trends

New Banks in Adult? Not!

Gone are the days of convincing any old bank to increase revenues by expanding its merchant base with 5967 accounts.  With traditional banking fees being terminated, debit fees being threatened and interest rates being practically non-existent, banks are looking to increase revenues through other programs to keep their shareholders happy.

One of the most tempting methods for most banks is the seemingly quick revenue boost that comes from entering a higher risk market.  There are always players out there that work with a bank to create a relationship where they convince the bank that they have a solid portfolio and can manage the risk.  The bank gets buyoff from their stakeholders regarding this new market and processing begins.  With a small success they open up to many more relationships and watch the volume grow exponentially while chargebacks stay within compliance.  Revenue is great and everyone is happy. 

Visa is stepping in and ensuring that the bank is both prepared and serious about the business...

As the growth slows down, the operational impact begins, as the chargeback ratios catch up to the growth.  Suddenly these banks are faced with phone calls, letters, and auditors descending on the bank as they see a potential problem on the horizon.

This cycle has been going on for years and the associations are deciding to get ahead of the game by instituting new requirements for banks interested in getting into the space.

Visa is stepping in and ensuring that the bank is both prepared and serious about the business before they are going to be allowed to actually process 5967 merchants.

Effective June 1, 2011, any bank globally, that wants to get into 5967 processing must first ante up with $50,000 (depending on the region) to register as a high-risk bank.  The bank must also:

  1. Be investment-grade and have at least U.S. $100 million in equity capital.
  2. Comply with all Visa policies, as defined in the Visa International Operating Regulations and Regional Operating Regulations.
  3. Conduct due diligence to ensure compliance with the Visa Global Acquirer Risk Standards.
  4. Be in good standing in all Visa risk management programs.

Once the bank has begun the process, they must go through an on-site audit within a 60-day time frame of receiving notification that they can proceed with the audit.  Visa will review the results of the audit and determine if the bank has satisfactorily met the required criteria.  The bank will receive a letter with the final decision and it will detail any conditions that are imposed on the bank.

Further, a bank that is new to high risk processing and fails to comply with registration requirements, may be assessed a fine of $25,000 per month and may result in their ability to process high-risk transactions being taken away.

As you can see, the new guidelines will keep the bank that is going to dabble in 5967 out of it altogether and the only banks that can really afford to start the process will need to be large banks that can afford the registration fees and the ongoing operations overhead before they see any revenue for that line of business.

It seems that the banks that are already in the space are allowed to keep going but anyone new will have to prove their commitment to the process.

At this point in time, it is my advice to you to be good to your bank and to keep your merchant account in very good standing!  However, as you look to mainstream businesses, you can still enjoy the many relationships both new and old that develop over time.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

opinion

What the New SCOTUS Ruling Means for AV Laws and Free Speech

On June 27, 2025, the United States Supreme Court handed down its landmark decision in Free Speech Coalition v. Paxton, upholding Texas’ age verification law in the face of a constitutional challenge and setting a new precedent that bolsters similar laws around the country.

Lawrence G. Walters ·
opinion

What You Need to Know Before Relocating Your Adult Business Abroad

Over the last several months, a noticeable trend has emerged: several of our U.S.-based merchants have decided to “pick up shop” and relocate to European countries. On the surface, this sounds idyllic. I imagine some of my favorite clients sipping coffee or wine at sidewalk cafés, embracing a slower pace of life.

Cathy Beardsley ·
profile

WIA Profile: Salima

When Salima first entered the adult space in her mid-20s, becoming a power player wasn’t even on her radar. She was simply looking to learn. Over the years, however, her instinct for strategy, trust in her teams and commitment to creator-first innovation led her from the trade show floor to the executive suite.

Women in Adult ·
opinion

How the Interstate Obscenity Definition Act Could Impact Adult Businesses

Congress is considering a bill that would change the well-settled definition of obscenity and create extensive new risks for the adult industry. The Interstate Obscenity Definition Act, introduced by Sen. Mike Lee, makes a mockery of the First Amendment and should be roundly rejected.

Lawrence G. Walters ·
opinion

What US Sites Need to Know About UK's Online Safety Act

In a high-risk space like the adult industry, overlooking or ignoring ever-changing rules and regulations can cost you dearly. In the United Kingdom, significant change has now arrived in the form of the Online Safety Act — and failure to comply with its requirements could cost merchants millions of dollars in fines.

Cathy Beardsley ·
opinion

Understanding the MATCH List and How to Avoid Getting Blacklisted

Business is booming, sales are steady and your customer base is growing. Everything seems to be running smoothly — until suddenly, Stripe pulls the plug. With one cold, automated email, your payment processing is shut down. No warning, no explanation.

Jonathan Corona ·
profile

WIA Profile: Leah Koons

If you’ve been to an industry event lately, odds are you’ve heard Leah Koons even before you’ve seen her. As Fansly’s director of marketing, Koons helps steer one of the fastest-growing creator platforms on the web.

Women in Adult ·
opinion

What France's New Law Means for Age Verification Worldwide

When France implemented its Security and Regulation of the Digital Space (SREN) law on April 11, it marked a pivotal moment in the ongoing global debate surrounding online safety and access to adult content.

Corey D. Silverstein ·
opinion

From Tariffs to Trends: Staying Resilient in a Shaky Online Adult Market

Whenever I check in with clients these days, I encounter the same concerns. For many, business has not quite bounced back after the typical post-holiday-season slowdown. Instead, consumers have been holding back due to the economic uncertainty around the Trump administration’s new tariffs and their impact on prices.

Cathy Beardsley ·
opinion

Optimizing Payment Strategies for High Ticket Sales

Payment processing for more expensive items, such as those exceeding $1,000 per order, can create unique challenges. For adult businesses, those challenges are magnified. Increased fraud risk, elevated chargeback ratios and heavier scrutiny from banks and processors are only the beginning.

Jonathan Corona ·
Show More