It can be up to 30% if they freeze your account for "suspicious activity." This is currently happening to someone I know who's had all of their November sales frozen. They say Stripe might return 70% of the funds... in February. They're trying to reach a human but no luck so far.
> This is currently happening to someone I know who's had all of their November sales frozen
Why on earth is this person not sweeping nightly into their business bank account? Never leave money in your processor account... they are not your bank!
This is the same stuff people complain about with PayPal - failing to realize this scenario (to this extent where it's threatening your business) is almost entirely the business operator's fault due to a severe lack of understanding of how to use a processor.
My guess is this person's processor account went from small benign numbers and then suddenly had a surge of business (possibly seasonal). This sudden increase in volume can (and will) trigger anti-fraud audits from your processor if you do not already have a well established history with them. You go through it, and move on. Generally it's not an issue if you sweep nightly!
Spread the word - your payment processor is not your bank. Sweep nightly, it's almost always a free service they offer.
Absolutely, payment providers block/suspend accounts left and right, and you're out of luck to find any humans to talk to. If you manage to find a human, 99% chance is that it triggered something in their "anti fraud" systems and then they'll simply state "We can't tell you why, and we can't unsuspend your account, sorry".
Best course of action I've found, is to build your initial MVP with one payment provider but as soon as you've validated there is a market and before you move on with other features, add a backup provider you can switch to at any time because chances are you will get blocked at one point. If not permanent, at least temporary.
If you're clever enough when you build the initial integration, you make sure to abstract out the specific payment provider so it's easy to plug in a new one. Shouldn't add too much complexity.
This works for normal payment processing, but Connect is something that doesn't have a viable alternative. Lago wants to abstract the Connect functionality and allow you to use Stripe Payments, Paypal, other processors, and get the Connect functionality to be open-source. Looking forward to their work and it is sorely needed.
If you have recurring payments, moving the payment methods over is a non-trivial amount of time and coordination to get done (and I'm not even sure how cooperative Stripe will be if you're on a fraud radar somewhere), and usually only involves the raw methods themselves, stuff like subscriptions you'll need to rebuild.
I don't think it's a bad idea necessarily, but it's very difficult to almost impossible to make this a "flip the switch" setup, particularly for SaaS businesses which are almost always recurring payments.
We're a largish Connect user and for us the key thing is just establishing good relationships with reps in the company and maintaining those. We've had a couple of customers run into freezes and other issues and while standard support is basically a brick wall in those cases, getting someone internal to escalate can be hugely beneficial.
I generally agree, but if you go through the process at your bank and get your own merchant account(it's a long drawn out process), then the risk for the bank/visa/mastercard/etc is much, much less, and you can generally always reach out to humans and get answers. It's worth the headache if you live or die on credit card payments.
Completely agree, that's why this Lago is interesting to me instead of using Stripe services. I'd rather use Stripe for the bare minimum so I can implement support for a backup provider as well.
This happens far too often. And because stripe handles the PCI compliance, you can't even take your customer's CC info to another merchant account. This is why people need to be using a PCI tokenizer like BasisTheory. Then you own the rights to the CC, without needing to handle PCI compliance, and you can switch vendors easily.
"dear auditor, i do not store the credit card number, only an unique index to fetch it at any time on this rest service. i promisse it is totally not the same thing"
good luck trying to make thay avoid compliance work.
For low risk clients, were the results different? Which platforms (First Data, Tsys, etc) and ISO (FDMS, Gravity, Bank of America, etc) were you seeing success with?
I don't think the average ISO has the knowledge let alone a published set of credentials to receive card data, the ISO industry really sticks to the tooling platforms provide.
More issues with ISOs than PayFacs. I can speak to one platform (a PayFac) that seemed to bat 1.000 here: Tilled. Not only did they seem to have no issue with migrating low risk clients but they likewise migrated dozens of mid/high risk firms without a single rejection from Tilled themselves or refusal from Stripe to provide the requested data.
Conversely, if you’re anything but the most plain jane business, I would avoid transitioning from Stripe to Gravity like the plague. I watched them reject a candy company and a knitting goods business that were both reputable, over a decade in business each, and never had an abnormal spike in sales or questionable products on offer. Gravity either couldn’t get Stripe data transferred or properly integrated and ended up turning away both businesses (while blaming them for noncompliance).
I work at Tilled and we appreciate the shout out because we have worked tirelessly to make this experience possible with Stripe migrations in particular. While it is ultimately up to the incumbent processor to release the data, from a technology standpoint there is nothing that stands in the way to make this possible, especially here at Tilled since we have built our own API's from the ground up.
If anyone wants to learn more about how Tilled works directly with ISO's who need a payfac solution for ISV customers email us at partners@tilled.com
No, the answer is that credit cards allow chargebacks for up to 180 days. Stripe or Paypal is betting on your honesty by allowing you to withdraw sooner. Stray out of their secret "safe" behavior allowed and they deem the risk too high.
Also... new accounts that experience sudden surges of transactions without well established seasonal patterns and account history are very risky for all processors.
The processor has to protect themselves from being used in some sort of Carding-Farm Scheme, has to protect other merchants from the processor being cut off by issuers (for having too many fraudulent transactions/chargebacks), and protect actual Card Holder's from fraud (since the processor/merchant ultimately are responsible for the chargeback).
People are always surprised when their new account with a few hundred a day in revenue suddenly surges to thousands a day in a short period, and the processor wants to investigate why...
Use the tools freely provided by your processor to protect yourself. Sweep the balance into your business bank account every single day - it's usually automatable and free. There is never a reason to store more than 24 hours of revenue in a processor account... they are not a bank!
Is there any processor which puts the funds to themselves, with the legal binding that unless customer charge backs I will get the money after the chargeback period? Seems like this could save payment processor with lot of headaches while reducing their fees.
