April 24, 2024

Stripe Closed My Account

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If Stripe closed your account, it's likely because of excessive chargebacks or a breach of Stripe's terms. Here's what you can do about it.

Confused as to why Stripe closed your account? Although Stripe makes it easy for your business to accept credit card payments, the truth is that you might not get the most stable account from it.

So, what do you do now? What about your funds? Can you reopen your account? Or do you need to move on to a different processor?

All your questions are answered below.

Why Did Stripe Close My Account?

There are a couple of reasons why this could have happened. The most basic reason would be non-compliance with Stripe's terms.

Stripe will email you the reason why your account was closed. You will also see a red banner from your Stripe Dashboard that your business is no longer supported by Stripe.

Why did Stripe close your account?

Non-compliance with Stripe Guidelines

Stripe may terminate your account for any reason. If you find your account terminated, it's likely because of a breach in the Agreement. Stripe will notify you of the breach. But if you fail to correct the breach within 10 days, your account will be closed.

Examples of non-compliance include:[1]

  • Using Stripe services for personal or household purposes; Stripe can only be used for your business
  • Reverse engineering Stripe Technology
  • Attempting to or performing any action that disrupts the normal operations of Stripe
  • Copying, reproducing, or distributing parts of the Stripe services, documentation, or the Stripe Website

If not terminated, your account may get suspended instead. Some reasons for suspension include violating any law, not updating the Stripe Technology to the latest version, and if your services harm Stripe or other parties.

Stripe may communicate with you in one or three ways:[1]
  • Through your Stripe Dashboard
  • By sending you a text message or email
  • Through physical mail or delivery service to your postal address

Account Inactivity

Account inactivity is another reason why Stripe may close your account. If you have not used your Stripe account for 12 consecutive months, Stripe will consider the account inactive and automatically close it.

Inactive accounts increase the risks of fraud since lost or compromised cards won't be updated, and issues will likely go unresolved.

Don't abandon funds in your Stripe account!
If Stripe deems the funds abandoned, they will forward the funds to the appropriate governmental authority. You may or may not get notified, depending on what the law requires.[1]

Excessive Chargebacks

Stripe doesn't work with high-risk businesses. One indicator of a high-risk business is a large number of chargebacks. However, even without existing chargebacks, a high potential for them is still considered.

Additionally, high chargebacks can get you on the MATCH list. This database is used by the credit card industry to track businesses with high levels of financial risk.

What is a chargeback?
A chargeback is a returned payment after a customer successfully files a dispute for a credit or debit card transaction. Chargebacks typically occur due to fraud, technical issues, or duplicate charges by a merchant. Customers can dispute these transactions through their issuing bank.

High-volume Transactions

High-volume transactions can label your business as high-risk. This is because large-volume businesses typically receive large orders but have inconsistent revenues.

A large order can lead to a large one-time fee, which means credit card processors have a larger potential for loss.

In addition, customers also tend to have high (or unrealistic) expectations when it comes to big expenses. This means if they end up unsatisfied with the order, your business will be more susceptible to chargebacks.

Your Business Is Not Supported by Stripe

Stripe doesn't support high-risk businesses and high-risk individuals. High-risk individuals include persons or entities "named to a restricted person or party." This may be in the U.S., U.K., European Union, or United Nations.

Stripe also doesn't support businesses in:[2]

  • Cuba
  • Iran
  • North Korea
  • Syria
  • Crimea
  • Donetsk
  • Luhansk Regions

The service is also limited in Russia. You'll read more about supported and unsupported businesses a little later.

Misuse of Stripe Products

Misuse of Stripe products can also result in a closed account. This includes using the platform for illegal activities or engaging in fraudulent behavior.

Stripe has strict policies against money laundering, terrorist financing, and other forms of illicit transactions.

In addition, you cannot use Stripe if you have false, manipulated, or misleading info about your personal identity, business identity, business nature, etc.

Nor can you share cardholder information with another merchant to cross-sell products and services.

Why does Stripe freeze or shut down merchant accounts?
Stripe may freeze or shut down merchant accounts due to several reasons, including:
  • Non-compliance with Stripe's terms and conditions
  • Suspicion of fraudulent activity or high-risk behavior
  • Excessive chargebacks or disputes from customers
  • Violation of Stripe's prohibited businesses list
  • Failure to provide requested documentation or information
  • Breach of Stripe's Acceptable Use Policy

Merchants must adhere to Stripe's guidelines and policies to maintain a stable and secure account.

If Stripe closed your account and you believe it was an error, you must take action immediately. Address this issue by following the solutions below.

What to Do if Stripe Closed Your Account?

Stripe's customers have taken the following steps to resolve their account's closure:

  1. Contact Stripe support
    Reach out to Stripe's customer support team to inquire about the reason for the account closure and potential solutions.

    You may be asked to submit bank documents or other documents for proof that the closure was a mistake.[3][4]

    How would you rate Stripe's support during the closure process?

  2. Review Stripe's terms and address compliance issues
    Go through Stripe's terms and conditions to understand further any violations that led to the account closure.

    If the account closure was due to compliance issues, rectify those concerns immediately. For example, if you were accused of fraud, make sure all your business details are accurate and updated.

  3. Consider alternative payment processors
    If Stripe does not support your type of business, consider Stripe alternatives instead.

    A high-risk business, for example, may do better with PaymentCloud, a high-risk payment processor. PaymentCloud has a higher buffer for chargebacks, which is up to less than 3% (the chargeback limit is typically 1%).[5]

How long does it take for Stripe to review your account?[6]
It typically takes Stripe 3 to 5 business days to review documents submitted for account verification. But if you're trying to reopen a closed Stripe account, it may take weeks or even months of waiting for a response from Stripe's support team.

What did you do after your Stripe account was closed?

What Happens When Stripe Closes Your Account?

It can be a frustrating experience when Stripe closes your account. Your funds will get frozen, and you'll no longer be able to process payments through the platform.

The payouts can be paused for a couple of months (for example, 120 days). The remaining balance will be transferred to your bank account after this period.

Can you reopen a closed Stripe account?

You might be able to reopen a closed Stripe account depending on the reason for closure. To do so, reach out to Stripe's customer support team. They can conduct another review of your account.

You need to fill out the form they will email you. It will redirect you to your Stripe Dashboard. Then, continue providing the necessary details.

However, if your account has been closed and placed on the MATCH list, Stripe can no longer reopen your account. This is due to their banking partner restrictions.

Unfortunately, payment processors usually cannot remove your account from the MATCH list even if you request it. You'll learn more about the MATCH list a little later.

Can You Still Accept Payments After Stripe Closed Your Account?

You can no longer accept payments through Stripe if your account is closed. If this happens, it might be time to consider other credit card processing companies. Research the most suitable one based on your business type and needs.

Alternatively, explore merchant account providers. They typically offer more stable accounts compared to payment service providers, making it an ideal choice for high-risk business or a large and established one.

How can I ensure Stripe doesn't close my account?
To ensure that Stripe doesn't close your account, you should comply with the processor's terms of service and policies. This includes avoiding illegal activities, fraudulent behavior, and misuse of their products.

If your Stripe account has been closed because your business is high-risk, it will help you understand exactly what that means.

What Does Stripe Consider High-risk?

There are various industries, particularly high-risk businesses, that Stripe does not support. In addition, there are businesses that require Stripe's approval to open an account. Read on.

What is a high-risk business?
A high-risk business is a business considered by credit card processors to belong to risky industries. This could be due to a high potential for chargebacks, changing regulations, or a high sales volume.

Stripe Prohibited Businesses

Stripe has a Prohibited Business list you can check out for the full list of industries it doesn't support.

Here are some of them:

  • Businesses that infringe intellectual property rights, like distribution of music, selling of illegally imported and exported products, and unauthorized sale of designer products
  • Unfair, predatory, and deceptive products like pyramid schemes and predatory lending
  • Adult businesses like pornography, strip clubs, and online dating
  • Certain legal services like bankruptcy attorneys
  • Businesses selling cannabis products or cannabis dispensaries

Restricted Businesses Where Stripe Approval Is Required

Contact Stripe for approval if your business belongs to one of the following industries:

  • Regulated industries like CBD, tobacco, and financial products and services
  • Businesses with higher financial risks, like travel and cryptocurrency businesses
  • Businesses with business models that are prone to abuse, like multi-level marketing and shipping

Restricted businesses can ask for special consideration from Stripe.
Your business may get approved after additional review. You may be required to provide more documentation about your business.

What Happens if Stripe Blacklists You?

Being blacklisted by Stripe can have serious consequences. It may affect your ability to accept online payments smoothly.

As a business owner, you must comply with Stripe's guidelines and operate within legal boundaries to prevent such a situation.

That said, you can submit a blacklist removal request to Stripe. Explain your situation and talk about your business in detail. However, this doesn't guarantee that your appeal will be approved.

Unfortunately, Stripe's blacklist isn't the only list you need to worry about. You'll want to avoid being listed on the MATCH list, too.

What Is the MATCH List?

The MATCH list, or the Mastercard Alert to Control High-Risk Merchants list, is the most commonly used Terminated Merchant File database, or TMF. TMFs are maintained by card networks like Visa and Mastercard.

These databases store information about accounts that have been closed by credit card processors worldwide. The reasons for closure include high chargebacks or violations of card brand regulations. Payment processors consult these databases as part of the criteria for approving new businesses.

MATCH List Criteria:
You may be added to the MATCH list if you:[7]

  • Have breached card network rules
  • Engaged in fraudulent and illegal activities such as money laundering
  • Failed to comply with PCI Data Security Standard Requirements
  • A principal owner or partner of your business was convicted of criminal fraud
  • Have excessive chargebacks (e.g., if chargebacks exceed 1% of your total Mastercard sales transactions in a single month or if your chargebacks totaled $5,000+)
  • Have excessive fraud (if your fraud-to-sales dollar volume ratio is 8% or more in a month, and if there have been 10+ fraudulent transactions totaling $5,000+ in the same month)

There may be other criteria to consider. Thoroughly review all card network and payment processor terms and conditions.

Mastercard doesn't assess if the MATCH listings are accurate.
As a merchant, you should take proactive steps to avoid being placed on this list. Stay compliant with all payment processing guidelines, maintain low chargeback ratios, and promptly address any disputes or issues related to transactions.

Since Stripe can close your account at any time, you may wonder if the processor is even safe to begin with. Here's the answer to that.

Is Stripe Safe and Secure for Your Business?

Stripe is a widely used payment processor known for its safety and security measures. It can be a good idea to open an account with them. Your account may be stable as long as you comply with Stripe's policies.

Stripe takes measures to protect against fraudulent transactions. This is why there's a strict policy against businesses that don't comply with Stripe's guidelines. Regarding your transactions, no payment processor can guarantee 100% protection against all risks.

That said, Stripe provides tools to monitor and manage chargebacks. Plus, there are additional security features specifically for the protection of your account.

Stripe's Security Features
  • Point-to-point encryption
  • Secure dashboard access
  • Roles and permissions
  • 3D Secure authentication
  • Radar for Fraud Teams (machine learning and advanced fraud protection)
  • Chargeback Protection (Stripe will cover the disputed amount and dispute fees)

Having said all this, Stripe's customer reviews provide a strong reference that you may not get the most stable account.

Customer Experiences with Stripe's Services and Account Closure

Stripe doesn't have the best customer reviews. It has received a rating of 2.5/5 stars from Trustpilot from over 13,000 reviews.

Many of its clients even shared their awful experiences with the payment processor.

Blocked for No Reason
They told me that I don't meet [the] terms and conditions. And [that] after an additional audit, they can't support me as a company. [My business] is too high a risk for them.

I've passed these audits before, and I don't see it as a fair thing that my money is [now] stuck [with them]. It's 18k with 3 in reserve that was used to cover future disputes. I don't agree with this decision, and I'm willing to put a lawyer on it.

(From Trustpilot)

Extremely Bad Company
Stripe is the reason why my business is about to shut down. They are holding a lot of money from my business, saying that I charged customers without their consent—which is absolutely not true.

I have sent documents that prove that over and over and never received a response. A bot replies to me with the same reply as always…It has completely destroyed a business I spent 2 years building. I don't recommend using them at all. (From Trustpilot)

Total Scam
Stripe is 100% a fraudulent company. They will close your account, hold your funds forever, and then block your email contact so you can't message them. The responses to these reviews to contact them via email are just bots, and they will either ignore your email or send you some copy-and-paste script saying they can't help you.

I now have to get a lawyer involved just for them to communicate with me.
(From Trustpilot)

The reviews above show that Stripe may not always be the best payment processor. You may also find it difficult to get help from Stripe's customer service.

You can check out its alternatives instead.

Alternative Payment Solutions to Stripe

Whether you're a small, high-volume, or high-risk business, there's a suitable Stripe alternative that can cater to your needs.

Square: for small and seasonal businesses

Square is one of the best credit card processors for small businesses. Just like Stripe, you can set up an account without needing an underwriting process.

Square offers a free account with flat-rate pricing. You only pay when you make a sale. Plus, you can get a free card reader to help you start accepting card payments.

Your contract will be month-to-month, so you don't need to worry about cancellation fees.

Helcim: for high-volume businesses

Helcim is another great credit card processor that's suitable as an alternative to Stripe. It offers interchange-plus pricing, which can be cheaper than Stripe's flat rate.

Additionally, the higher your sales volume, the cheaper your processing fees may be.

Remember that Helcim is a merchant account provider. So, there will be an underwriting process to open an account.

PaymentCloud: for high-risk businesses

PaymentCloud is another merchant account provider that can be a Stripe alternative. It accepts low-risk to high-risk businesses, so you have fewer worries about being approved for an account.

Plus, PaymentCloud gets you a dedicated account manager, which can be convenient for your concerns. This can make it a more reliable option than simply working with a customer support team.

PaymentCloud offers customized pricing. So, you'll have to contact them for a quote. Just don't expect a month-to-month contract like Stripe if your business is high-risk.

Bottom Line

It can surprise you and halt your business operations if you find that your Stripe account has been closed. Unfortunately, this can happen anytime.

But the reason is usually due to a breach in your Agreement with Stripe or that your business is unsupported.

That said, you can always reach out to Stripe's support team if you think there has been a mistake. If there's no way of getting back your account, you can always consider Stripe's alternatives.

References

  1. ^ Stripe. Stripe Services Agreement, Retrieved 01/19/2024
  2. ^ Stripe. High Risk Jurisdictions and Persons, Retrieved 02/21/2024
  3. ^ Trustpilot. Stripe, Retrieved 01/19/2024
  4. ^ Trustpilot. Stripe, Retrieved 01/19/2024
  5. ^ PaymentCloud. FAQ: What's an acceptable chargeback ratio?, Retrieved 02/21/2024
  6. ^ Stripe. What is the verification status of my account?, Retrieved 04/24/2024
  7. ^ Mastercard Developers. MATCH, Retrieved 02/21/2024
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