Stripe banned us for payment disputes but we never had a single dispute

(Stripe cofounder.)

Ugh, apologies. Something very clearly went wrong here and we’re already investigating.

Zooming out, a few broader comments:

* Unlike most services, Stripe can easily lose very large amounts of money on individual accounts, and thousands of people try to do so every day. We are de facto running a big bug bounty/incentive program for evading our fraudulent user detection systems.

* Errors like these happen, which we hate, and we take every single false rejection that we discover seriously, knowing that there’s another founder at the other end of the line. We try to make it easy to get in touch with the humans at Stripe, me included, to maximize the number that we discover and the speed with which we get to remedy them.

* When these mistaken rejections happen, it’s usually because the business (inadvertently) clusters strongly with behavior that fraudulent users tend to engage in. Seeking to cloak spending and using virtual cards to mask activity is a common fraudulent pattern. Of course, there are very legitimate reasons to want to do this too (as this case demonstrates).

* We actually have an ongoing project to reduce the occurrence of these mistaken rejections by 90% by the end of this year. I think we’ll succeed at it. (They’re already down 50% since earlier this year.)

    Stripe can easily lose very large
    amounts of money on individual accounts

How so?

Is that because Stripe settles the payment on their end (they pay the merchant) before the payment to Stripe is settled?

Can crypto solve this?

I don't think crypto would solve this particular issue. Stripe needs the ability to back out of moving money, so there's several settlement periods for different parts of the transaction and ways to appeal transfers retroactively.

I suspect fraudster's are able to wait out this period without detection so they can cash out. If this is the case, then even time locking smart contracts won't help, as the fraudsters just wait out the time period. At that point Stripe would have even less recourse to recover money, as retroactive transfers are not possible at that point.

I could see services such as their debit card offering being abusable too.

They also likely have to worry about things such as predatory recurring payments as those will result in chargebacks which could ultimately fall on Stripe to foot.