Few situations induce immediate stress for online businesses like receiving a notification that their Stripe account has been closed.
Let’s be real – when Stripe hits pause on your account, it’s an emergency that threatens your entire revenue stream. Whether you’re running a SaaS platform, an e-commerce store, or any other online business, having your payment processing cut off is like having your business’s oxygen supply suddenly shut down.
Don’t worry, we’ve got you covered. Our guide will not only help you understand why Stripe may have suspended your account but also provide a roadmap for reactivating it or finding alternative solutions.
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Why is my Stripe account suspended?
If you logged in today to discover “Stripe suspended my account!” you want to start by figuring out why. These are the most common reasons for a Stripe account shutdown:
Excessive Chargebacks
If you have a high chargeback rate and/or get a lot of disputes, then your Stripe account may be at risk of being suspended.
This is one of the most common reasons for account suspension. If you have too many chargebacks, then Stripe may temporarily or permanently suspend your account until you can reduce your chargeback rate. If you get a lot of disputes, then it’s a good idea to reduce them.
If you’re getting hit with frequent chargebacks or customer disputes, Stripe will definitely take notice. While they don’t publicly share their exact threshold, they recommend keeping your chargeback rate under 0.9%. Luckily, there are many ways to manage and reduce chargebacks.
Geographical Inconsistencies
If you’re accessing your Stripe account from a region that isn’t registered as your region of operation, Stripe will suspend you.
For example, if you’re in the United States but accessing your Stripe account from India, this is considered a remote operation and could get your account suspended.
If you need to access your Stripe account while traveling, then that’s okay. But Stripe needs to see that you’ve accessed the account in your home country first. If you suddenly start processing orders on day 1 from abroad, that looks suspicious.
High-Risk Business
Some businesses are considered high risk by Stripe and therefore cannot use their service. Actually, you’ll find that many of the most common ecommerce industries are considered high risk, like coaching, supplements, dropshipping, travel, and digital products.
You can discover more about high-risk businesses here. If you fall into any high-risk category, we recommend you stop relying Stripe ASAP.
High Sales Volume
If your sales volume reaches $25k/month, Stripe.com will suspend you. This is the moment where Stripe sees your business as a liability. You’re selling too much, and they need to investigate before clearing your business for further processing.
At this time, Stripe will start the due diligence process. When you signed up initially, you didn’t have to provide much detail about who you are and what your business does. That’s Stripes super power: approving your account in seconds with no hassle.
Now that you’re making money, Stripe needs to provide you with a real merchant account, and they don’t support all businesses.
To avoid any issues, Stripe will close your account with no warning.
Unusual Transaction Patterns
Stripe’s algorithms are constantly watching your transaction patterns like a hawk. They’ll raise red flags if they spot things like sudden spikes in high-value transactions, multiple transactions from the same source, or an unusual surge in international payments.
Think of it as Stripe’s version of a security camera. If something looks off, they’ll investigate.
Policy Violations
Stripe takes their terms of service seriously. Common violations include misrepresenting your business, selling unauthorized products, or operating without proper licensing.
They’re especially strict about businesses that might promote unlawful activities or harm to others.
Prohibited Business Types
Some businesses simply can’t use Stripe, period. This includes companies dealing in illegal goods, fake IDs, certain controlled substances, or telecommunications manipulation equipment.
If your business falls into any of these categories, Stripe will shut down your account as soon as they discover it.
Still have questions? We can help!
Can Stripe take money out of my bank account?
Yes. If you have an outstanding balance on Stripe, they will withdraw the amount owed from your bank account. It will appear in Stripe as a negative payout (you paying them, not them paying you).
If your account is closed due to excessive chargebacks and the money held in your Stripe account is less than what’s owed to pay those chargebacks (plus fees), Stripe will take that money from your connected financial institution.
Generally, at this time, you don’t have much access within your Stripe account. Meaning, you likely won’t be able to remove your connected bank to avoid a debit.
Can Stripe hold your money forever?
Stripe is an online payment processor, not a bank. This means that they cannot hold onto your money forever. Instead, they hold it for 180 business days (about 6 months) and then transfer it to your account on day 181.
The 180-day period is to cover any costs that might accrue due to refunds, returns, fees, and chargebacks. Since you aren’t pulling in new money on your Stripe account, they need to ensure there are ample funds in case they’re needed.
If you’re worried about Stripe closing your account before you can access all of the funds in it, don’t worry—they can release any remaining funds to you over time instead of making you wait until after 180 days have passed.
What does Stripe consider a high-risk business?
If you’re in one of these industries, Stripe may not approve your application. However, there are other payment processors that are more lenient when it comes to working with such businesses.
Some of the most common prohibited businesses are as follows:
- CBD and paraphernalia
- Adult content
- Dietary supplements
- Alcohol
- Gambling
- Coaching and advice
- Dropshipping
- Subscription business models
- Travel
- Digital goods
- High-ticket items
Two of these entries—subscriptions and high-ticket items—aren’t a business type, but rather a pricing model. Stripe does not support these, either. So if you have a traditionally low-risk business but price your products over $1000 or offer subscriptions, you’ll be categorized as high-risk.
In a high-risk industry? That’s our expertise! Let’s chat.
How do I start accepting payments again?
Understanding why your business is suspended helps, but there are steps you can take right now to get payments back up and running again.
Emergency Payment Solutions
When your Stripe account gets suspended, your first priority is getting back to accepting payments ASAP.
A PSP is a payment service provider, like Stripe. They are easy to open as there are no due diligence requirements at the start (which is why they’re good for startups and as backup accounts). So you can either open an account at:
- Stripe
- PayPal
- Square
All these providers operate similarly to Stripe. Your account will be shut down on these platforms as well, so don’t think of this as a permanent solution; it’s just to get your business running again ASAP. These platforms are ideal for immediate relief because they have minimal upfront due diligence requirements, letting you start processing within hours.
You need a way to start accepting payments and credit card processing again, and this is the only way to do that within 24 hours.
Long-term Payment Strategy
While a 3rd Party Payment Provider will work in the interim, you’ll need a more permanent setup, especially if you’re in a high-risk industry. Here’s how to establish a stable payment processing foundation:
First, determine your Merchant Category Code (MCC). This four-digit number classifies your business type and helps identify which payment processors are best suited for your operations. Your MCC will be assigned based on your primary business activities, so be precise when describing your business model.
You will likely fall into several MCC categories. As long as you can legitimately back up why you fit into the code you’ve chosen, you should be approved. Each code comes with different benefits and drawbacks.
Next, seek out processors that specialize in your business type. A high-risk merchant account provider like DirectPayNet is likely a good solution for your online business if you’re being flagged by Stripe.
Remember that mainstream providers like PayPal or Square often skip detailed underwriting, which can lead to sudden account terminations later. Working with a specialized high-risk merchant provider means more stability through proper upfront underwriting and industry-specific support.
OPEN YOUR HIGH-RISK ACCOUNT TODAY
How can I recover my Stripe account?
Now it’s time to see if we can salvage your Stripe account. The risk of Stripe shutting you down permanently is high. Even if you do get it reinstated, it won’t stop them from shutting you down again.
But if you can gain access even just one more time, you can salvage your customer data to make transferring to a new processor that much simpler.
When There’s Hope
Got a suspension notice? Don’t throw in the towel just yet. The first thing you need to do is carefully read through that suspension email from Stripe. They usually outline exactly what triggered the suspension, whether it’s suspicious activity, documentation issues, or policy violations.
Jump into action by contacting Stripe’s support team immediately. Be professional and cooperative – remember, these folks hold the keys to getting your account back online. Have all your documentation ready, including financial statements, transaction logs, and any compliance policies you’ve implemented.
If Stripe flags specific issues that you can fix, tackle them head-on. Maybe they need additional business documentation, or perhaps you need to update your compliance policies. Whatever it is, handle it ASAP and keep Stripe in the loop about your progress.
When It’s Permanent
Let’s keep it real – sometimes a Stripe suspension is permanent, especially if you’ve violated their terms of service or are operating in a prohibited business category. Here’s what to do:
- Write a formal letter to Stripe’s fraud department requesting information about your account closure and asking about any appeal process. Important: Your letter needs to include tracking and require a signature upon arrival.
- Request your funds back strategically. If you have a clean record with low chargebacks, start by requesting 50% of your held funds. After a month, request the remaining amount. Just know that Stripe typically holds funds for up to 180 days.
- Contact your affected customers immediately and let them know about the situation. Direct them to your new payment methods to ensure business continuity.
While you’re working through this process, your business needs to keep running. That’s why you need to have those backup payment solutions we discussed earlier already in place. In the payments world, always expect the unexpected and have a Plan B ready to roll.
If you’ve been shut down by Stripe, don’t panic. There are a few things that you can do.
How can you prevent a Payment Processor Shutdown?
Building a bulletproof payment stack is your best defense against future processing disruptions. I’ve seen too many businesses learn this lesson the hard way, so let’s set you up for success.
Creating Your Payment Infrastructure
The smartest move is to diversify your payment processing. Think of it like not putting all your eggs in one basket. Here’s how to build a robust system:
- Maintain multiple processing relationships
- Primary processor for regular transactions
- Backup processor ready to go
- Alternative payment methods for different customer preferences
- Set up a proper risk management system
- Monitor your chargeback ratios daily
- Track customer complaints and address them promptly
- Document all unusual transactions
- Keep detailed records of your customer verification processes
Smart Risk Prevention
Your best defense is a good offense. Implement these practices to keep your payment processing running smoothly:
- Keep your chargeback rate under 0.9%
- Clearly communicate your refund and return policies
- Use strong fraud prevention tools
- Maintain detailed transaction records
- Stay current with industry regulations
Building Processor Relationships
Treat your payment processor relationships like valuable business partnerships. Regular communication, transparency about your business model, and proactive risk management will help you maintain solid relationships with your processors.
Pro tip: Schedule quarterly reviews of your payment processing setup. Look for potential risks, assess your processing fees, and make sure you’re using the best solutions for your current business needs.
When it comes to payments, stability comes from preparation. By implementing these strategies now, you’re not just recovering from a Stripe suspension – you’re building a stronger, more resilient business for the future.
GET A SOLUTION THAT BACKS YOUR BUSINESS
Only a real merchant account will support your business.
If you’re not sure where to turn next, give us a call. We can help you get your payment processing back on track.
We know that sometimes getting a real merchant account can be confusing, but Stripe is not the answer for most businesses. We’ve seen countless small businesses fall into this trap, and it always ends in heartbreak when Stripe closes their account down after just a few months of usage.
If you want to see your business succeed online then we advise against using any service that isn’t designed specifically for the industry you operate in. Contact our expert team of merchant account providers to start your business’ safer future.
