opinion

Billing Solutions That Best Suit a Merchant’s Needs

Billing Solutions That Best Suit a Merchant’s Needs

At SegPay, we work with merchants to identify payment processing solutions that best suit their needs.

Most merchants in the high-risk space fall into one of three processing categories: They either need the assistance of a payment facilitator to help manage risk, a payment gateway to take control of their credit card processing internally or a combination of the two solutions.

Banks and card schemes are often adjusting rules and regulations. It’s not uncommon to have a merchant account suspended or canceled.

Each model fits a different stage of a company’s lifecycle.

Let me share some details around each option in hopes of helping you make the best decision for your business.

Payment facilitator

For high-risk merchants with a startup or young business, using a payment facilitator to process transactions is typically the best solution. As a new business with a limited processing history in the high-risk space, it’s very difficult to acquire a merchant account that is needed to accept digital payments. Using a payment facilitator not only allows these merchants to quickly and easily start processing transactions, but also provides security against compliance issues and fraud, as the facilitator takes on the risk associated with opening and maintaining a merchant account.

Processing transactions with a payment facilitator allows merchants to focus on growing their business. Merchants are safest using a payment facilitator if their business doesn’t have the infrastructure to take on issues around fraud and/or maintain customer support. A payment facilitator also navigates the complex issues surrounding card brand regulations and PCI compliance.

Payment gateway

As a business begins to grow and build out internal infrastructure, it makes sense for merchants to look at moving their payment processing to a gateway service. Gateways allow online merchants the ability to accept transactions and control all aspects around digital payment processing.

A gateway serves as the “connector” or online version of a payment terminal. Think of it as the swipe or chip reader at the retail store. A gateway essentially provides the authorization and submission of payments between the purchaser and the merchant’s bank.

A business using a gateway needs its own merchant account since the organization is managing payment services directly. Since the company is responsible for the entire payment process, it needs to think about how it’s going to handle all items related to payment processing, including PCI compliance, fraud and other billing-related issues. Businesses using a gateway need the staffing capabilities and company infrastructure to manage the payment process. Some gateways offer additional services, such as data reporting, customer service and fraud mitigation, but these are typically upgrades with additional fees.

A gateway can allow merchants to load-balance across multiple accounts to manage risk. However, from a marketing perspective, businesses can only cross-sell and up-sell within its own properties. The card brand rules do not allow merchants to pass data outside of their network and limit cross marketing ventures to their own merchant account.

Gateways are an effective option for businesses looking for more flexibility in pricing, billing methods and testing of various business models. A gateway solution typically puts the most control of the account in the merchant’s hands while a payment facilitator’s program tends to be locked down, giving the merchant limited control. It truly allows merchants to select what services they need for their business. Merchants should be aware of both the freedoms and limitations associated with the gateway, including the exposure to potential risk from running credit card transactions. If a company has the competencies in-house to manage payment processing, then a gateway is probably the best option.

Combination of payment facilitator and gateway

There are times when a merchant might need both a payment facilitator and a gateway service. If a bank caps a merchant’s account due to a high chargeback rate, then having both would allow the merchant to load-balance between the two accounts, splitting the responsibilities between what the business manages and what the payment facilitator manages.

Combining a payment facilitator with gateway services allows merchants to test new markets and new business models. Running tests through a payment facilitator while continuing to manage pre-existing billing through the gateway is an effective way to manage risk around new business endeavors. As new business models start to gain traction with secure transactions, merchants can move the activity over to the gateway and assume the risk with their own merchant account.

It’s good to have a backup plan if you’re a high-risk merchant. Banks and card schemes are often adjusting rules and regulations in this space. It’s not uncommon to have a merchant account suspended or canceled. Having a backup payment facilitator in place for those payment processing “surprises” is a great idea.

It took only three years for Cathy Beardsley to turn startup SegPay into a profitable company. As president and CEO, Beardsley oversees the day-to-day operations and long-term strategic planning for the company. SegPay is one of four companies approved by Visa USA to operate as a high-risk internet payment service provider in the U.S. Since 2005, SegPay has offered online merchants a state-of-the-art billing platform that provides realtime payment processing around the globe.

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

profile

WIA Profile: Reba Rocket

As chief operating officer and chief marketing officer of Takedown Piracy, long at the forefront of intellectual property protection in adult entertainment, Rocket is dedicated to safeguarding the livelihoods of content creators and producers while fostering a more ethical and sustainable industry.

Women In Adult ·
opinion

Protecting Content Ownership Rights When Using AI

In today’s digital age, content producers have more tools at their disposal than ever before. Among these tools, artificial intelligence (AI) content generation has emerged as a game changer, enabling creators to produce high-quality content quickly and efficiently.

Corey D. Silverstein ·
opinion

How Payment Orchestration Can Help Your Business

An emerging payment solution is making waves in the merchant world: the payment orchestration platform (POP). It’s quickly gaining traction as a powerful tool for managing online payments — but questions abound.

Cathy Beardsley ·
opinion

Fine-Tuning Refund and Cancellation Policies

For adult websites, managing refunds and cancellations isn’t just about customer service. It’s a crucial factor in maintaining compliance with the regulations of payment processors and payment networks such as Visa and Mastercard.

Jonathan Corona ·
profile

WIA Profile: Laurel Bencomo

Born in Cambridge, England but raised in Spain, Laurel Bencomo initially chose to study business at the University of Barcelona simply because it felt familiar — both of her parents are entrepreneurs. She went on to earn a master’s degree in sales and marketing management at the EADA Business School, while working in events for a group of restaurants in Barcelona.

Women In Adult ·
profile

Gregory Dorcel on Building Upon His Brand's Signature Legacy

“Whether reflected in the storyline or the cast or even the locations, the entertainment we deliver is based on fantasy,” he elaborates. “Our business is not, and never has been, reality. People who are buying our content aren’t expecting reality, or direct contact with stars like you can have with OnlyFans,” he says.

Jeff Dana ·
opinion

How to Turn Card Brand Compliance Into Effective Marketing

In the adult sector, compliance is often treated as a gauntlet of mandatory checkboxes. While it’s true that those boxes need to be ticked and regulations must be followed, sites that view compliance strictly as a chore risk missing out on a bigger opportunity.

Jonathan Corona ·
opinion

A Look at the Latest AI Tools for Online Safety

One of the defining challenges for adult businesses is helping to combat the proliferation of illegal or nonconsensual content, as well as preventing minors from accessing inappropriate or harmful material — all the more so because companies or sites unable or unwilling to do so may expose themselves to significant penalties and put their users at risk.

Gavin Worrall ·
opinion

Know When to Drop Domains You Don't Need

Do you own too many domains? If so, you’re not alone. Like other things we accumulate, every registered domain means something to us. Sometimes a domain represents a dream project we have always wanted to do but have never quite gotten around to.

Juicy Jay ·
opinion

Understanding 'Indemnification' in Business Contracts

Clients frequently tell me that they didn’t understand — or sometimes, even read — certain portions of a contract because those sections appeared to be just “standard legalese.” They are referring, of course, to the specialized language used in legal documents, including contracts.

Corey D. Silverstein ·
Show More