Stripe High-Risk Payment Gateway

Stripe High-Risk Payment Gateway Overview

If your Stripe account happens to be one of the many affected by a freeze, termination, or Stripe holding funds, read on to find out what you can do to get your account back on track. For every business across every industry, a quality payment processor is a necessary tool for success.

Why Does Stripe Freeze or Shut Down Merchant Accounts?

• By default, Stripe refuses processing if you have an unauthorized business.
• If your Stripe account faces closure, you've likely been deemed an unauthorized or banned merchant, an eCommerce merchant requiring delivery verification, or a high-risk merchant.

Stripe can close your account without warning

• Stripe's reputation for terminating accounts without prior warning or explanation had led to its unfavorable reputation amongst merchants.

How to Tell if Stripe Closed Your Account

• Stripe informs merchants of their account's termination via an automated message.
• There is no course of action to reclaim your account, find out why your account was suspended, or reinstate payment processing for your business. Stripe states that they respond to customers within 24 hours, but it is unlikely.

How long does Stripe normally take to pay you?

• Contact Stripe's customer support to inquire about your account closure.
• If Stripe remains unwilling to reinstate your account, contact any customers who may have been affected by the termination.
• In the meantime, quickly set up a partnership with another payment processor to continue your business operations as normal.

What is the MATCH List?

• The Member Alert to Control High-Risk (MATCH) list refers to a list documenting high-risk businesses.
• It's also referred to as a Terminated Merchant File (TMF).
• Businesses unfortunate enough to make this list are essentially blackballed by many financial institutions.
• Once your business joins this list, removal is difficult and may complicate the operations of your business.

List of Stripe Restricted Industries & Prohibited Businesses

• Stripe's services are unavailable to certain countries, industries, and businesses
• The payment service provider has a long list of prohibited practices, business models, jurisdictions, and regulated industries
• Generally, restricted industries and prohibited businesses are as follows: Businesses: Illegal products and services infringing on intellectual property rights, Products and services deemed unfair, predatory, or deceptive, Legal services, Products or services related to firearms, explosives, and dangerous materials, Marijuana, and Tobacco
• Industries: Financial products/services, Those regulated by the government, Pharmaceuticals and telemedicine, Tobacco

Reasons Stripe Closed Your Account

• The reason behind a frozen or terminated Stripe account usually falls under one of two scenarios:

Too many chargebacks

• Chargeback ratio is a metric through which financial institutions assess the risk level of businesses. If your business has a high chargeback ratio, financial institutions perceive it to be a high-risk business. Payment service providers avoid working with higher-risk businesses as it strains their relationship with financial institutions.

Complaints from customers

• The number of complaints against your business may be cause for a restricted or terminated account.

Reputation of bad business practices

• Stripe evaluates the financial risk of partnering with a business based on the reputation of the industry to which it belongs and its owner.
• If a merchant were to close its Stripe account, those disputes don't simply disappear. Stripe would be on the hook to cover any damages.

Engaging in prohibited activities

• Read the terms and conditions before signing up for a Stripe account. Stripe lays out exactly what businesses and industries they bar from their services.
• Even if you pass the approval process, Stripe may unexpectedly suspend or terminate your account at any time.

How Can You Start Accepting Payments After Your Stripe Account is Closed?

• If your Stripe account is terminated or frozen, take immediate action to start processing payments again.
• Stripe will send an email notification asserting that you have 30 days to prove that the activity resulting in your account termination is unfounded. If no agreement is met within the 30-day timeframe, Stripe may attempt to return any unused funds held in the account after deducting the associated fees.

Have a backup plan

• If you are unable to regain access to your Stripe account, it’s time to consider other payment processing options.
• Merchant service providers with experience servicing high-risk businesses are better equipped to deal with chargebacks, refunds, and fraud associated with higher-risk industries.

Closing Thoughts

• Termination of your Stripe account often comes with no warning or details as to why it happened.
• Emailing Stripe's customer support team may prove ineffective since they rarely reverse their termination decisions.
• Consider setting up proper credit card processing with an experienced merchant account provider.