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Stripe has decided to nuke my entire business

news.ycombinator.com

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Re: Stripe has decided to nuke my entire business

#251

Post by [deleted] »

iLoveOncall wrote: post #138
mikece wrote: post #125

Earlier quoted context omitted.

I was banned by PayPal once because I didn't sign up with an SSN or EIN and proceeded to make enough to trigger a review because they couldn't file a proper 1099-K on me. This was an oversight on my part and I offered to correct the situation by submitting any documentation they needed -- photo ID, SSN, prior year tax returns to PROVE that I was paying tax on the revenue coming from PayPal, the new LLC and EIN I had…

No, not legitimate at all. PayPal had banned me because I was under 18 when I opened my account, they then allowed me to open a new one (right after this one got suspended) and it has been working fine without any issue since then (10 years+). Stop doing shady stuff.

[deleted]

Re: Stripe has decided to nuke my entire business

#252

Post by vertis »

elliekelly wrote: post #239
vertis wrote: post #87

The worst part about these type of cases is not being able to get a straight answer. There is a whole subset of big tech that has taken the "you must be a fraudster therefore we can't unfuck the situation" approach to customer support. It's an arms race with fraudsters that eventually sucks in legitimate businesses.

I hate seeing comments like this because Stripe’s hands are tied here. Anytime a bank or payment processor has frozen or shut down an account and you’re getting stonewalled it’s almost guaranteed to be an AML related issue and it’s against the law for them to tip a customer off that their account is being or might be investigated for suspicious activity. This isn’t Stripe deciding that you’re a fraudster and so you’r…

Sure, and my experience is outside finance (more spam and fraud prevention).

Even if it is government under the hood you have to know what you're accused of. Not American so I doubt the US political system is interested in hearing from me, but I agree that's the only way of solving the deeper AML problems.

Re: Stripe has decided to nuke my entire business

#253

Post by gamblor956 »

vertis wrote: post #87

The worst part about these type of cases is not being able to get a straight answer. There is a whole subset of big tech that has taken the "you must be a fraudster therefore we can't unfuck the situation" approach to customer support. It's an arms race with fraudsters that eventually sucks in legitimate businesses.

It's the YCombinator startup way: scale large enough so that you don't have to worry about customer complaints until they threaten to go public and generate enough press to cause real damage.

But in all seriousness, being a YCombinator startup is now a big red flag outside of the VC-funded bubble. My current employer, and the previous one, have strict no-YC policy for SaaS due to numerous issues with previous YC companies. And these are both tech-friendly/tech-adjacent companies.

It's even worse at stodgier companies; an executive sees "Stripe froze my payments" and that's what they remember when a Stripe salesman tries to pitch them on using stripe for their online store. Stripe is quickly becoming Google, in the bad way: it's a name people are learning to avoid, and if that hits critical mass they're dead.

Re: Stripe has decided to nuke my entire business

#254

Post by guntab-dan »

ciguy wrote: post #203

I was recently banned from Paypal for life, with no reason given. I have literally used PayPal for over a decade, usually once or twice a year to pay family or friends back from something small. I have heard all the horror stories so I intentionally didn't use for anything unless the recipient had no other easy way to receive funds. I never used to pay for anything shady, or even buy anything really. It was almost al…

I work for a company that helps a lot of PayPal refugees. We hear these stories all the time. In many cases people know exactly why they were banned, but it's amazing how often they have no clue (like OP). Apparently these mystery bans tend to originate from automated systems, and there are too many automated bans for it human agents to be able to investigate them all.

While it feels like rule of the machines, it's actually rule of the fraudsters. If these payment processing platforms weren't so broadly vulnerable to fraud, they wouldn't need to rely on machines to make these critical decisions. An we can blame the credit card and ACH systems for both heavily prioritizing convenience over security via "pull" payments. Yes, crypto offers "push" payments, but those actually increase the risk of fraud for buyers. I think the killer combo is crypto with escrow, to protect buyers. But of course escrow has higher costs than just blindly transferring funds like the payment processors do. That's why this is one of those perennial problems of commerce.

Re: Stripe has decided to nuke my entire business

#255

Post by dangerboysteve »

caeril wrote: post #240
orionint wrote: post #121

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…

Costco Merchant Services did exactly this to us way back in the day( 2007-ish?). We switched from our previous merchant account bank due to better rates near the beginning of that year. Everything was fine, up until right after Thanksgiving. This was an ecommerce company, so a sudden 500% increase in authorization volume is pretty normal and expected. Well, not to Costco ( or rather, the bank whose services they were…

Costco or Elavon ?

Re: Stripe has decided to nuke my entire business

#256

Post by ryandrake »

WalterBright wrote: post #225
orionint wrote: post #121

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…

I also learned the hard way to never rely on a single payment processor. It was an expensive lesson. Of course, being thick-headed, I had to learn this lesson twice before it stuck. Always have at least two payment processors. If you've got a lot of money on the line, get a third lined up, too.

Yep, as I was reading OP's story I kept waiting to get to the part where he switched to his backup payment processor and life went on. My brain: "You do have a backup payment processor, don't you? Don't you??"

If you're running a business and you find that it is utterly dependent on some single point of failure, you'd think that would be something you'd want to correct ASAP.

Re: Stripe has decided to nuke my entire business

#257

Post by toss1 »

bagels wrote: post #10
mikece wrote: post #7

Earlier quoted context omitted.

Does it matter? PayPal and Stripe don't advertise that they will only do business with organizations with which they agree. To accept a business as a client for a mission critical service like payment processing and then summarily cancel or suspend service without notice should be able to be prosecuted the same as someone who vandalizes a physical storefront to the point they cannot open for business. This is non-tri…

It does matter if it actually violates the TOS, or could be vaguely interpreted to do so I guess?

NO, it does not in this case

They can determine up front if it violates the TOS

They can notify the customer of the SPECIFIC violation IN DETAIL, and what can be done to cure it, and provide time to do so.

They can deny access to the transaction instead of nuking the entire business for some algorithmic flag.

The Stripes and PayPals of the world do NONE of this. Instead, they act like they accept almost all businesses, get them dependent on that piece of infrastructure, then willfully trash the business on a whim.

Re: Stripe has decided to nuke my entire business

#258

Post by gingerlime »

BiteCode_dev wrote: post #159
brightball wrote: post #131

Stuff like this is why I think a business should have a system that abstracts away the payment processor. I use Stripe for invoices, but I can easily send an invoice through another platform if needed. For processing transactions on the web, I would always lean toward using a service like ChargeBee that allows me to setup multiple payment gateways. Getting off the ground quickly is one thing, but the moment that you…

And if ChargeBee bans you, you are still dead because that's a single point of failure. No, you should have several payment processors, and rotate them regularly to check they work.

Besides being a single point of failure, we tried to switch to ChargeBee and found them to be pretty lacking (to put it mildly). The platform looks nice and has lots of options, but under the hood things seem pretty fragile. Horrible docs, random 500 errors that weren't showing on the status page (and support ignored until more customers reported it), our Stripe gateway disconnected and the system still appeared to be working (partly, partly failing) with no alerts, plus lots of other odd behaviour. To be fair, all of this was on the test system, but we didn't feel confident to go live so we put the migration on hold. YMMV of course.

Re: Stripe has decided to nuke my entire business

#259

Post by spaceywilly »

brightball wrote: post #131

Stuff like this is why I think a business should have a system that abstracts away the payment processor. I use Stripe for invoices, but I can easily send an invoice through another platform if needed. For processing transactions on the web, I would always lean toward using a service like ChargeBee that allows me to setup multiple payment gateways. Getting off the ground quickly is one thing, but the moment that you…

Yeah my “business” (just a small app) uses a third party API for tracking packages. You better believe I abstracted that API and programmed to the abstraction, so in case I ever need to move off that API I can do it very easily.

It’s not just getting banned, they could change their pricing on you or just straight up close their doors. You never want your business to be totally dependent on another company. If it can’t be avoided, get on a service contract with them.

Re: Stripe has decided to nuke my entire business

#260

Post by mindcrime »

jandrese wrote: post #145
gfodor wrote: post #23

This is why we need a decentralized Internet payment system, like email. This was a non-controversial opinion not long ago.

A payment system like that would run face first into Know Your Customer (KYC) laws and bet shut down. This isn't a hard problem for technical reasons, it's all political. It's about preventing money laundering and trying to fight crime via financial instruments. But it also means any payment system that doesn't implement these restrictions will almost instantly be overrun by criminals because they are highly motivate…

A payment system like that would run face first into Know Your Customer (KYC) laws and bet shut down.

Great, then let's change those laws.

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