payment processors can be conservative in fear of having major disruptions from the networks.
Their offering perfectly fit the bill for what we needed, but they turned us away; citing a requirement of transacting €5M per year, despite us needing a payment handler /for launch/.
That’s sad. We integrated Adyen like 5-6 years ago and this requirement was nowhere to be found. All I remember was their SDKs are difficult to integrate.
