Why Does Stripe Take So Long To Pay Out?

Created in 2009, Stripe.com is a combination payment processing/payment gateway company that provides financial services to businesses and consumers. Acting as a payment processor, Stripe enables merchants to accept credit card, debit card and mobile wallet payments, as well as payment-deferred services. Likewise, Stripe enables non-merchant consumers to receive money from employers, businesses, friends and colleagues.

Along with other payment processing companies such as Paypal, Venmo and Shopify, Stripe has become immensely popular because of its convenience for merchants and consumers. However, it may surprise you to find out that many industries experience great difficulties getting a Stripe merchant account — and some industries are virtually prohibited from Stripe services.

Banks and financial institutions categorize these so-called “high-risk” industries as financially risky. For this reason, they’re usually denied payment processing services, no matter how successful they may be. And when this happens to your business, the best thing to do is call in an expert.

As one of the nation’s leading high-risk merchant account providers, Zenti can help you get the merchant services you need for success. With Zenti, you’ll be able to take all major credit cards, including VISA, Mastercard, Discover and American Express, even if you’ve been denied payment services before. Plus, you’ll be able to take e-checks, mobile wallets and other digital payments at low rates you can afford.

What Does Stripe Do?

Stripe offers a wide range of convenient payment services for its customers. By using Stripe’s payment processing, merchants can accept debit and credit cards, mobile wallets and a variety of other digital payment methods. Additionally, Stripe allows merchants to accept different currencies.

However, Stripe isn’t just for online businesses. Thanks to its point-of-sale system, Stripe Terminal, merchants can also accept in-person payments through Stripe. Plus, Stripe offers invoicing, billing and sales tax services to its users.

How Does Stripe Accept Payments?

Here’s a look at how Stripe works:

• The customer presents their card or enters their card information online.

• Stripe’s payment gateway encrypts the data and sends it to the merchant’s processing bank (the acquirer).

• Once the payment passes through the credit card network, it reaches the card’s issuing bank.

When the processing is completed, the customer gets a message confirming that the payment has either been approved or declined.

How Long Does Stripe Typically Take for Payouts?

Typically, Stripe transactions take around two business days to finish processing. Once they’re processed, Stripe will make a payout to your bank account. Stripe payout times depend upon several factors, including:

• The country you’re working or living in

• Your industry

• Your account status

• Your account’s payout schedule

Fortunately, you can manage your Stripe payout schedule in various ways. However, other factors, such as your industry, may be beyond your control — and these factors can impact not only your Stripe payouts but, as we’ll discuss later, your ability even to use Stripe’s services.

Why Is My Stripe Payout Taking So Long?

According to Stripe’s support page, if you open a new account, the first payout can take longer than usual. Typically, it’s paid seven days after Stripe receives the first successful payment. However, Stripe goes on to say that the waiting period can actually take up to 14 days, particularly for businesses belonging to specific industries. According to Stripe support, the delay is imposed so that Stripe can mitigate any risks that might be associated with those industries.

After this first payout, Stripe says that subsequent payouts will be processed on a regular schedule once the risk level is established and handled. This should follow a consistent payout date each week or month, according to your Stripe account’s payout schedule.

In other words, if your business is in an industry considered “high-risk,” you may wait longer for your first payout from Stripe. Once your account has been established, your payout dates should be more consistent, and you should receive subsequent payouts regularly. As a Stripe customer, you can confirm your payment schedule on your Stripe Dashboard.

How Does Stripe Determine Risk?

Banks and financial institutions use a number of factors to determine whether or not an industry should be considered high-risk for merchant services. Specifically, Stripe and other payment processors not only follow bank industry guidelines but may also impose their own protocols to determine risk.

High-risk factors for Stripe include:

• Decline in volume: Accounts with a substantial decrease in volume (compared to previous weeks or months) may be flagged as having cash flow issues.

• Negative balance: Accounts displaying a negative balance are considered high risk because they cannot process refunds or chargebacks.

• High-risk industry: If your business is in an industry designated as high-risk for financial services, your payouts may experience delays while Stripe is taking steps to mitigate any risks they might incur.

• Higher rate of refunds: If Stripe notices a significant increase in refund activity on your account (such as a 200% increase from the previous month), they may flag it as a high risk.

• Increased dispute activity: Accounts with elevated chargeback rates above 0.75% are considered high risk.

• Longer delivery windows: Longer delivery dates mean more risks, such as inventory shortages or supply issues. This can be another red flag on a Stripe account.

If your business is impacted by its high-risk status, Zenti specializes in helping high-risk businesses get the merchant processing they need for success. With Zenti’s affordable merchant services, you’ll be able to accept a wide variety of payment methods, which can boost sales and increase customer retention. Plus, Zenti offers a full range of management tools, including invoicing and tracking solutions, so you can stay on top of every payment and transaction without spending hours on tedious bookkeeping.

Stripe Payout Delays

As a Stripe User, you may sometimes get notifications that the payment date keeps getting pushed ahead to a future date. Seeing these extra days added to your payment schedule can be frustrating, especially if you’re used to an automatic payout schedule.

According to Stripe support, the primary reason for payout delay is incomplete account verification. Specifically, there may be outstanding account verification requirements that the Stripe client hasn’t yet completed. These may be related to tax data or banking information that hasn’t yet been entered or processed into the Stripe account.

If you’re experiencing payout delays, Stripe advises you to check your dashboard or email to see if they’ve requested additional information concerning your account. Without this information, Stripe may continue to withhold payment processing services until they’ve received the correct bank account or tax documentation.

Stripe Payout Pricing

One advantage of Stripe is that the minimum payout for U.S. accounts is only 1 USD. However, keep in mind that Stripe charges a 25-cent fee for every payout or 1%of payout volume for instant payouts.

Stripe offers multiple pricing options for business clients, including alternative volume pricing options for businesses with more sales. In addition, you can customize your Stripe account and payout settings, changing payments to specific days of the week or month and managing them to suit your budget needs.

Why Was I Denied Stripe Services?

If you’ve applied for Stripe services and been denied, you may belong in a high-risk industry. For banks and financial institutions, these industries include:

• Subscription services

• Vape and CBD retailers

• Online dating sites

• Nightclubs

• Document preparation services

• Property management

• Online gambling

• Fantasy sports

• Multi-level marketing companies

• Antiques and collectibles

• Payday lending services

• Gun retailers

On its website, Stripe addresses the issue of high-risk industries. Specifically, it explains the high-risk factors and even cites these industries as being especially risky for their payment platform:

• Airline tickets

• Pre-order campaigns

• Gift cards

• Cell phones

• Drop shipping

• Concert pre-sales

• Adult entertainment

• Adult products and services

• Alcohol

• Pharmacies

• Pseudo-pharmaceuticals

• Travel

As with other payment processors, Stripe follows established banking protocols when it comes to high-risk industries. This means these industries may be charged higher fees and even prohibited from using Stripes services.

If you’ve applied for merchant services and been denied by Stripe, Paypal, or any other payment processor, Zenti can help. We specialize in getting the full roster of payment processing services for all types of high-risk merchant accounts without charging the higher fees associated with those accounts. With Zenti, you’ll be able to take all major debit and credit cards, as well as the digital payment methods you need for e-commerce success.

Stripe’s Rolling Reserve Program

Like many other payment processors, Stripe has its own rolling reserve program, which it uses for high-risk merchant accounts. In a rolling reserve program, the acquirer (or, in this case, Stripe) withholds a certain percentage of transaction funds from a merchant’s gross credit card sales and puts them in a non-interest-bearing account. Stripe holds these funds for a predetermined period, then releases them to the merchant. A rolling reserve is set for each transaction according to an agreed-upon percentage and period. As with an acquiring bank, the terms can vary from merchant to merchant, with fees and percentages depending upon the risk level of the merchant’s business and industry.

Stripe says it imposes the reserve to ensure sufficient funds will be on hand in a merchant’s account to cover potential refunds or disputes. In addition, as with other payment processors, Stripe imposes its rolling reserve to decrease the risk and liability associated with high-risk merchant accounts.

Benefits of a Stripe Account

If you’ve worked with Stripe before, you already know some advantages of using this convenient platform. Here’s a look at some of the benefits of using Stripe:

No merchant account is necessary

For a basic account, you can use Stripe without setting up an elaborate account system or committing to a subscription service.

Flat-rate fees

Stripe has a transparent pricing platform with no setup or monthly fees and no cancellation penalties.

Support for other currencies

One of the biggest benefits of Stripe is that it allows you to accept all kinds of global currencies and converts them accurately and efficiently.

Accepts a wide range of popular payment options

With Stripe, you can use all kinds of payment cards and digital payments.

Fair processing rates

Stripe’s payment processing rates are competitive and reasonable.

Good customer support

Stripe’s customer support line is open 24/7 via phone, email, or live chat.

No contract length commitment

You don’t have to commit to a long contract and can close your Stripe Account at any time once you’ve completed all pending transactions.

Customized payout timing

When receiving payouts through Stripe, you can choose your own payout schedule, whether it’s daily, weekly, or monthly.

Fast payouts

Unless there are certain circumstances, Stripe payouts are typically made within two business days in the U.S. Plus, Stripe offers instant payouts to debit cards for a fee.

Essentially, a merchant’s risk factor can affect Stripe’s payout times. If risks are involved, Stripe may put a hold on the payout until the problems are resolved, and this can cause holdups in an account’s payout schedule. Ultimately, the higher your merchant account’s risk, the more often your payments might be impacted.

If you have a high-risk merchant account and you’re trying to get Stripe payment processing services, Zenti can help. As one of the nation’s most trustworthy high-risk merchant specialists, Zenti works with leading payment processors like Stripe, enabling you to offer a wide range of credit cards, debit cards, e-checks and digital payments. Zenti also provides solutions to help you streamline your monthly invoices, plus tools so you can track and monitor every transaction, from the point of sale to its final processing.

If you’re ready to take your business to the next level of success, contact Zenti to learn how we can help you get the merchant services you need at low monthly rates you can afford.