Stripe Is Holding 25% of Our Funds, Indefinitely

In early March, 2020, my business partner would send texts daily about how travel was getting crushed. Every day I would check our numbers and still see growth of 100% YOY with minor drops and dips and then growth again.  We were trending with our projected growth. Then, March 15 (the ides of March) hit and our sales plummeted, down -55%. By March 21 sales were down -87.5%.  We were getting crushed. I can share these specific numbers because Stripe has a great UI and it is super simple to grab this data. Stripe makes looking at numbers simple, and it makes setting up a PCI compliant payment processor super easy for dev teams.  Stripe makes themselves sticky. So sticky that they can try to pull what comes next. 

On March 20, Stripe decided to start holding 25% of all of our funds for each transaction; this is of course before refunds and fees.  Below is the only communication I received. For what Stripe provides with a great UI and simple integration, they take back fully with their awful customer service/ lack of empathy. 

I found the timing interesting and asked them if I could show them proof (with pictures from our bank account) that we could pay back any refunds.  I reached out online and found that other businesses in our industry, and elsewhere, have had the same issues.  

It seemed to me like Stripe wasn’t doing well financially and THEY were the ones that were hit hard financially due to Covid-19. Perhaps they invest their client's money into investment accounts?  

When I was finally able to speak to someone on the phone to go over this it was like talking to a numb robot without a heart. I knew that no matter what I said, things weren’t going to change. This was seemingly a top down decision, “No wiggle room with Stripe Reserves”. Perhaps the reason for this was an internal “we need this money”?  

Funnily enough, it's been less than a month since Stripe announced that it would be extending their Series G round and raising another $600M. 

https://stripe.com/newsroom/news/stripe-extends-series-g-funding-round

Stripe stated that it was using the funds

“to step up product development, global expansion, and strategic initiatives”. 

Further, Stripe mentions that they are

“Providing fast access to funds through Instant Payouts, Stripe Capital, the Stripe Corporate Card, and helping small businesses access government aid.”

I am seeing record numbers in sales this year with my company and refunds are back to our normal percentages and trends, yet Stripe is radio silent.  No news of the reserve being released anytime soon.

Has something similar happened to your startup/ small business. Please share so that we can battle this together. Ideally this post can act as a hub where people can voice their complaints against Stripe and perhaps a non-robot with a heart and some empathy will reach out to help solve all of our issues?

I’m giving Stripe another month and then I will move our company to a different payment processor. If I do that, do I expect to get my reserves back right away? I surely do not!