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Stripe has decided to nuke my entire business

1624 points yaythefuture | 2 comments | 15 Sep 22 16:33 UTC | HN request time: 0s | source

Saw https://news.ycombinator.com/item?id=32261868 from a couple weeks ago and figured I'd share my own story.

3 weeks ago, I woke up to a pissed off customer telling me her payments were broken. My startup uses Stripe Connect to accept payments on behalf of our clients, and when I looked into it, I found that Stripe had decided to deactivate her account. Reason listed: 'Other'.

Great.

I contact Stripe via chat, and I learn nothing. Frontline support says "we'll look into it." Days go by, still nothing. Meanwhile, this customer is losing a massive amount of business and suffering.

After a few days, my team and I go at them from as many angles as possible. We're on the phone, we're on Twitter, we're reaching out to connections who work there / used to work there, and of course, we reach out to patio11. All of these support channels give us nothing except "we've got a team looking into it". But Stripe's frontline seems to be prohibited from offering any other info, I assume for liability reasons. "We wouldn't want to accidentally tell you the reason this happened, and have it be a bad one."

We ask: 1. Why was this account flagged? "I don't have that information" 2. What can we do to get this fixed? "I don't have access to that information. 3. Who does? "I don't have access to that information" 4. What can you do about this? "I've escalated your case. It's being reviewed."

I should mention at this point that I've been running this business since 2016, my customers have been more or less the same since then, and I've had (back when it was apparently possible) several phone conversations with Stripe staff about my business model. They know exactly who our customers are and what services we offer, and have approved it as such.

After a week of templated email responses and endless anxiety, we finally got an email from Stripe letting us know that they had reviewed the account and reactivated it. We never got a reason for why any of this had happened, despite asking for one multiple times. Oh well, still good news right? Except nope, this was only the beginning.

This morning I woke up to an email that about 35% of my client accounts had been deactivated and were "Under review", the kicker here being that one of those accounts is the same one they already reviewed last week! This is either the work of incompetent staff or (more likely) a bad algorithm. No reasonable human could make this mistake after last week's drama.

So currently, my product doesn't work for 35% of my customers. Cue torrent of pissed off customer emails.

And the best part is, this time I have an email from Stripe this time: Apparently these accounts are being flagged, despite the notes on our file, and despite the review completed literally last week, as not in compliance with Stripe's ToS. They suggest that if I believe this was done in error, I should reach out to customer support. Oh, you mean the same customer support that can't give me literally any information at all other than "We have a team looking into it"? The same customer support that won't give me any estimates as to how long it's going to take to put this fire out? The same customer support that literally looked into this a week ago and found no issues!?

I feel like I'm going crazy over here. These accounts have hundreds of thousands of dollars in them being held hostage by an utterly incompetent team / algorithm that seems to lack any and all empathy for the havoc they wreak on businesses when they pull the rug out from under them with no warning, nor for the impact they have on customers when they all of a sudden lose all ability to make money. And all that for an account that has been using Stripe for nearly 7 years without issue!

This goes so far beyond "customer support declining at scale." If lack of customer support means that critical integrations start to fail, that's not a customer support failure, that's a fundamental business failure.

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orionint ◴[15 Sep 22 17:04 UTC] No.32855106[source]▶
Used to work for a “high risk” payment processor, we inherited tons of accounts that were terminated by Stripe, Square, and PayPal. Here’s one small bit of inside info that may help the newer businesses out there:

Most real payment processors (e.g. banks, merchant services companies) “underwrite” a company BEFORE allowing them to process. Underwriting means they look over the business model, financials, etc and make sure the business is an acceptable risk, not doing anything illegal or against their terms, etc. So you’re more likely to be declined initially, but if you’re lit up, you should be good for the future because the underwriters actually saw the deal and approved it.

While I haven’t worked for these other companies, a lot of experience seems to show that Stripe, Square and PayPal operate differently: they light up ANYONE, and then only underwrite when the account hits a critical threshold of revenue. So it’s easy to get an account there, but if you scale up, that’s when you’ll be scrutinized and potentially terminated. It’s a very unethical practice because it ends up hitting businesses at the worst possible time, when the termination or suspension causes a huge financial hit.

So basically, always have a backup processor and use these web based services at small scale to prove out your model, but NEVER rely on them as your sole payment solution.

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max51 ◴[15 Sep 22 18:42 UTC] No.32856591[source]▶
>It’s a very unethical practice because it ends up hitting businesses at the worst possible time, when the termination or suspension causes a huge financial hit.

You forgot the part where Paypal get to keep your money when they close your account. And it's not like they only keep it temporarily in case of lawsuits/chargebacks, they just keep it forever. I still can't believe that crap is legal.

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vlod ◴[15 Sep 22 19:41 UTC] No.32857474[source]▶
Are you saying you should empty your account constantly (nightly?) in case paypal gets shut down your account, for unknown and un-communicated reasons?
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1. max51 ◴[16 Sep 22 01:45 UTC] No.32861016[source]▶
You know what's better than learning from your own mistake? learning form other people's mistake.

If you login during a vacation overseas and get your account locked, they keep everything in it. Doesn't matter if you never did any transactions yet and all that money is yours from the bank account you linked. If you get banned, you lose it. Getting your account and/or your money back is about the same level of difficulty as getting unbanned from a google account. It's not impossible, but be prepared to take them to court.

If you only use PayPal to purchase things online, the protection is great, but you don't want to be on the other end of that transaction.

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2. sacrosancty ◴[16 Sep 22 08:09 UTC] No.32863464[source]▶
I've had my Paypal account frozen because I was cheating by living in a different country, not just on holiday. I managed to recover it by giving them the documents they wanted to "prove" that I lived in the country my account was in. I think this included getting my bank to send statements to a family member's address and have them email me a copy. I know some people really do get locked out for good but that wasn't my experience.

Trying to get money from a real bank account (Lloyds in England) after moving out of the country was much harder though. It involved writing several letters and getting a policeman to stamp something, as well as multiple phone calls, including to several staff who gave me wrong advice. But still, they returned my money eventually.