What To Do When Stripe Shuts You Down

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Stripe is an American online payment processing platform whose parent company by the same name operates out of San Francisco. Among its customers are big names like Uber and Google. The platform also caters to smaller businesses across over 30 countries.

While Stripe has generally been lauded for their reliability, the problems of a large company have certainly become more readily apparent of late – more and more merchant accounts are finding themselves mysteriously (and abruptly) shut down. 

Ready to move on from Stripe? Check out EMC2 Billing.

Why Stripe shuts down merchant accounts

The terms and condition of Stripe says that the company reserves the right to terminate business accounts that they believe pose an elevated financial risk or legal liability. They also reserve this right in violation of bank or card network policies. They can also suspend any pending payouts if they deem it necessary to take such action.

Many start-ups are taken by surprise when Stripe shuts down their accounts without fair warning. Be;pw are some of the most common reasons accounts are shut down:

Prohibited activities


Businesses that deal in any of the platform’s prohibited or restricted activities will get shut down. If one is to continue operating a Stripe account while undertaking any of these business ventures, they must receive prior written approval from the company. Some of the businesses include 

  • any multi-level marketing schemes
  • High-risk businesses like remoter technical support and travel reservation services
  • Any businesses dealing in drug paraphernalia and illegal drugs
  • Charities without proper registration
  • Business with foreign consulates and foreign governments
  • Pseudo-pharmaceuticals
  • Virtual world credits
  • Aggregation
  • Mug shot publication
  • Adult content and services
  • Counterfeit products
  • Gambling
  • Virtual currency
  • Money and legal services
  • Credit services
  • Investment services

These are all businesses that will get shut down by Stripe without receiving express permission. Businesses who partake in these endeavors without authorization may even lose the funds in their Stripe accounts.

Chargebacks

Having chargebacks posted on an account is a huge red flag for Stripe. A chargeback occurs when a bank returns money directly to the payer. With chargebacks, the customer is technically asking the bank to forcibly take back the money from the business’s account without the customer having to return what was purchased. 

This raises a red flag for Stripe because the poor reputation of a merchant reflects negatively on their business, not to mention they are losing money.

High dispute rates

Stripe is also very vigilant about the dispute rate of the merchants they work with.  A high dispute rate will cause an account to be shut down. Just like with chargebacks, the best way to mitigate the disputes is to provide exceptional customer service. Stripe is always re-evaluating businesses to see with whom they can continue to work with. High dispute rates can negatively affect a business’s reputation as well.

Avoid future shutdowns with EMC2 Billing.

What To Do In Case of a Shut Down

Unfortunately, once Stripe shuts down your account, it is more than likely that it will never be re-opened with this MSP. This has been the trend with all the merchants that have had their accounts closed. So instead, take steps to prevent future shutdowns.

This entails being very responsive with clients, especially when communicating about anything that raises a conflict. It’s a frustrated customer who will be pushed over the edge to demand a chargeback. If your customers are generally satisfied, they’re more likely to resolve matters with you (the vendor) directly.

Also make sure that the refund policy is workable for all partied involved and will leave the customer feeling happy. 

Make sure one’s business has an efficient system in place that quickly updates cancellations to prevent racking up chargebacks. Trying to reopen your account with Stripe may be time consuming. Plus, similar issues may arise in the future.

Alternatively, one may need to find an alternative platform to continue doing business. At EMC2 Billing, we offer merchants equally amazing features while protecting them from chargebacks and fraud. Because we specialize in serving high-risk merchants, we’re well-equipped to handle your needs. Plus, we can approve you in no time – as short as 24 hours.

Most people today are starting to opt for a dedicated merchant account.

The dedicated merchant account is an account that the account solutions provider exclusively establishes for merchant’s business. It works like a personal, internet-based bank account created solely for one’s online business. A dedicated merchant account allows the merchant to process online debit and credit payments. The funds from the merchant’s payment gateway are funneled into the merchant account then automatically routed to the business account.

Final Note

Stripe remains a popular online payment platform, certainly giving PayPal a lot of competition as they climb aggressively up in market share. However, their policies can be very stringent and they also tend to leave little wiggle room for making one’s case when an account gets shut down. At the end of the day, the best one can do is take steps to make cancellation processes fair and transparent, manage their username fairly and minimize chargebacks however possible. When Stripe shuts you down, get started with EMC2 Billing and do what you can to prevent fraudulent purchases in the future.

More to explore

How to Prevent Chargebacks

As more and more transactions are carried out online, instances of chargebacks are growing along with it. Providers flag many merchants as

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