Kicked out of Stripe, alternative solution?

[jamie3000]

I did, and funnily enough my application got denied because they managed to got in touch with Stripe and here's their response:
"The application was declined previous processor stated that they have had a negative experience with you or your business."
I was literally shocked at the response, how can you have a negative experience with a customer, that made you over $30k in transaction fees without even providing support of any kind.


StealthPay isn't a credit card processor at all. let alone getting any customer to pay using its payment model.


Unfortunately that's the trend right now, look at Microsoft Office, Adobe Creative Suite etc. like every software is a monthly subcription now.


I think is less about the ratio, my account was reaching VCMP 75 monthly chargeback threshold. But it would make more sense if that 75 number would be based on your number of transactions, it is unfair if you do a lot of micro transactions like thousands, and you will definitely hit that threshold even if your ratio is below 1%.

I've just read that and it's absolutely ridiculous. This means my volume can never exceed a certain level with stripe now because my charge back rate is above 0.75%.

 

[aznxfrost]

Super unpopular opinion, but... The people who do chargebacks are good riddance, and you should actively promote it.

Aim for having 0 disputes, all your customers knowing exactly what they are being billed for and when. Keep them regularly updated with emails reminding them. This will literally be your only way to scale.

As a small business with low income, you want to keep people subscribed for as long as possible. I get it. But once you grow, it's time to think more about quality than quantity. This will reflect upon online reviews, payment providers, word of mouth and everything in-between.


If you still want to play with fire, check out https://www.spreedly.com/. It's how business like TruBrain can survive (where they do shady terms-of-service). They have a terrible reputation and in my eyes do pure scams (and it's super difficult to cancel a subscription), but they're still alive and use Stripe, but through Spreedly.

Best of luck.

You are definitely right, this is a lesson learnt for me where I will start sending my customers monthly subscription emails, and big fat warning that they will be charged monthly until cancelled.

I have already switched to Spreedly indeed, not because of wanting to do something shady tho, the only reason is that not many payment processors would help you transfer recurring subscriptions and Spreedly seems like a good place to vault the cards before you settle with your new processor(s).

 

[yakuzaemme]

You are definitely right, this is a lesson learnt for me where I will start sending my customers monthly subscription emails, and big fat warning that they will be charged monthly until cancelled.

I have already switched to Spreedly indeed, not because of wanting to do something shady tho, the only reason is that not many payment processors would help you transfer recurring subscriptions and Spreedly seems like a good place to vault the cards before you settle with your new processor(s).

Good for you! It will save you so much headache allowing you to focus entirely on growing, which will, in the long run, result in even higher earnings!

 

[aznxfrost]

I've just read that and it's absolutely ridiculous. This means my volume can never exceed a certain level with stripe now because my charge back rate is above 0.75%.

Thats right!

The ridiculous thing is, forget what that webpage says, specifically the fines you will be getting if you exceed the level, because they will close your account before you even reach that level.

I got the warning and was thinking, okay, i will be paying some small fines but i can work on this and reduce all the chargeback rates to prevent being fined in the future. Then the next day I was told my account will be closed.

I think that Visa fines only apply to you if you are some big player, otherwise they will just close your account for good and save themselves some time.

 

[momo3]

Good for you! It will save you so much headache allowing you to focus entirely on growing, which will, in the long run, result in even higher earnings!

Is Spreedly basically like a load balancing tool?

 

[hitndrun]

What sort of digital product do you have? I have a free trial to billing website for a digit product with a 2.4% charge back rate and they're yet to say anything to me really.

I think if you hit 3% mastercard and visa step in and shut you down. They override the bank and ISO

 

[c4labs]

The main issue with choosing a new provider is that, we need to be able to migrate all the recurring customer data to the new PCI AOC verified provider (Stripe will only send data to these providers)

Any decent PSP can do it and Stripe will accept to transfer all the card data etc.
Considering your chargeback rate like they did is a joke, it is a low rate. Of course, they will talk about the thresolds etc by visa/mc but when the volume is 25k per month, only the chargeback by count will looked EXCEPT if the PSP is bad a Stripe or Braintree etc.

"The application was declined previous processor stated that they have had a negative experience with you or your business."

BTW, this is illegal. Your previous processor cannot disclose any information and "experience". What is a negative experience? did you contact stripe? Check your contract but I know it is usually illegal. If the ex PSP wants to discuss with the potential new PSP, they need to put you in the loop.

I think if you hit 3% mastercard and visa step in and shut you down. They override the bank and ISO

The official rates are 1% in volume and 100 chargebacks per MID for visa and mc (sometimes MC can ask 75 depending on the merchant code MCC)
3% is already above but some PSPs will still process payments because they "waive" your chargebacks with a clean and low risk merchant. Acquiring banks and PSPs play with this to optimize the margin.
5% HIGH RISK clients 15% MEDIUM RISK clients 80% LOW RISK clients.

In order to reduce the risk on your business, remember to ask to open several MIDs (merchant accounts) to split the volume. Each MID has the visa/mastercard limitations, but if you split, you reduce the risk to reach those limits. For instance, you can have one MID for the AUD currency, one for the NZD, one for the USD, etc. If you mostly process AUD, you can simply ask more MIDs and ask the PSP to split the volume 50% 50% to each MID.

Believe me, you can find a better PSP willing to handle your account

 

[aznxfrost]

Actually, I haven't found one yet.

Spend quite a bit of time researching and applying for PSPs, the options are very limited if you want a PSP that will migrate card details for you. (Literally only stripe braintree and gateways support by spreedly)

Went through the gateway list on spreedly, most of big PSP requires like 1mil/month for international merchants. And smaller PSPs just dont want you because they are too small to take the risk.

Guess its time to ring up banks for real merchant account.

Any decent PSP can do it and Stripe will accept to transfer all the card data etc.
Considering your chargeback rate like they did is a joke, it is a low rate. Of course, they will talk about the thresolds etc by visa/mc but when the volume is 25k per month, only the chargeback by count will looked EXCEPT if the PSP is bad a Stripe or Braintree etc.


BTW, this is illegal. Your previous processor cannot disclose any information and "experience". What is a negative experience? did you contact stripe? Check your contract but I know it is usually illegal. If the ex PSP wants to discuss with the potential new PSP, they need to put you in the loop.


The official rates are 1% in volume and 100 chargebacks per MID for visa and mc (sometimes MC can ask 75 depending on the merchant code MCC)
3% is already above but some PSPs will still process payments because they "waive" your chargebacks with a clean and low risk merchant. Acquiring banks and PSPs play with this to optimize the margin.
5% HIGH RISK clients 15% MEDIUM RISK clients 80% LOW RISK clients.

In order to reduce the risk on your business, remember to ask to open several MIDs (merchant accounts) to split the volume. Each MID has the visa/mastercard limitations, but if you split, you reduce the risk to reach those limits. For instance, you can have one MID for the AUD currency, one for the NZD, one for the USD, etc. If you mostly process AUD, you can simply ask more MIDs and ask the PSP to split the volume 50% 50% to each MID.

Believe me, you can find a better PSP willing to handle your account