

Stripe's list of prohibited businesses - hundsim
https://stripe.com/us/terms#prohibited-businesses

======
pc
I'm one of Stripe's cofounders.

There are a few reasons businesses end up on our prohibited list: they're full
of fraud (get rich quick schemes), legally regulated (guns, drugs), or
regulated by card companies (pornography).

In many ways, I'd prefer a world where Stripe's prohibited business list was
no more specific than that of a web hosting service, and didn't prohibit
anything beyond what's required by law.

However, there's an essential neutrality in the routing of packets that's
absent in the routing of dollars: credit card networks are emphatically _not_
neutral about the businesses they support on their rails. As such, no matter
what stance we might intrinsically want, the outcome is largely determined by
what Visa, MasterCard, etc., seek to enforce.

This might seem unfair, and the techno-libertarian in me finds the enumeration
distasteful and arbitrary. On the other hand, the card networks have
accomplished something very hard: _billions_ of people are willing to give
online businesses access to _arbitrary amounts of money_ , sight unseen. This
is an impressive achievement, and they pulled it off in part by minimizing the
number of bad businesses that exist on their network. So there's a trade-off.

Tl;dr: though we have some influence, we mostly don't get to set the rules.

~~~
t0
Do you enjoy being at the mercy of the credit card companies? How hard would
it be to remove them from the equation?

~~~
applecore
They're a company that makes it easy to accept credit cards on the web. How
can you remove credit card companies from the equation?

~~~
wmf
Some payment companies accept credit cards to reduce signup friction and then
try to switch users over to ACH to reduce fees.

~~~
greenyoda
Doesn't using ACH imply giving a company direct access to your bank account?
Credit cards offer all sorts of consumer protections that ACH doesn't have,
e.g., the customer can be immediately reimbursed for fraudulent transactions,
etc.

Not to mention that credit cards allow people to buy stuff they can't really
afford on credit. If you remove that ability, you'll be losing a lot of
potential customers.

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toomuchtodo
Compare to Braintree (VERY similar):

[1] We are unable to underwrite the following business models: (1) door-to-
door sales, (2) offering substantial rebates or special incentives to the
Cardholder subsequent to the original purchase, (3) negative response
marketing, (4) engaging in deceptive marketing practices, (5) sharing
Cardholder’s data with another merchant for payment of up-sell or cross-sell
product or service, (6) evading Card Network’s chargeback monitoring programs,
(7) engaging in any form of licensed or unlicensed aggregation or factoring,
(8) airlines, (9) tour operator, (10) age restricted products or services,
(11) bail bonds, (12) bankruptcy lawyers, (13) bidding fee auctions, (14)
collection agencies, (15) chain letters, (16) check cashing, wire transfers or
money orders, (17) counterfeit goods or any product or service that infringes
upon the copyright, trademark or trade secrets of any third party, (18)
currency exchanges or dealers, (19) embassies, foreign consulates or other
foreign governments, (20) firms selling business opportunities, investment
opportunities, mortgage consulting or reduction, credit counseling, repair or
protection or real estate purchases with no money down, (21) credit card and
identity theft protection, (22) cruise lines, (23) essay mills, (24) flea
markets, (25) drug paraphernalia, (26) extended warranties, (27) fortune
tellers, (28) “get rich quick” schemes; (28) gambling (including but not
limited to lotteries, Internet gaming, contests, sweepstakes, or offering of
prizes as an inducement to purchase goods or services), (29) sports
forecasting or odds making, (30) illegal products or services, (31) mail-order
brides, (32) marijuana dispensaries and related businesses, (33) money
transmitters or money service businesses, (34) multi-level marketing or
pyramid schemes, (35) online or other non-face-to-face pharmacies or pharmacy
referral services, (36) prepaid phone cards, phone services or cell phones,
(37) pseudo pharmaceuticals, (38) quasi-cash or stored value, (39) securities
brokers, (40) sexually-oriented or pornographic products or services, (41)
shipping or forwarding brokers, (42) substances designed to mimic illegal
drugs, (43) telemarketing, (44) timeshares, (45) travel agencies or travel
clubs, (46) online or other non-face-to-face tobacco or e-cigarette sales,
(47) weapons and munitions (48) virtual currency or credits that can be
monetized, re-sold or converted to physical or digital goods or services or
otherwise exit the virtual world, (49) personal computer technical support,
(50) human hair, fake hair or hair-extensions, (51) selling social media
activity, such as Twitter followers, Facebook likes or Youtube views, (52)
Telecommunications equipment and telephone sales, or (53) any product, service
or activity that is deceptive, unfair, predatory or prohibited by one or more
Card Networks.

[https://www.braintreepayments.com/faq](https://www.braintreepayments.com/faq)

~~~
nhangen
What's worse with Braintree is that they won't even touch Crowdfunding with a
10ft pole.

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kneisley
What is absurd about this? This seems to be a list of things where the law is
inconsistent across the various states in the US. Accepting these things would
likely place a severe state-by-state oversight and compliance burden on
Stripe, for very little actual value. It seems pretty smart to me.

------
rgbrenner
I think most of these are reasonable, and I immediately see why they are on
the list.

I think I know why this is on there:

"(10) age restricted products or services"

But wouldn't that also apply to every business that has a COPPA disclaimer in
its ToS.

~~~
kneisley
Even though I said it wasn't absurd, this does seem contradictory since they
seem to allow face-to-face tobacco sales, which are certainly age restricted.

~~~
johnny22
face to face is CP (card present) . it's far less prone to any sort of fraud
and IDs can be checked.

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j_baker
The only one on here that strikes me as odd is the prohibition on selling fake
hair or hair extensions. I'm curious why that is? I suppose I could see
prohibitions on selling human hair, but fake hair seems odd.

~~~
richardkmichael
Arg.. there goes my new startup idea. Foiled again. <rimshot>

Edit: Scrolling down reveals the answer,
[https://news.ycombinator.com/item?id=6188918](https://news.ycombinator.com/item?id=6188918)

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sdoowpilihp
A number of the items on that list are restricted due to legal limitations
and/or concerns. There are a multitude of regulations and requirements that
one would have to follow to collect payments on behalf of a legal entity for
any number of things on that list. It's much easier to just not deal with it.

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rhythmvs
(50) virtual currency that can be monetized, re-sold or converted to physical
or digital goods or services or otherwise exit the virtual world

Too bad, indeed.

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EScott11
Does someone more versed in the space care to comment? The title seems like
link bait, and I'd bet there are some not so absurd reasons for a lot of
these.

~~~
andrewcross
I don't know about a lot of these, but I run a travel startup so I can comment
about the travel agencies restriction.

Travel in general is seen as a high risk industry. Try going to a bank for a
merchant account, tell them you run a travel company and watch their reaction.
They don't really want you as a customer anymore. The risk profile is too
high.

There's a couple main reasons for this.

One, there's a higher than normal chargeback rate in travel. Think about this,
you get to your destination and find out that the online pictures of your
hotel are nothing like reality. You feel like you've been scammed, but the
owner refuses to give you a refund. You aren't left with a lot of options. But
if you booked with your credit card, you can request a chargeback and go stay
some place nicer.

This same idea can be applied to inclement weather, an inferior tour, etc.
Your expectations are different than reality, you can't get a refund, so you
request a chargeback.

Two, the average transaction size is travel is quite large. If I'm upset with
my dinner at a restaurant, I might be out $20. If I'm upset with my hotel on a
vacation, I might be out $500-$1,000. That's a big difference. I might be able
to live with losing $20, but definitely not $500+. So I go through the hassle
of a chargeback since the dollar amount makes it worth it.

Between the two of these reasons, you end up with a high risk industry.

I'd imagine all the other industries that are prohibited have similar risk
profiles.

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kpapke
Maybe by absurd it means the number of prohibited businesses? Otherwise it
just looks Stripe does not to be involved with shady/spammy businesses.

~~~
twistedpair
I'm not sure these are that spammy:

* personal computer technical support

* travel agencies

* hair-extensions

What all of them is the ability to be a scam, but any business can scam you.
Surprised fortune tellers aren't on there.

~~~
notatoad
Personal tech support would be a high-chargeback environment with very little
way to defend against fraud allegations. Travel agencies sell a product that
is to be delivered in a foreign country, which is a scammer's favourite
promise. And hair extensions... I guess that must be a high scam market, but I
don't know why. Being at the end of the list, I assume it was added after
experiencing a lot of issues with that type of business.

~~~
guan
Travel agencies also sell a product that’s often delivered much later, when
the agency or a supplier (hotel, airline, etc.) may no longer exist. This
increases the risk of chargebacks.

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sergiotapia
Would a service like Listia.com be against their terms of service?
Specifically these seem contradicting:

(50) virtual currency that can be monetized, re-sold or converted to physical
or digital goods or services or otherwise exit the virtual world

===

(52) selling video game or virtual world credits (unless you are the operator
of the video game or virtual world),

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andrewflnr
Funny, maybe, but not absurd, at least not in a way that's Stripe's fault. I'm
curious about the hair one. I wouldn't expect selling hair to be a real
problem. Is there a story that motivated that restriction? I notice it's also
in the list of Braintree's restrictions that toomuchtodo posted.

~~~
Sanddancer
The hair extension biz is chock full of fraudsters. Lots of people passing off
synthetic as real hair, etc.

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ChuckMcM
And no doubt, like contracts, behind every one of those there is a story ...

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guyrt
Does #10 mean vineyards are not allowed to use Stripe?

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fakename
fake hair is only one that stands out.

~~~
kneisley
It's an old link, but human hair and very realistic extensions are super
valuable, and nearly impossible to trace once stolen. Governments are trying
to de-incentivize theft by regulating the secondary market.
[http://business.time.com/2011/09/13/now-people-are-
stealing-...](http://business.time.com/2011/09/13/now-people-are-stealing-
human-hair/)

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sv3nss0n
This is totally in line with everything else that comes out of USA these days.
Logical and not surprising at all. But it makes me sad.

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ahoyhere
Why is it absurd?

Do you think it's absurdly long? Their agreement in general is much shorter
than any single one of the several I had to go through to get a merchant
account and CC processing service before.

Is it absurd because you think the business types they mention are silly?
Well, they are silly. But people do them.

Is it absurd because you are angry your business is on the list? Well, that's
life. I, as a valid business owner who uses Stripe, am very glad Stripe
protects their relationships / value / company / customer rep time by refusing
to serve illegal or borderline illegal businesses, and those with ridiculously
high rates of fraud. Yay!

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AsymetricCom
Why does this matter?

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TallboyOne
That's not absurd

