educational

Processor Points: Pretty Woman

It’s that age old problem wherein people judge the book by its cover.

Remember the scene in “Pretty Woman” where Julia Roberts’ unsuitable character has a large amount of cash to buy some nice clothes yet the shops would not cater to her? Her character relayed to Richard Gere, a successful, welldressed character that “they were mean to me.”

I have witnessed several occurrences in which bank accounts are shut down with very little notice because the bank has decided that the business type is not suitable.

This same scenario plays out everyday in the U.S. with regard to merchant accounts and checking accounts. If you are in the adult business, then you simply can’t walk into any bank to open either a merchant account or a checking account. In fact, Eric Munz of L3 Payments called several banks in the Phoenix area asking if they would set up a business checking account for a local club. Munz stated, “The responses were varied but one large bank said that it was against their code of ethics; others stated they don’t serve that type of business”.

I have witnessed several occurrences in which bank accounts are shut down with very little notice because the bank has decided that the business type is not suitable. Of course they don’t say that directly. The bank gives a letter to the merchant that says something non-committal along the lines of — the bank doesn’t think it can serve the account holder’s needs. Basically, “Its not you; its me.”

At least with ACH and credit card merchant processing, there are banks that specialize in servicing the needs of the adult market. They have been doing so for years. They are educated in the market and are only keen on serving clients in whom they have confidence regarding compliance within the card association rules.

Business banking merchants, particularly those seeking checking accounts, have had the luxury of choosing a bank that is close to them and offers the products that they need. Supposedly, banks are there to keep your money safe and they have built their business model on wanting to attract and keep customers with large deposits as those accounts support the rest of the banking products that they offer. However, today, these regional and even national banks are targeting these very accounts and terminating them regardless of the balances.

Why, you ask? I would distill it down to one reason ... reputational risk.

How do you minimize this risk with your bank? A good start is not to flaunt the nature of your business with them. Business names should be kept as benign and nondescript as possible. Be aware of the checks you are depositing or writing these days and the names that might be on the front. With imaging capabilities and character recognition, it is very easy for check data to be screened and flagged for suspicious activity. If you have questionable company names on the checks you are depositing, think about other ways to receive those payments, for instance ACH. If you will be receiving wires from foreign countries, forewarn the bank that they will be arriving and what they represent. Through this advance foresight, when a regulator questions the bank, they will be ready with an answer and the suspicion goes away immediately.

My final piece of advice on the topic is this: set up a backup checking account as you would a back-up merchant processing account. Banks are making these decisions both proactively and as a result of a directive from some higher authority. Some banks are kind enough to give 30 days notice of termination; others terminate the accounts immediately. To ensure that you can continue to operate, be sure to have at least one back-up account. Have a list of all deposits that you receive to that account and all contact information for the issuers of those deposits so that you can communicate the new account information immediately and you are not overlooking any entities.

In the future, perhaps there will be a bank out there who doesn’t confuse solid business practices with misinformed right-wing political correctness and decides to cater to this business.

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

WIA Profile: Lainie Speiser

With her fiery red hair, thick-framed glasses and a laugh that practically hugs you, Lainie Speiser is impossible to miss. Having repped some of adult’s biggest stars during her 30-plus years in the business, the veteran publicist is also a treasure trove of tales dating back to the days when print was king and social media not even a glimmer in the industry’s eye.

Women in Adult ·
opinion

Fighting Back Against AI-Fueled Fake Takedown Notices

The digital landscape is increasingly being shaped by artificial intelligence, and while AI offers immense potential, it’s also being weaponized. One disturbing trend that directly impacts adult businesses is AI-powered “DMCA takedown services” generating a flood of fraudulent Digital Millennium Copyright Act (DMCA) notices.

Corey D. Silverstein ·
opinion

Building Seamless Checkout Flows for High-Risk Merchants

For high-risk merchants such as adult businesses, crypto payments are no longer just a backup plan — they’re fast becoming a first choice. More and more businesses are embracing Bitcoin and other digital currencies for consumer transactions.

Jonathan Corona ·
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 ·
Show More