So, you’ve got your eye on international growth. Smart move. No matter where adult-industry merchants operate, however, one requirement remains consistent: regulatory compliance. This isn’t just a legal checkbox — it’s a critical component of keeping payments flowing and business operations intact.
As content consumption grows globally, international compliance can get complex and confusing pretty fast. Varying regional laws, payment mandates and age verification requirements can disrupt processing relationships overnight if not addressed proactively and thoroughly. So if your business is expanding into another part of the world, understanding the regulatory landscape in that market is essential.
Compliance isn’t a matter of copy-paste across borders. What works in the U.S. won’t fly in Europe, and your Australia setup won’t look anything like your EU operation.
This article will give you a head start in that direction by exploring important factors adult merchants need to consider in two specific regions: Europe and Australia.
Europe: PSD2, SCA and Age Verification Laws
These days, doing business in Europe means playing by a very specific set of rules. The European Union’s Payment Services Directive 2 (PSD2) has brought some major changes to the table, especially due to the new Strong Customer Authentication (SCA) requirement.
In short, SCA means that if you want to accept online payments from EU customers, you’ll need to verify those users with at least two of three factors:
- Something they know, like a password.
- Something they have, like a phone.
- Something they “are,” like a fingerprint or facial recognition.
For adult content platforms, that requirement can generate extra friction, which can create problems such as dropping conversions, if your payment flow isn’t optimized for it. To minimize user drop-off, look for gateways that support 3D Secure 2.0 (3DS2) with built-in biometric or app-based verification options. Integrating a processor that offers adaptive authentication can also reduce failed transactions by balancing security with user experience.
Many U.S.-based merchants expanding into the EU underestimate just how much SCA can affect user behavior and checkout success rates.
Then there’s age verification. While this is a global hot topic, Europe is further along in requiring platforms to put real safeguards in place. In the U.K., for example, the Online Safety Act includes potential penalties for adult sites that don’t adequately verify users’ ages. Other countries, like Germany and France, are following suit, each with its own twist on compliance.
The bottom line: If you’re processing payments or publishing content for European audiences, you’ll need to comply with both payment regulations and platform standards, and those often vary by country. Don’t assume the EU is a single bloc when it comes to rules or enforcement.
Australia: Age Verification, Digital ID and Legal Grey Areas
Want to do business “down under”? It’s easy! Until it’s not.
Australia is in the middle of a regulatory evolution, especially when it comes to online safety and age-restricted content. For adult merchants, that means staying ahead of new requirements that are coming fast, and which promise real consequences for those who don’t keep up.
Keeping up begins with age verification. The Australian government has been pushing hard for platforms to implement meaningful controls to prevent minors from accessing explicit content. In 2023, the eSafety Commissioner proposed strict guidelines that would require sites hosting adult material to verify user age using privacy-conscious yet effective methods — think facial recognition, government-issued ID checks or third-party age verification services.
While not yet fully codified, these proposals are likely to become official soon, bringing with them enforceable standards with penalties to match.
Then there’s digital ID. The government is investing heavily in secure digital identity systems, which could eventually become the preferred or even required method for proving age or identity online. For adult platforms, integrating with these systems could become a compliance must. Start by evaluating whether your platform can support API-based integrations with government ID providers, or if a third-party age verification vendor is a better fit. Some platforms are pre-certified by local regulators, which can streamline your compliance efforts and reduce implementation time.
In addition, adult content in Australia exists in a bit of a legal grey zone — the last words anybody in the billing world wants to hear. What’s permissible can vary by state, so certain types of content may be legal in one locality but restricted or banned in another. This patchwork approach means that platforms serving Australian users need to understand not just federal policy but also regional nuances.
The bottom line: Australia is a smaller market, but its regulatory landscape is tightening as fast as all the bigger ones. If you’re not already preparing for age verification and digital ID integration, now is the time to start.
Common Challenges for Adult Merchants
As the above examples make clear, compliance isn’t a matter of copy-paste across borders. What works in the U.S. won’t fly in Europe, and your Australia setup won’t look anything like your EU operation. This regulatory juggling act can be frustrating, but it gets better if you understand the challenges most likely to arise, and the best practices for handling them:
- Navigating multiple compliance frameworks. Between PSD2 in the EU and emerging digital ID laws in Australia, adult businesses need to tailor their payment flows by region. That means different age-verification tools, different KYC procedures and, in some cases, different acquiring banks. All this just to keep payments flowing.
- Cross-border payment settlement. Many adult platforms process payments globally but settle funds in a central account. Depending on the region, this setup can trigger flags from banks, delays in fund transfers — or worse, cause outright rejection of transactions. It’s not just about getting paid; it’s about making sure your payment infrastructure doesn’t set off alarm bells with regulators or payment partners.
- Fraud and chargebacks. Let’s not forget this old nemesis. High-risk businesses already face higher scrutiny from banks and gateways. Adding international layers only further complicates fraud prevention. If your system isn’t set up to monitor transactions by geography or payment type, you’re looking at chargeback rates that can jeopardize your merchant account altogether.
The bottom line: The more markets you enter, the more compliance landmines there are to step on. Without a strategy built for complexity, your growth plans could backfire fast.
Best Practices for Staying Compliant
You don’t have to fear international expansion. You just have to be smart about it. Easier said than done? Perhaps. But while regulations can vary wildly across regions, the right foundation — and the right partners — can help. Here are some crucial tips for making compliance feel less like a burden and more like a growth strategy:
- Work with a high-risk processor that actually specializes in high-risk. Not all payment processors are built for this sector. You need one that understands adult, has experience navigating region-specific regulations, and knows how to keep your merchant account stable even when local laws shift. Ask the hard questions: Do they have local acquiring partners? Can they help with age verification integrations? Are they proactive — or always playing catch-up — when regulations change? This info will help you assess their capabilities when it comes to international processing.
- Tailor your compliance stack by region. A one-size-fits-all checkout flow will not cut it. You’ll need different solutions depending on where you operate. That might mean using separate payment gateways for different countries, localizing your KYC workflows or integrating with national ID systems where required. Yes, it’s more setup — but it’s also way fewer headaches down the line. That’s something we all need in today’s high-risk billing world.
- Stay updated and stay agile. Regulations change fast. What’s compliant today might be noncompliant tomorrow, especially in places like Australia where digital laws are still actively evolving. Make it someone’s job — and that someone could be your processor — to stay on top of emerging laws, enforcement trends and required technical updates. If your processor isn’t staying on top of current trends, switch to a processor who does.
- Build in user trust without hurting conversions. Age verification doesn’t have to tank your user experience. There are now third-party tools that do this well, balancing privacy, security and compliance. When users trust that you’re legit and secure, it’s a win for your brand, not just for your legal checklist.
The bottom line: You can’t shortcut compliance, but you can streamline it. Global compliance doesn’t have to be scary — it just has to be smart. For adult merchants expanding into new markets, the rules might be different, but the goal is the same: Keep payments flowing and platforms live. With the right strategy and the right partners, you can navigate international red tape and preserve your competitive edge. That’s what keeps you online and profitable.
Jonathan Corona has two decades of experience in the electronic payments processing industry. As chief operating officer of MobiusPay, he is responsible for day-to-day operations as well as reviewing and advising merchants on a multitude of compliance standards mandated by the card associations.
