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Funny not once has someone mentioned the FACT that it cost $1000.00+ to be registered as a high risk merchant with your own merchant account, that is if you can find an acquiring bank willing to take the risk.
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$1000 where?
I got a full-blown merchant account for *no* upfront fee. There's a monthly gateway fee for the secure processing, and a monthly fee to belong to Authorize.net. Total: about $50 per month.
I can process credit cards, take checks online, I can display all of the logos.
www.Charge.com <-- won't even put my referral code on it.
As for incorporating, if you let some company do it for you, it's going to cost. Do it yourself - it's extremely simple and you can get all of the forms online - and it's going to cost you about $150. In my state, Virginia, that was a $75 incorporation fee, a $25 processing fee, and a $50 fee for a *local* business license. Registering as an S-company is as simple as downloading a form, filling it out, and faxing it in. Getting a FEID (federal employer identification #) is just as simple. Being an S-company allows you to pass the tax burden through to yourself and pay lower taxes than the corporation will have to pay, then having to pay taxes again when you pay yourself and report it as income.
The last I checked, processing fees were about 2.5% for Visa/MC for my merchant account. I got a great deal from Amex with a flat $5/month fee until I go over $5k/mo in Amex transactions.
The 15% plus that some of these third-party processors are charging is ridiculous.
Check out places like PayPal.com, ProPay.com (which lets you process credit cards anywhere, even in person if you've got your laptop with you, and you can control your client's CC #), and other processors. These processors haven't released a statement yet as to how this is going to affect them, but their rates are MUCH lower than the 15% the 'typical' adult processors are charging.
I'm involved in both mainstream and adult and this is just *my* experience, so be sure you read all of the fine print and check the TOS and AUP at all of these places - plus wait for a statement from each processor rather than listening to the Chicken Littles - before you make any kind of decision.
Look online at your state's official web site (not one of those "Incorporate Here!" bullshit sites) for information on incorporating. It's easy as pie and very affordable.
Bottom line - don't believe anyone's hype. Do your own research and weigh all of your options. Find out the facts for yourself - how it's going to affect YOUR business, what the fees are that YOU will pay (not what someone threatens you will pay), and whether it's more profitable to stay where you are or switch to an alternate method.
And pay close attention to the people posting on these boards from the processors. The big attitudes and the outright threats have left an extremely bad taste in my mouth - there's at least one 3rd party processor who's had someone posting tonight that will never get my business thanks to the attitude their representative has shown this evening. This isn't about bullshit and egos, this is about business. Act like professionals or hire someone who can do the talking for you.