4 ms·

Aside from government regulatory requirements, am I the only one who thinks Stripe shouldn't have this kind of say? I know there are business categories that ha

by dmak 4y ago

Aside from government regulatory requirements, am I the only one who thinks Stripe shouldn't have this kind of say? I know there are business categories that have more risk which may or may not be allowed to transact, but this particular instance seems like a huge power trip to me. Perhaps someone with better insight can educate me on this matter?

daveoc64 4y ago
It's really all about risk. There are certain categories of transaction that see a lot of disputes. Payment processors, banks, and card schemes (like Visa/MasterCard) don't like disputes - they are costly to deal with.
- londons_explore 4y ago
  But stripe already charges the customer for disputes, and presumably makes a little margin on top. I can understand if they're saying "we think you're about to get a lot of disputes, and you may not be able to pay for all of them, so we're going to hold some of your money for a few days just to see". But that isn't what they're saying.
- johngladtj 4y ago
  It's really not. It's about regulatory requirements and political pressure (including the attempt to avoid said political pressure)
its-summertime 4y ago
AFAIK, the moralizing comes from higher up (Banks, Visa, Mastercard), instead of Stripe themselves. Alternatively, it could be a category of transactions that eventually almost always see high fraud (e.g. kids paying for essays using parent's money, parents reporting the transactions afterwards).
curiousgal 4y ago
Don't use them?
smca 4y ago
Stripe works closely with banking partners and card networks in many countries. These institutions have strict rules that govern them. We have an obligation to uphold those rules—and so the decision to support a business isn't solely up to Stripe. We wrote more on that here (as it can be a understandable source of confusion): https://stripe.com/blog/why-some-businesses-arent-allowed https://stripe.com/blog/why-some-businesses-arent-allowed. Essay mills fall under the category of "deceptive" products and services. It's clear we made a mistake here in looking at this particular business and we've re-enabled the account (https://news.ycombinator.com/item?id=34802504 https://news.ycombinator.com/item?id=34802504). In particular, we didn’t correctly distinguish between augmenting the ability to write content vs. buying essays to commit academic fraud. We'll be revisiting our internal policies to better dilineate between these categories.
- gwerbret 4y ago
  While I'm sure the OP appreciates the successful "support via HN", it seems very clear that the real problem with your organization in this regard is people needing to do this in the first place. OP did say of the initial ban that "I tried to appeal but no luck."
- Vanit 4y ago
  If it weren't for your intervention would Stripe have made this correction through its regular processes?
  - smca 4y ago
    Yes, we'd like Stripe to be available to as broad a set of users as possible. Restrictions on businesses ought to be malleable and we need to have the capacity to adapt as the world around us changes. We also work with our partners to relax or remove unnecessary restrictions where we can. Being overly restrictive towards legitimate businesses flies in the face of growing the GDP of the internet—it's a precondition for us to operate. A small component of that is being reactive: seeing where we make mistakes and noticing where our processes need to be adapted. (As we saw today with essay mills!)
febeling 4y ago
The problem is probably related to the alerting system being automatic. The rate of fraud is likely much higher than we all can imagine, I once read a number about credit cards, which was incredible. And if you know the constraints of classifiers where recall and precision are a tradeoff, and consider that basically fraud cannot happen for economic reasons, you can imagine that yanking up the recall (loss avoidance) at the expense of precision (stomping over innocent false positives) is tempting and lucrative, at least on short term.

by dmak 4y ago

daveoc64 4y ago

It's really all about risk. There are certain categories of transaction that see a lot of disputes. Payment processors, banks, and card schemes (like Visa/MasterCard) don't like disputes - they are costly to deal with.

londons_explore 4y ago
But stripe already charges the customer for disputes, and presumably makes a little margin on top. I can understand if they're saying "we think you're about to get a lot of disputes, and you may not be able to pay for all of them, so we're going to hold some of your money for a few days just to see". But that isn't what they're saying.
johngladtj 4y ago
It's really not. It's about regulatory requirements and political pressure (including the attempt to avoid said political pressure)

its-summertime 4y ago

AFAIK, the moralizing comes from higher up (Banks, Visa, Mastercard), instead of Stripe themselves. Alternatively, it could be a category of transactions that eventually almost always see high fraud (e.g. kids paying for essays using parent's money, parents reporting the transactions afterwards).

curiousgal 4y ago

Don't use them?

smca 4y ago

Stripe works closely with banking partners and card networks in many countries. These institutions have strict rules that govern them. We have an obligation to uphold those rules—and so the decision to support a business isn't solely up to Stripe. We wrote more on that here (as it can be a understandable source of confusion): https://stripe.com/blog/why-some-businesses-arent-allowed https://stripe.com/blog/why-some-businesses-arent-allowed. Essay mills fall under the category of "deceptive" products and services. It's clear we made a mistake here in looking at this particular business and we've re-enabled the account (https://news.ycombinator.com/item?id=34802504 https://news.ycombinator.com/item?id=34802504). In particular, we didn’t correctly distinguish between augmenting the ability to write content vs. buying essays to commit academic fraud. We'll be revisiting our internal policies to better dilineate between these categories.

gwerbret 4y ago
While I'm sure the OP appreciates the successful "support via HN", it seems very clear that the real problem with your organization in this regard is people needing to do this in the first place. OP did say of the initial ban that "I tried to appeal but no luck."
Vanit 4y ago
If it weren't for your intervention would Stripe have made this correction through its regular processes?
- smca 4y ago
  Yes, we'd like Stripe to be available to as broad a set of users as possible. Restrictions on businesses ought to be malleable and we need to have the capacity to adapt as the world around us changes. We also work with our partners to relax or remove unnecessary restrictions where we can. Being overly restrictive towards legitimate businesses flies in the face of growing the GDP of the internet—it's a precondition for us to operate. A small component of that is being reactive: seeing where we make mistakes and noticing where our processes need to be adapted. (As we saw today with essay mills!)

febeling 4y ago

The problem is probably related to the alerting system being automatic. The rate of fraud is likely much higher than we all can imagine, I once read a number about credit cards, which was incredible. And if you know the constraints of classifiers where recall and precision are a tradeoff, and consider that basically fraud cannot happen for economic reasons, you can imagine that yanking up the recall (loss avoidance) at the expense of precision (stomping over innocent false positives) is tempting and lucrative, at least on short term.