To combat chargebacks, high-risk merchant accounts vital for online dating

Online dating websites are considered high risk by many financial institutions

With more individuals becoming comfortable with the concept of online dating, the industry has experienced a boom in terms of use and profitability. As a result, companies that provide this service need to ensure they're making use of the most beneficial tools and strategies, including payment processors backed by high-risk merchant accounts.

Research suggests that as many as 40 million Americans have frequented online dating websites, which shows the high market potential for these companies. That potential is even greater when looking overseas – in China, for instance, 140 million individuals say they have used an online dating website.

Despite those attractive figures, many online dating websites experience trouble getting off the ground for various reasons, not the least of which concerns payment processing. Financial institutions consider dating websites high-risk, partly because these ventures can experience a high rate of user turnover.

Visitors unsatisfied with their online dating experience might ask for a refund. Others may try to force reimbursement via a chargeback. While data shows only one in 10 users leave an online dating website within the first month, banks continue to hesitate when it comes to providing a merchant account.

As a result, it is crucial for e-commerce businesses involved in this industry to seek high-risk merchant accounts from reputable institutions. Since the costs and fees related to these accounts can vary depending on the provider, it helps to work with a trusted consultant that can connect companies with a suitable and affordable financial institution.

That type of strategy can also provide online dating companies with a leg up if they eventually plan to expand globally, which may help them grab a bigger piece of the industry's $1.05 billion pie.