“We have found a domestic bank that facilitates obtaining merchant accounts for the adult industry,” said Gregg Garfield, a spokesman for Card Service International, which is owned by First Data.
Garfield, who is based in Los Angeles, told XBiz that “when American Express, many banks, and others canceled merchant accounts for adult companies, it opened an opportunity for card service agents to find a home for adult businesses. We have an umbrella that enables us to do bank card processing of up to $30 million per month.”
However, the CSI spokesman added, that "with the limitation, we are only looking for the cream of the crop of adult firms. No fly-by-night companies.”
Garfield told XBiz what the strict conditions of eligibility for the domestic merchant accounts are.
“No one will be accepted who is billing less than $50,000 per month. The firms must have less than a 1 percent chargeback rate,” Garfield said. “No new businesses will be accepted. They must have a minimum of 12 months worth of processing statements. They must have strong financial statements.”
Garfield would not disclose to XBiz the name of the bank involved, but he asserted that it was “a domestic bank.”
Garfield said that the bank in question is not a household name.
“It’s not a Bank of America,” said Garfield, who noted that the identity of the bank would be revealed to serious clients interested in establishing merchant accounts with the financial institution.
Garfield said that since the credit-card crunch hit the adult industry, “many businesses have gone through third-party aggregators. However, the companies have no control over their customer base. It’s the aggregator’s client, not the website’s. All the credit card info is transacted and owned by the aggregator.”
He added, “A secondary option was to go to an overseas bank. But there’s a cost and control factor.”