Should Startups be avoiding Stripe? How We Got Our Account Back

Share on

Update: This post was initially written in 2014. Within a couple of hours after the post was published we were contacted by a number of employees at Stripe and got our account restored. The account has been in good standing and we've had no difficulties since. Go to the next step.

The Reasons We Choose Stripe

We've heard lots about Stripe in recent years however, as an European firm, we were unable to sign up for a long duration. Then they began accepting UK companies with their headquarters in the UK. We've been a large volume PayPal user, in both a transactional mode as well as a buyer from 2007 and have had over a million dollars traded on the platform. We've had our fair share of disputes as well as lengthy conversations with the PayPal customer support, but there wasn't anything unmanageable.

1. Their reputation, a lot of customers tell us they'd prefer not payment through PayPal, at all costs.

Signing up is simple however you must submit a number of paperwork, which is understandable. In the meantime, you're waiting on confirmation of your account, you can already start building your client for their API and they have libraries available for the most popular languages. These have been written on the basis of modern programming standards and as consequence it's a breeze to work with. It's no surprise, as Stripe was created out of the anger of their founders with payment processors available in those days, they were determined to shake up the market.

The result was that The API does not feel as if it's simply an extra feature, as it does with PayPal It's an absolute joy to use. Setting up and starting to receive payments with Stripe is easy.

Then the Problems Start

As the number of our transactions increased, so did the criminal activity. It's also odd that there was only one exception (who attempted to use a account for email spamming and was caught and banned in no time) all the stolen fraudsters with credit cards simply were looking to get us the money and then do nothing, it just seems illogical to me. If they had wanted to check a bunch of cards, they could have completed it by using a service which costs around $1 If they had the desire to make use of it for spamming or for something else what's the reason they didn't even try it?

Unfortunately, Stripe charges a chargeback cost of $15, so we had to pay for every transaction which, to my mind, ought to have been prevented by Stripe even before they happened. As an example, there was an individual who utilized the same email address, and tried cards from 3 different countries in just 15 minutes. If he's not the Flash, that's not really an option and is a massive warning to all processors I've heard of, but Stripe hasn't even blinkered.

As we had been losing money as well as Stripe wasn't providing any help to stop these whatsoever so we decided to find a firm that specializes in online fraud prevention. Below are some of those we've heard good things about but haven't had the chance to try them as of yet: minFraud by MaxMind, Sift Science and Signifyd. The prices are very reasonable, even for small-sized businesses. I'm really not exactly sure what the reason is. Stripe hasn't signed a deal with any of these companies This seems to be it's a simple decision for me.

In the midst of the development of the services mentioned above, one night (and I'd like to underline this night portion) we received an email sent by Stripe from out of the blue, that stated:

Hi,

Thanks for signing up with Stripe!

We regret that at the moment, we will need to stop providing support for .com. Currently, Stripe can only support customers with a lower chance of disputes with customers. After looking over your submissions as well as your site, it may appear to indicate that your site has more threat than the ones we currently support. We are not able to take any further payment on behalf of you.

And that was it.

I'd like to stress that none of our genuine clients ever complained about anything except for the owners of credit cards demanded a refund through their banks. That's the normal thing to do. However, what I didn't however, anticipate from Stripe regardless of the situation was to shut down our account in the late at night, without any notice at all. And they'd be unable to assistance. This is in face of everything that we had to go through with Stripe before this.

They could've offered us suggestions on how to minimize frauds or what we should have done differently in our application or any other thing. Also, a reminder like "if the situation continues to escalate the account will be closed close your account" for a few weeks before the final decision would've been nice, too. And, of course, they're not even responding to queries about the issue. This is a great case study of how not to deal with customer complaints.

Are we having a problem? After searching for answers on Google for a bit it appears that this is an common way of doing business at Stripe today. See here, here, here and here. If you're looking for more, just do a Google search and pay close focus on the comments sections.

It turns out that we're blessed as we're able to have skilled programmers, and can move to another API quickly. When everyday people who sell or ship physical products are victimized, it may ruin their whole business and sometimes the lives of their customers as well (as we've seen in the articles linked above). The thought that having an effective fraud detection system can solve this problem, and yet, they fail to do anything about it is mind-boggling.

Takeaway

In the past, Stripe was just a startup happy for all new clients. They determined to change the method by which PayPal dealt with customer service as well as business overall. A few years in and they've become the same business with no face. While it's not easy when you grow, you should never lose sight of your initial goals so that you can keep up with your goals and offer the same value to customers that they have signed up to in the first place. This is the primary takeaway for all those who deal with customers including .

If you're starting a business which you'd like to run for an extended period of time, do not forget that your current small clients (and I'm certainly not confident enough to think that we're any other way than small in Stripe's eyes) are able to grow massively within a matter of minutes, and all, it's the Internet we're talking about! The world is in the era of hyperscaling.

Additionally, it is essential that when you start a business, you offer different payment options to your customers. Not everyone likes PayPal but not everyone trusts online merchants with their credit cards. Then there are those who like using Bitcoin. If you're starting a business nowadays it's better to prepare for the "next biggest trend". Bitcoin might be one of those.

We hope Bitcoin (or something else that is based on the foundation laid out by Bitcoin) is accepted by the mainstream within the coming years. it makes all this so easy (no disputes, no chargebacks and incredibly low charges). For now though we'll talk to a couple of other credit card processing firms (but we're leaning toward Braintree) as well. We'll update this post when we've found a solution. We can, for now, advise you to stay far from Stripe and their ilk. great startup they once were.

The Follow-Up - A Few Hours Later

Everybody makes mistakes. We're just a small hosting company, yet we do make occasional mistakes, I can imagine how difficult it could be to look after hundreds of thousands of customers. That, though, is not a reason to be excused, you have to be proactive when you fail, acknowledge it and learn from it.

It's precisely what Stripe did and I'm happy to say that we got the account reinstated and a lot of friendly people from the business have reached out to us and ensured that we didn't be left out. I even had the chance to speak to Patrick Collison, the co-founder of Stripe as well as Andy Young, director of Stripe's UK division. They're building a company that is valued around one billion dollars, yet they took the time to contact us personally, now this is exceptional customer service.

If you're handling lots of customers, it's essential to maintain the (high) degree of automation or you'll need run a support team so large that it could fill a city. Automation is never perfect and as someone who spent five years within the search engine optimization (SEO) business I'm used to getting screwed by an algorithm.

In Google's case, we were used to not having the ability to connect to anyone and our only option was to get up and start again. But, I wouldn't expect the same from a company that is a client that we pay of. This is the thing that hurts me most to me: having trouble getting help for your problems or the absence of communication from your business partner.

Takeaway

If you're dealing with clients directly, customer care is crucial, more so in the modern days of social media. Stripe is not the only payment processor available online, and just as they used to be in the shadows of PayPal (which was not able to provide enough customer support, making it really hard for developers to incorporate their services) they can be knocked out by a current or new competitor, which may offer more support or a superior product with the same price levels. In the modern world of connectivity, the giants are growing and falling every day.

There is a proven fact that negative reports and news have a tendency to spread faster than good ones. The key is to be on the lookout for the social media channels as closely as you are able to. The discussion about your brand will continue to be discussed whether you want it or not. Your only way to stay in the loop is to be a part of it or go in the opposite direction and pretend that social media does not exist. Now if you'd like to create a lasting business it's not really a decision to make.

In order to a startup to succeed according to me, you have to have three factors: outstanding support, one of the best items (or services) in your niche as well as a price that is competitive.

Support for customers is crucial, however. It's possible that the company's founders as well as the management weren't aware of the problems customers face when trying to reach the help desk. Also, it is possible that unintentionally and immediately account closures happen at all. It's important to directly ask your customers for their feedback each often and to collaborate with them in order to improve the quality of your product.

The industry is in (web hosting) has a reputation for poor customer care. It seems like in the earlier days it was easy to build an okay(ish) server, put as many clients on the server as you could, then take their money and when they complained that you didn't care, they felt like they didn't have the right to assistance because it was so inexpensive.

Summary

Like I said earlier, we really love Stripe. As the chief developer of our team, I'd have to say it's the best thing that occurred to online payment in the past ten years since PayPal. It was a mistake they made, maybe a tiny one for them however, a major one for us and when I pointed it out to them, it they owned up to it and did everything they could to correct it. I'm glad to have them as a business partner.