
Stripe's 210 Day Hold Practices - stripesucks
https://www.indiehackers.com/post/stripes-210-day-hold-practices-yes-you-read-that-right-a77dba9917
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rgbrenner
This article is crap. Won't tell us even what industry their startup is in...
If I had to guess, it's for good reason: it's probably on Stripe's list of
prohibited businesses. (And this isn't really a list Stripe created.. it's all
from Visa and MasterCards card rules that Stripe is required to follow.)

Then they continue with: _it also hides behind federal regulations like KYC
(know your customer) and the Patriot Act as a justification for requesting
more documents_

Yes... those laws apply to Stripe. That's why Congress created those laws. No,
stripe won't commit a felony for you or help you evade those laws.

Then he ends it with saying he works at a bank... and everyone should use a
merchant account instead (everyone should use the product his employer sells..
no issues there).

Hey guess what: all of those laws you mentioned and prohibited businesses...
those apply to EVERY merchant account whether it's at a bank or Stripe.

I'm guessing this is his first merchant account, and he didn't read the
contract (if the startup exists at all). For those of you in a similar
situation, here's my advice (and not just for Stripe): read the contract and
abide by the rules. If you can't, don't have your customers deposit thousands
of dollars into it, and then violate your contract.

~~~
stripesucks
I did state "a small startup in the infoservices space" within the first
couple of sentences, but I apologize if that was insufficient. If you'd really
like granular details, it was a vehicle history report website. Completely
mundane and most certainly not on the prohibited businesses list.

And I wasn't complaining about the documentation requirements. I was
complaining about the fact that they weren't reviewing the documents, and used
them as an additional barrier to block payouts.

As for the bank point -- I work for a consulting firm, and the client I'm on
is a large US bank. I do not work anywhere near their merchant services
division. I don't receive any sort of commission when someone signs up for
their services, and I didn't mention them specifically here. Really don't know
what else there is to say on that point.

~~~
kristianc
It’s also worth remembering that running to social media and blaming ‘big bad
Stripe/PayPal/Monzo’ for holding funds is part of the MO of fraudsters so it’s
right that posts like these are treated with at least a reasonable degree of
suspicion.

Having worked with companies in the fraud monitoring space I’d say that it’s
likely that your case (new Stripe account starts taking loads of money for
digital infoproduct) has fallen foul of an AML flag. The timeline for that is
largely out of Stripe’s hands, but there are certain (legal) limitations on
what you can be told about your case.

Rest assured though, it’s more trouble than it’s worth for Stripe to
arbitrarily hold your money for no reason.

------
CaliforniaKarl
On the one hand...

“a small startup in the infoservices space” is very vague. I wouldn’t be
surprised if Stripe had some reason to be concerned. I’m not sure if it was
explicitly mentioned in the post; how many chargebacks did you get, and how
many refunds did you have to issue?

To me, without more background, the post strikes me as being overly
sensational.

On the other hand...

It concerns me, assuming the references to Stripes T&Cs are accurate, that it
is stacked so heavily in Stripe’s favor. At the very least, Stripe should be
paying reasonable interest (say, the Prime rate) on the funds that it is
holding.

It is getting tiring to see stories of incidents like this. Of T&Cs with
draconian provisions, little transparency, and no followup. But I don’t mean
that to say the stories should be removed from HN.

~~~
kristianc
> At the very least, Stripe should be paying reasonable interest (say, the
> Prime rate) on the funds that it is holding.

If Stripe suspects AML, it certainly shouldn’t be paying interest on the
funds.

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patio11
Hiya. I work at Stripe. Mind emailing patio11@stripe.com and humming a few
bars so we can look into this for you?

~~~
packetized
That you would have to communicate this to a customer via HN is pretty
damning.

~~~
nixgeek
Au contraire, I sincerely appreciate the personal touch. Probably nothing to
do with them, but he’s offered a conduit for them to send additional details,
and committed to looking into it. That’s more than OP seems to have got
through official channels.

Every company of some size has “WTF” edge cases, IMO it matters how we handle
them, even if sometimes handling it takes an unusual or unofficial form.

~~~
packetized
The fact that the OP had to resort to unofficial channels to get satisfaction
is the problem, full stop.

------
SpicyLemonZest
Come on, this is the worst kind of drama boosting. An account named
"stripesucks" posts a link to an article written today, discussing the
author's individual billing dispute with Skype and urging everyone to use a
specific named competitor, and it's on the front page?

~~~
stripesucks
I didn't use a specifically named competitor. I simply stated "direct merchant
account." Authorize.net is not a Stripe competitor, it's a gateway, not a
processor.

~~~
rgbrenner
Stripe is just a bundled merchant account + gateway. It isn't like you can
break up the bundle, so Authorize.net is losing a potential customer each time
a business goes to Stripe. So I would say they are a competitor who works with
partners (merchant account providers) to provide the same service as Stripe.

~~~
campfireveteran
I used Authorize.net circa 2010 at a large cell phone manufacturer for
processing micropayments. They changed their API without notification and it
broke payments for a few days, and it was really crappy considering they were
supposed to be a "big dog" in the industry. Any changes were supposed to
happen first in their staging environment and our test-suite ran against it to
make sure it still worked before it was signed-off to be deployed into
production.

Also, when I was in the UK, getting a payment processor (we had our own
merchant accounts) pre-Stripe was a royal PITA. They wanted all sorts of
documentation and proof that we were a "real business" before letting us
process payments.

TBH, it seems like Stripe and PayPal are being pushed by "risk management"
corporate suits into being unreasonable and treating their customers like
United Airlines' passengers. A few years back I would ordinarily point people
over to FeeFighters' Samurai to shop the best deals on payment gateways, but
GroupOn decided to buy them and make them commit seppuku.

------
elliekelly
This sounds like an AML or OFAC issue. I’d guess this has nothing to do with
Stripe. AML laws in the US prohibit the financial institution from giving the
customer basically _any_ information about the reason for the hold.

This leads to (understandably) frustrated customers.

------
amirhirsch
It seems like the primary issue is the lack of a single human account manager
maintaining consistent communication while your cash is held in reserve.

Perhaps the law should change to require interest paid for funds held in
reserve accounts. This could prevent conflict-of-interest between fraud
prevention and holding money to collect interest. Perhaps Stripe should offer
interest and push for this law change since it will further contrast them with
PayPal as the good guys.

I had a similar experience with PayPal reserves and enjoyed poor communication
and arbitrary reserve extensions after a six figure spike in sales. I
complained to the state banking authority when they deducted refunds out of my
bank account instead of from their held reserves — PayPal was clearly in the
wrong and they corrected it after numerous phone calls, while still holding
our funds in reserve. The CA banking regulators proved incompetent.

------
ping_pong
I used to work in payments. There's a lot of info that the poster is willfully
not posting, so I believe it's probably something to do with her business, or
something she did to trigger the fraud alert. For example, why did Stripe hold
the funds instead of refunding the money back to the customers and cancelling
all the transactions? There's a story to be told here and she conspicuously
ignores this. There is a LOT more to this story than what the poster is
reporting on so until more details are given, I think it's probably something
the poster did that triggered fraud alerts.

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tomc1985
Why is it so hard for these tech firms swimming in cash to hire and keep a
live, human customer services team?

~~~
xiphias2
Customer services don't scale (only linearly). There's a reason why these
companies are swimming in cash.

------
hypewatch
Indie hackers is owned by Stripe so it’s interesting OP decided to write their
post there.

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segmondy
They are pretty much holding the funds till it's no longer subject to card
dispute/chargeback.

~~~
stripesucks
As explained in the post, it's been 180 days, which is out of the window in
which customers can even file disputes.

