Stripe Holding Money in Reserves

rhysadams

We recently had a surge in online payments with Stripe and had a large payout (£47k) withheld until we provided information, we did this quite quickly and supplied all the documentation they asked for.

We have since received an email saying that Stripe will now hold 25% of our balance and all future transactions until 12th December 2023.

I have contacted them and spent a considerable amount of time with their online chat support team. This was eventually esculated. They provided the following statement:

Before taking care of your request, I'd like to give you a bit more context; here at Stripe we're required by law to complete what's called a KYC (Know Your Customer) survey for every business that signs up with us, regardless of how many transactions they've processed. This involves completing in-depth reviews of every single business, including what products or services you're selling, how you intend to sell them, your own description of your products and services, your website, and other details. We use all of this information to determine how risky a business is.

 

These requirements come from our regulators and are intended to ensure we’re taking the right steps to help keep the financial services ecosystem healthy. You can read more about this KYC process in our Services Agreement and Support page.

 

During the review of your account and business, we came to the realization that your likelihood for future chargebacks exceeds the rate we're legally able to support based on those policies. I'm afraid we can't offer much in the way of specifics regarding our review process for the sake of security, but please rest assured that we did a thorough review of your business.
 

As a result, we need to place 25% of your current account balance and future transactions in reserve until December 12th, 2023 (UTC time). The remaining 75% will be paid out to your bank account according to your regular payout schedule. 

We have been using Stripe for many years and take around £120k per annum via this method, the balance of our usual payments is via Direct Debit from a company called GoCardless.

We have had to do 'Know Your Customer' surveys with our bankers and GoCardless and no restrictions were put in place, in fact GoCardless increased our collection limits to help.

In the time with Stripe, we had 1x chargeback for a service we didn't supply due to fraud, but I am talking 7 years ago. Our business is also FCA registered and we are required tocarry out both credit checks and anti-money laundering checks before any goods are supplied, so we don't think any research has been carried out. We have been operating since 2006/2007, with excellent reviews.

There isn't much I can do with regards to the reserves, we have already initiated a new card payment provider and at the moment, Stripe are withholding around £12k of our money, without any movement. We are in a strong position but my main objective is to find out if anyone else has had a similar issue?