Getting your own merchant credit card account

[Sodamninsane]

OK, here?s the idea:

1) Start a website that sells recurring subscriptions to a newsletter about anything non-adult. (Anything = financial news, weather, whale watching, cat juggling, whatever?)
2) Get a merchant account and gateway for this website. The bank people will give this website a cursory check and likely grant you a merchant account for $150. Your fees will likely be 2.5% of sales plus $0.25/per transaction and a statement fee of $10/month
3) Get a shopping cart script (NOT a monthly service provider) that interacts with the gateway via AIM or SIM and customize that shopping cart to handle password management. Cost: anywhere from $300-$800 if you go overseas.
4) Enjoy not paying 14-15% to any of the other third party providers.

And here?s the questions:

1) Legalities. I don?t think this is illegal to do, per se, but of course my merchant account bank would shut me down if they ever found out. Is this illegal?
2) Likelihood of getting caught. Here?s what it would take to get caught IMO (keep in mind that this next part is also a question, in that, here?s where I don?t know exactly what I?m talking about, but it sure does sound logical): Some maniac who for some reason decides to initiate a chargeback calls his credit card company to complain that he ?Paid for an ADULT site and got ripped off?. He fills out his complaint form and sends it off. His bank then gets the money back from my bank. My bank asks for the reason for the chargeback. They tell my bank it was an adult site rip off. My bank says, ?That?s funny, this guy sells cat juggling newsletters?. My bank calls me, says ?What the fuck?, and there we have it.
3) Is anyone out there doing this or thought of this?
4) Let me know how dumb or smart this is
5) BTW, I?m already in the middle of step #3 above, but am hesitant to pull the trigger on the whole deal base on the feedback I get here. I imagine it will be interesting and scathing.

Thanks in advance!

[Corey Bryant]

It is illegal to do so. You signed a merchant agreement with your CC processor (which by the way 2.5% is a little much) and you stated you are selling cat furniture. This is turned in to Visa/MasterCard & Amex & Discover if you chose them. They all review the site & all links. Everything is found to be on the up & up. So you are approved.

Now it does not even matter if you add adult content. Let's say you start to sell cell phone batteries. And someone does a chargeback. You are in trouble since you told the above companies you are selling cat furniture.

Have people thought about it - yes. Have they been caught - yes. One of the reasons that Visa/MasterCard implemented the extra charges for adult websites. And some are placed on the MATCH list. And this could screw you over for the rest of your life if you ever wanted to accept Visa/MasterCard for another business.

You actually do not have to pay 15% - there are some other processors out there that do handle audio / video text & it is your own merchant account & not going thru a third party. That is why those charges are higher because the risk is even higher then.

[monro]

We can process at a VERY öpw cost!