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Stripe can completely ruin your 6-figure business in one minute

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Re: Stripe can completely ruin your 6-figure business in one minute

#21

Post by pearjuice »

Setting up an automated paywall hosting system using a third party payment provider is honestly a minefield waiting to explode. The business owner knew this:

>Over time, this set up proved risky with legal liabilities. So last year I migrated to Stripe Connect’s direct charges model where customer payments would go directly into sellers' Stripe accounts

Sadly, he thought he could keep existing users on the old scheme:

>there were still legacy sellers that depended on Flurly for their living. Thus I "grandfathered" in these accounts and let them keep using the old Flurly system

So it was just a matter of time before one of these accounts were used for selling non-compliant things or doing illegal transactions. So it's not Stripe which ruined his business as the title indicates; it was one of Flurly's customers breaching Stripe's TOS and still being linked through Flurly's Stripe account. Only logical they shut him down, a risk the owner acknowledged in this blog post.

Re: Stripe can completely ruin your 6-figure business in one minute

#22

Post by Shank »

This is a way, way bigger deal for this service than Stripe. Dissecting the email Stripe sent, though, the issue is actually that a card network found them in-violation of something, and shut them down. It doesn't name the card network, but the card network assessed an illegal transaction fine, and, well, ended their credit card processing with all networks and processors.

> In addition, per card network rules, you and your business have been added to MATCH or another terminated merchant file operated by the card networks.

This is now a problem between Flurly and Visa/Mastercard/whoever decided to fine them. Stripe is really just delivering the bad news on-behalf of whichever network decided to bring the axe down. Also, obviously, being added to MATCH/TMF means that your business cannot process credit cards. Just...at all. It doesn't matter which gateway you use in this case. The same outcome would happen with Braintree or any other gateway.

Re: Stripe can completely ruin your 6-figure business in one minute

#24

Post by scrollaway »

nubinetwork wrote: post #23
rightbyte wrote: post #16

So essentially Flurly is a payment processor for small businesses running atop on Stripe (that is the same) that runs atop of Visa and Master Card. Go figure there will be problems.

[removed]

The business even admits they took on a ton of liability by not using Stripe Connect. They switched to Connect but grandfathered old accounts.

If you’re taking liability for what your customers do, you can end up getting fines like this. Stripe doesn’t want this. It’s not like they get the money from the fine, if anything they’re on the hook for it.

So, why again is this a scam?

Re: Stripe can completely ruin your 6-figure business in one minute

#25

Post by raverbashing »

rightbyte wrote: post #16

So essentially Flurly is a payment processor for small businesses running atop on Stripe (that is the same) that runs atop of Visa and Master Card. Go figure there will be problems.

And apparently with zero due diligence on what these small businesses are actually doing

Pro-tip: if your system is easy to be misused by bad actors, they will be most of your users

Re: Stripe can completely ruin your 6-figure business in one minute

#28

Post by nubinetwork »

scrollaway wrote: post #24
nubinetwork wrote: post #23

Earlier quoted context omitted.

[removed]

The business even admits they took on a ton of liability by not using Stripe Connect. They switched to Connect but grandfathered old accounts. If you’re taking liability for what your customers do, you can end up getting fines like this. Stripe doesn’t want this. It’s not like they get the money from the fine, if anything they’re on the hook for it. So, why again is this a scam?

As you claim, if they are a payment processor, then they shouldn't need another payment processor to handle money for them... their prospective customers could just use stripe directly.

Re: Stripe can completely ruin your 6-figure business in one minute

#30

Post by londons_explore »

doctor_eval wrote: post #20
drummer wrote: post #10

Should have been using monero. Hell, even bitcoin.

Seriously? With the ongoing crypto meltdown?

The meltdown is only in 'modern' things like nfts. Classic things like monero, eth, and bitcoin are chugging along fine.
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