
Thinking of using Stripe for your startup? Think again - kylnew
https://ultimatemember.com/startups-avoid-stripe/
======
downandout
The real issue I see here is that these companies still have a merchant
underwriting process, but like to maintain the illusion that they don't. They
let you get started and become reliant on them, and then with a single email
can destroy your business. I would much prefer to go through an underwriting
process and either be officially approved or turned down _before_ becoming
reliant on any processor, because the underwriting is occurring anyway - just
at the worst possible time.

BTW, it's not particularly moving to me that they reinstated him _after this
hit the front page of HN_. Also, the 5 day "grace period" offered here is
meaningless because all of the funds will be held for 90 days. Since many
small businesses simply don't have a 3 month runway, for a lot of businesses
this email might as well say _" Stripe has decided to destroy your business.
Sorry about that."_

------
calumallison
Hey Kylnew, I am the author of that post. Just wanted to say that i've had a
phone call from Stripe 5 mins ago and this has been resolved. Not sure if you
want to keep this post up or not.

~~~
ufmace
That sounds even more disturbing - automated, robotic account cancellation and
dismissal of all communications regarding it... until you get a little bit
famous, and then you instantly get a human response. How does anybody think
that this is an acceptable way to do business?

The really sad thing is that I'd be more upset at Stripe if every other
business you deal with starting an internet company didn't do the same thing
over and over again. Never mind the ease of integration, are there any payment
processing companies out there who make it easy speak to a human being in
possession of common sense and the ability to make decisions if there is a
dispute regarding your account, without having to get famous first?

~~~
saganus
This is actually what I hate most about these stories.

Fortunately for the guys involved, when they post something and it goes
somewhat public then suddenly all companies are so eager to solve your
problems.

So what about us underdogs that really don't have anything remotely famous
enough to get their attention? We are screwed basically.

This really speaks loudly about Stripe that they kept sending canned responses
until the threat of public shaming was looming over their heads. Then they
suddenly are swift to solve the issue? even with a _phone call_?

Not cool.

------
RokStdy
I had a mixed reaction to this blog post. On the one hand it is helpful to
understand the risk involved with using Stripe for payment processing. I
presume, because Stripe wants to onboard users as fast as possible they back-
load some of the review process for new accounts. That's an obvious double-
edged sword and clearly impacted these guys negatively.

But, on the other hand, I felt that the tone was a little bit strange. Stripe
doesn't have to do business with you, or anybody else. It's not offensive to
my sensibilities that Stripe has it's own processes and concerns as it relates
to it's customers (not to mention regulatory requirements).

And this bit stuck in my craw "..So overnight without warning Stripe had
decided to stop us from using their services after 5 days.."

That email was your warning. You did, in fact, get a warning. You got 5 days
to change payment processors.

~~~
joshstrange
If you think 5 days is "warning" in this situation you either have never
written a line of payment processing code, are not a coder, or are horribly
misinformed. 5 days is NOTHING, they got lucky b/c they had a paypal backup
but if they hadn't they would have probably needed to stop taking payments for
a period of time while they re-wrote their payment stack. In 5 days they were
expected (note at least 1 of those days was a weekend) find a new processor,
get approved (not all are as fast as Stripe), link their bank account (2-3
days min), write code to use it, write tests (this is handling money after
all), manually test the different cases, and deploy it. Not to mention that
every other project those developers were working on have to be put on hold
(assuming none were more urgent). This is nothing to sneeze at and let's also
remember that the OP was doing nothing wrong (so much so Stripe has reversed
their decision). So just let that sink in, a company is given 5 days to
rewrite a substantial piece of their platform code or be cut off all because
of a false positive with no realistic way to communicate with Stripe (No,
email tickets doesn't cut it).

~~~
thaumaturgy
Right, that bugs me too. "We are disrupting the payments industry! So we would
like our customers to shoulder more of the risk in our market. We've decided
you're too risky, so drop everything you're doing right now and spend the next
few days finding a new payments provider. Thank you for choosing Stripe!"

------
thewhizkid
Biggest problem with payments startups (Square, Stripe) is their unwillingness
to scale out their operations (i.e. call centers, live customer support)
proportional to their business. So a lot of it becomes as automated as
possible through use of flawed analytics/machine learning and then email-only
support, which I agree is unacceptable when you're dealing with potentially
large sums of real money as a business owner.

------
fragsworth
You know, for all the flack Paypal has gotten, they've been pretty great in my
experience.

We're using Paypal for our web game at
[http://clickerheroes.com/](http://clickerheroes.com/) and we have a pretty
high number of disputes and chargebacks compared to average businesses (for
obvious reasons, people want to get the paid stuff in the game for free).

We got a call from Paypal once when they noticed this, and they just wanted to
know the reason for the high dispute/chargeback rate. I explained it to them,
they understood, and that was the end of that.

Maybe the bad PR they used to get has made them change their ways. I doubt
they'd ever do anything like what Stripe just did to the OP.

~~~
joshstrange
> I doubt they'd ever do anything like what Stripe just did to the OP.

What? Like locking up someone's funds for a long period of time? Cutting
people off with little to no notice? Yeah, PayPal would NEVER do something
like that. /s

------
orthecreedence
I really wonder if the name "Ultimate Member" had something to do with it
("member" being a euphemism for "penis"). Maybe someone saw the name and
instantly tagged it as a porn site? I know the UK has had a weird relationship
with porn lately.

~~~
xacaxulu
lately = entire history ;-)

------
mdekkers
Getting paid is fucked. In total, our "getting paid" process is ridiculously
expensive, and the % here, % there being skimmed off the top by all players is
really biting in some cases. When you are charging a few bucks for something
it doesn't seem to add to all that much, but we typically have lower volume,
higher amounts type payments, and on average, or "banking and financial
transactions" cost line on the P&L runs between 15% to 20%. Having to pay that
much money just to manage my money is rather upsetting.

Add on to that the idea that processors like paypal, stripe and the like
basically hold you by the short and hairies and can at any point _destroy your
business_ by saying "we don't like something, we are cutting you off and
holding on to your cash" is disturbing.

We really need a better alternative. Practice has shown that Bitcoin isn't it,
so far.

------
calumallison
Hi everyone, I have published a new blog post on how we got our account back:

[https://ultimatemember.com/got-stripe-account-
back/](https://ultimatemember.com/got-stripe-account-back/)

------
joshmn
When you're developer-focused processor that integrates tightly with a website
(Stripe) instead of providing a platform (like PayPal), your fraud protection
can only go so far.

Stripe has taken steps to improve their fraud protection, but as someone in
the field of protection, I can say that I'd happily take PayPal's over
Stripe's.

------
edoceo
We've been on stripe for years. We tried issuing our first refund ever then
Stripe booted us off with the same bullshit message

------
juliangregorian
It's infuriating and borderline criminal that these kinds of companies are
able to put a hold on all your funds at their whim. One of my previous
startups lost several days of income for good when Google Checkout decided our
business wasn't acceptable to them.

