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.
Glad to hear! The question still remains why they didn't want your business in the first place and why are they changing their decision now. As a start up founder using Stripe, I would like to know.
If possible, please share what exactly made them change their minds. It is still concerning that this phone call did not happen right away (especially given the business-critical nature of the issue) - many new Web companies end up with a Kafkaesque customer experience despite seemingly fighting legacy corporate inertia and inefficiency.
That is terribly frustrating, but consistent. I see many posts like yours, you tried many of the normal appropriate communication methods and got no real connection. Not until it is public, and a possible public relations issue, did you get an nearly instant human response.
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?
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?
It makes me sick when things like this happen and they have happened on a smaller scale to me. I've tried to go through proper channels for support and get either no response or no help (Form letters and the like) and with 1 tweet I'm talking with a real human. I have no problem using Twitter as a bitching/calling-out platform because it's apparently the only way to get some companies attention.
I posted this because our company also uses Stripe and I wanted to get more community opinion on this matter. Hacker News has a way of always being relatively grounded on subjects.
This post should most definatly stay up. You shouldn't have to get this much attention to get access to funds that are yours and access to your payment processor. You had PayPal as a backup (oh the irony) and so you were not affected as much but what if your company didn't write the payment code and outsourced it and/or didn't have a fallback? You would have 5 days to pick, setup, implement, and deploy a new payment processor which is ridiculous and would probably force you to stop accepting orders for some period of time. If you didn't have the funds to pay coders you might have to shut your doors for forever. You got lucky (and it looks like Stripe is going to reverse the decision) but this just points out how dangerous it is to rely on only 1 company for anything (hosting, payment, API, etc) AND how companies are using automated processes more and more and giving "customers" little to no recourse if there account is shut off. This is not a Stripe only issue, we see this wil tons of companies like Google/Paypal/Facebook/etc.
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.
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.
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/ 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.
Maybe they have changed (we still use PayPal and haven't had anymore issues), but on Thanksgiving day a few years ago, they completely shut us off with no warning. At least Stripe gave a week. They also said all of our funds (which at the time was most of our cash...not making that mistake again) would be held for 6 months. We lost a week of revenue before getting reinstated after I finally got connected with a VP that got it sorted out.
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
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.
I believe the point made in the blog post is that 5 days warning for basically just kicking you out for no reason is not something you would expect of a business partner.
Stripe is a provider, yes. They can choose who to do business with, yes.
But the way to handle this is basically giving no recourse to the customer? I mean, like the post says, not even an email where you could at least argue your case for those times when there are misunderstandings at least?
I think it's not so much about kicking the off Stripe as much as the way they did it and how they left no alternative to these guys (except for public shaming, which apparently worked just as expected).
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).
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!"
Imagine if you build a platform around Stripe payments, and then having to rip it out and go with something else. If that's the case, five days is essentially overnight, if you have retask developers/hire contractors or do it yourself.
I have no idea what kind of transactions he was performing, and whether cutting him off is ultimately justified. What's concerning is a TOS agreement that provides no means of arbitration, with notice comes via an email (what happens if this goes in the spam filter?).
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.
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.
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."
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.
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.
Sounds like it's still an interesting cautionary tale. Looking forward to reading about what they told you!
Presumably, because your post is on HN. It would probably be best to keep it up. It's still useful to know, IMO.
You may want to put that as an update at the top of your blog post.
yes im doing that now.
Glad to hear! The question still remains why they didn't want your business in the first place and why are they changing their decision now. As a start up founder using Stripe, I would like to know.
If possible, please share what exactly made them change their minds. It is still concerning that this phone call did not happen right away (especially given the business-critical nature of the issue) - many new Web companies end up with a Kafkaesque customer experience despite seemingly fighting legacy corporate inertia and inefficiency.
I will write a new blog post this evening explaining it :)
Thanks in advance! These things help.
Kafkaesque... I like that word!
That is terribly frustrating, but consistent. I see many posts like yours, you tried many of the normal appropriate communication methods and got no real connection. Not until it is public, and a possible public relations issue, did you get an nearly instant human response.
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?
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.
It makes me sick when things like this happen and they have happened on a smaller scale to me. I've tried to go through proper channels for support and get either no response or no help (Form letters and the like) and with 1 tweet I'm talking with a real human. I have no problem using Twitter as a bitching/calling-out platform because it's apparently the only way to get some companies attention.
totally agree!
I posted this because our company also uses Stripe and I wanted to get more community opinion on this matter. Hacker News has a way of always being relatively grounded on subjects.
This post should most definatly stay up. You shouldn't have to get this much attention to get access to funds that are yours and access to your payment processor. You had PayPal as a backup (oh the irony) and so you were not affected as much but what if your company didn't write the payment code and outsourced it and/or didn't have a fallback? You would have 5 days to pick, setup, implement, and deploy a new payment processor which is ridiculous and would probably force you to stop accepting orders for some period of time. If you didn't have the funds to pay coders you might have to shut your doors for forever. You got lucky (and it looks like Stripe is going to reverse the decision) but this just points out how dangerous it is to rely on only 1 company for anything (hosting, payment, API, etc) AND how companies are using automated processes more and more and giving "customers" little to no recourse if there account is shut off. This is not a Stripe only issue, we see this wil tons of companies like Google/Paypal/Facebook/etc.
Can you go into details about why a financial organization requested this?
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.
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.
lately = entire history ;-)
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/ 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.
Yeah, paypal wouldn't give you the 5 days and they'd hold onto the money for half a year.
Maybe they have changed (we still use PayPal and haven't had anymore issues), but on Thanksgiving day a few years ago, they completely shut us off with no warning. At least Stripe gave a week. They also said all of our funds (which at the time was most of our cash...not making that mistake again) would be held for 6 months. We lost a week of revenue before getting reinstated after I finally got connected with a VP that got it sorted out.
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
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.
I believe the point made in the blog post is that 5 days warning for basically just kicking you out for no reason is not something you would expect of a business partner.
Stripe is a provider, yes. They can choose who to do business with, yes.
But the way to handle this is basically giving no recourse to the customer? I mean, like the post says, not even an email where you could at least argue your case for those times when there are misunderstandings at least?
I think it's not so much about kicking the off Stripe as much as the way they did it and how they left no alternative to these guys (except for public shaming, which apparently worked just as expected).
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).
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!"
Imagine if you build a platform around Stripe payments, and then having to rip it out and go with something else. If that's the case, five days is essentially overnight, if you have retask developers/hire contractors or do it yourself.
I have no idea what kind of transactions he was performing, and whether cutting him off is ultimately justified. What's concerning is a TOS agreement that provides no means of arbitration, with notice comes via an email (what happens if this goes in the spam filter?).
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.
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.
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."
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.
Hi everyone, I have published a new blog post on how we got our account back:
https://ultimatemember.com/got-stripe-account-back/
We've been on stripe for years. We tried issuing our first refund ever then Stripe booted us off with the same bullshit message