So, you must be thinking why am i making such a derogatory comment about this payment gateway giant ?
So i have used Paypal, Stripe, Razorpay, Payu, 2CO and many more in the last 10 years. Payment Gateways are regulated very strictly by the banks and government authorities hence they impose the same strictness on their merchants.
When a payment gateway shuts down a merchant’s account, be it any reason, they hold all the prevailing merchant balance for a certain period. They do this so as to make sure if any of the merchant’s customer disputes a transaction, they should be able to use the funds on hold to compensate from it.
For example, Paypal holds the funds for 180 days and only releases the funds only after this period, Razorpay does the same for 90 days. Holding period varies from company to company.
Once Paypal closed my account and put almost $4000 on hold and like always, I waited for 180 days. But this time, when i logged into my account, i saw a zero balance account. Upon dropping several mails, Paypal support replied to one of my mail and trust me that was their only and last email for atleast 50 mails that i dropped on their support.
They told that they can’t release my funds and they have forfeited my funds against the harm that i have caused to their brand.
All the work i did for my clients against that money and 180 days of patience was before my eyes. I decided that i will never use this gateway again for my business.
I moved on to other gateways like Razorpay and Stripe and i was quite happy with them for sometime. One day both my merchant accounts were closed on the grounds of increased dispute rates and each one of them had put my balance money on hold for 90 days respectively. They released the funds after 90 days.
How is Stripe and other foreign based payment gateways scamming merchants ?
So it was 2022, i again partnered my business with Stripe. Within 20 days of using Stripe, this is how my dashboard looked like.
We had a 116 successful payments and 0 DISPUTES. Yet, Stripe decided to take our account down. Upon questioning, they replied :
They said our business presents a higher level of risk and they are holding our funds incase there are any disputes in future, they can use the funds to refund the customers. But understand that we received zero disputes when our account was closed. So on what grounds did they decide our business presents higher level of risk ? I asked them the same and they never responded to that. This story doesn’t end here, there is a climax to it.
Now what they did after closing my merchant account was, they refunded on all the 106 transactions out of 116 successful transactions (1,75,000 Indian Rupees which is Approx 2100 USD). All of them, All at once, Altogether.
Never had such an experience with Stripe but this time, they crossed all the limits. Closed a merchant account which received 0 disputes, Refunded all the money on all transactions (which is not going to come back). This brings us to think about :
Domestic Payment Gateways Vs Stripe, Paypal & Others
In my opinion and with all the experiences that i have had with all domestic and international payment gateway processors, the only thing i understand is you can contact your domestic payment gateways through multiple channels (emails, phone, physical address, via Relationship Manager assigned by the gateway) but international payment gateways hardly communicate through any medium other than email. They also decide to which email they should reply.
You can put pressure on your domestic payment gateways to release your funds once the holding period is over but you can’t do the same with Stripe, Paypal & others. They let you open a merchant account with them without doing a proper KYC, Let you do business, Let you collect enough money and BAMMM! They close your account without a reason and don’t even return your money.
Money Heist in the name of running financial services company!
You can also read my other articles on medium:
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