Stripe can completely ruin your 6-figure business in one minute

This is a way, way bigger deal for this service than Stripe. Dissecting the email Stripe sent, though, the issue is actually that a card network found them in-violation of something, and shut them down. It doesn&#x27;t name the card network, but the card network assessed an illegal transaction fine, and, well, ended their credit card processing with all networks and processors.<p>&gt; In addition, per card network rules, you and your business have been added to MATCH or another terminated merchant file operated by the card networks.<p>This is now a problem between Flurly and Visa&#x2F;Mastercard&#x2F;whoever decided to fine them. Stripe is really just delivering the bad news on-behalf of whichever network decided to bring the axe down. Also, obviously, being added to MATCH&#x2F;TMF means that your business cannot process credit cards. Just...at all. It doesn&#x27;t matter which gateway you use in this case. The same outcome would happen with Braintree or any other gateway.

More context at the Flurly site: <a href="https:&#x2F;&#x2F;flurly.com&#x2F;blog&#x2F;flurly-stripe-shutdown" rel="nofollow">https:&#x2F;&#x2F;flurly.com&#x2F;blog&#x2F;flurly-stripe-shutdown</a><p>But Stripe seems just like the middleman here? All these actions are originating from &quot;a card network&quot;, presumably Visa or Mastercard.

Previous discussion: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=34746870" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=34746870</a>

If getting shut down, blacklisted and fined $425000 is &quot;a bit of bad news&quot;, I wonder what Stripe considers actually bad news.

If you have a look at their products, they seem completely dodgy - I mean, one&#x27;s just listed as &quot;Credit Card Payments - $10&quot;, so is Stripe really in the wrong here?

So essentially Flurly is a payment processor for small businesses running atop on Stripe (that is the same) that runs atop of Visa and Master Card.<p>Go figure there will be problems.

That&#x27;s not the first time Stripe is pointed fingers at, and most probably rightly so, but, for someone like me, totally unaware of what Flurly is, damn their service description seems shady, at best.

Given these are fines from the card networks, the business, if it&#x27;s in the right, can go to court quite readily.<p>Illegal processing is no joke. This isn&#x27;t as much &quot;Stripe ruining a business&quot; as it is &quot;a business appears to have been processing illegal activity, which puts it into liability&quot;.<p>To be clear, in some jurisdictions and depending on the activity, illegal processing also carries a jail sentence! The most extreme of which is, of course, terrorist financing.

How come both the card network and Stripe get to continue operating by simply firing their bad customer, but Flurly doesn&#x27;t get that chance?<p>I don&#x27;t mean &quot;they had a chance to avoid the problem by switching everyone to Connect&quot;. I mean, how come Stripe and the card network both get to say &quot;I&#x27;m good, just one of my customers is bad, so I&#x27;ll just get rid of them now that you have told me you don&#x27;t like them.&quot; But Flurly doesn&#x27;t get to say that?<p>The card network gets to keep running as long as they do something about their bad customer Stripe. Stripe gets to keep running as long as they do something about their bad customer Flurly. They recieve a consideration that they don&#x27;t grant in turn.<p>Don&#x27;t base the answer on how obviously dodgy Flurly seemed to be &quot;asking for it&quot;, without being able to show that Visa is never used for any illegal activity.

Your 6-figure business tend to get ruined if you sell shady stuff and end up blacklisted by card networks, Stripe or not. You have someone else to blame on social media when you use Stripe, though.

Am I reading that correctly, that you&#x27;re required to submit to a corporate guilty-until-proven innocent court, for vital payment network access?

Setting up an automated paywall hosting system using a third party payment provider is honestly a minefield waiting to explode. The business owner knew this:<p>&gt;Over time, this set up proved risky with legal liabilities. So last year I migrated to Stripe Connect’s direct charges model where customer payments would go directly into sellers&#x27; Stripe accounts<p>Sadly, he thought he could keep existing users on the old scheme:<p>&gt;there were still legacy sellers that depended on Flurly for their living. Thus I &quot;grandfathered&quot; in these accounts and let them keep using the old Flurly system<p>So it was just a matter of time before one of these accounts were used for selling non-compliant things or doing illegal transactions. So it&#x27;s not Stripe which ruined his business as the title indicates; it was one of Flurly&#x27;s customers breaching Stripe&#x27;s TOS and still being linked through Flurly&#x27;s Stripe account. Only logical they shut him down, a risk the owner acknowledged in this blog post.

Is it legal for a private company to impose a financial penalty on you without even explaining the reason?

&quot;&lt;your payment processor&#x2F;financial institution&gt; can completely ruin your N-figure business in one minute&quot;<p>Fixed that for you. This isn&#x27;t a Stripe problem, it&#x27;s a &quot;you need to learn how to color inside the financial lines&quot; problem.

&gt;fine of $425,000<p>Legally speaking, can Stripe keep that money? Flurly will be broke and cannot payout their customers. Aren&#x27;t those customers as entitled to their money as is Stripe or the card networks?

From a previous discussion Stripe&#x27;s response seems to be reasonable. They have a solution to avoid this kind of situation.<p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=34747702" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=34747702</a><p>It seems that Flurry&#x27;s well intentioned call (not asking legacy customers to move immediately to the right payment mechanism) backfired.

There appear to be no less than 4 guilty parties here: CC network, Stripe, Flurly and newsawp.com.<p>According to the blog post, they would have been fine if all Flurly accounts would have been migrated to Stripe Connect direct charges.

Well this has now made me reconsider ever using Stripe.

&gt; Your account has been found in violation by a card network<p>Those last 4 words there are key.<p>&gt; Despite our efforts to provide evidence to the counter<p>In other words, they were trying to help. Your problem is the card network in question.

Should have been using monero. Hell, even bitcoin.

If you&#x27;ve followed HN for any time, you know to avoid stripe.