Why was my Stripe account closed? Common causes of shutdowns and how to fix them

Stripe is one of the most popular payment processes for businesses of all kinds. As a payment processor that supports over 100 payment methods, it helps automate finance operations and capture recurring revenue. 

Like most payment platforms, however, it’s possible to run into some issues along the way. If your account has been restricted, this will prevent the processing of payments to and from your Stripe account. Thankfully, this is an easy fix. 

If your account has been closed, there are a few steps you can follow to resolve this issue. Take a look below, as we guide you step by step to get your account working again. 

Reasons why your Stripe account has been closed

If your Stripe account has been closed, there are a few different reasons why this may be the case. 

🛑Restricted Business List

Your account might be on the Restricted Business List. Some industries, products, and businesses can’t use Stripe’s services. Prohibited categories include adult content and services, debt relief companies, government services, gambling, and identity services. 

🥸 Fraudulent activity

If Stripe suspects any fraudulent activity on your account, it will be suspended while they investigate. 

😴 Inactivity

If you’ve not processed any payments on Stripe for 90 consecutive days, then Stripe will close your account. 

💰 Insufficient funds

Your account might be overdrawn, and you have inadequate funds to cover transactions. 

🚫 Violations

You may have unknowingly violated Stripe’s Terms of Service, Acceptable Use Policy, or some of the other policies they have in place. 

ℹ️ Inaccurate information

Stripe will disable your account if the documentation required for verification has not been provided. 

Check out our full Stripe guide that tells you everything you need to know, including how it works and whether or not it’s the best option for your business.

How to prevent your Stripe account from being restricted

If your Stripe account has been restricted, chances are it’s because of inaccurate information. It’s integral that you provide the appropriate documentation while signing up, so the platform can confirm your business is really what it claims to be. 

Documents you’ll need to supply include: 

• Home address verification: So that Stripe can confirm where you live
• Identity verification: This might include a driver's license, state ID card, or passport.
• Business verification: This could include a certificate of incorporation, partnership agreement, certificate of nonprofit registration, or company constitution. 

What happens if my Stripe account is restricted?

If you’ve not supplied Stripe with these items, Stripe may apply one or two different types of restrictions on your account. 

• Charges disabled: Stripe prevents you from processing customer payments.
• Payouts disabled: Stripe prevents payouts from your Stripe account from being linked to your bank account. 

5 Steps to fix a restricted Stripe account

If your Stripe account has been restricted, there are a few steps you can follow to get it up and running again. 

1. Log in to your Stripe account

To begin the process of restoring your account, sign in to your Stripe account via the dashboard. After you’ve done this, navigate to the 'View Stripe Payments Dashboard' button located in the Online Booking and Payments section. 

2. Examine the reason for suspension

On the online booking and payments section, you’ll find a Restricted icon. Click on this, and it will tell you the reason why your account has been closed. 

If it’s because of unsupplied documentation, Stripe will simply state ‘Identity documentation required’ under ‘Information needed.’

It won’t, however, tell you the exact documentation you need. 

3. Provide the required documentation

To supply Stripe with the proper documents, navigate the Settings page on your dashboard. Scroll down to find ‘Business settings,’ and click on Verifications. 

You’ll find a button named ‘Review details,’ which you can click on to continue the verification process. This will ask you to fill in your personal details, including name, address, and social security number. 

Click ‘Update Person’ at the bottom of the screen to confirm your details. 

4. Check your emails

If Stripe requires more information about your business, you’ll be sent an email asking for further documentation. 

If this is the case, return to the Business settings page, and click ‘Review details,’ where you’ll be prompted to upload the required information. Bear in mind that your documents will need to meet some specific requirements in order to be accepted. These include: 

• Clarity: The documents must be large and clear enough to read easily. 
• Validity: All documents must be valid and up to date according to your business’s registration. 
• Matching information: Make sure the information supplied in the form, for example, company registration number, VAT number, business address, business name etc… all match the information you’ve supplied on your Stripe account. 
• Comprehensive documentation: If the documents you supply consist of PDFs with multiple pages, make sure you include all of the relevant pages. 

5. Wait for confirmation 

Once you’ve provided the relevant documents, allow Stripe at 3-5 business days to review your documents. 

Stripe has a support team that you can contact via support.stripe.com/contact, so if you want to check on the status of your application, you can reach out here. 

Once your details have been checked, Stripe support will email you to notify you about the outcome of your review. 

Looking for a comprehensive list featuring the best payment processing companies for ecommerce? We’ve got the full low-down

Advantages and disadvantages of using Stripe as your PSP

There’s no doubt that Stripe is one of the top payment service providers out there. This doesn’t mean, however, that it doesn’t have some disadvantages compared to some other payment services out there. 

Pros:

✅ Well-established in over 45 countries, with over 135 total currencies

✅ Developer-friendly a wealth of customization options

✅ Top-notch security measures for both businesses and customers

Cons:

❌ It might not be the best option for physical stores

❌ Stripe is only available in 135 countries, so it might not be accessible for businesses registered elsewhere.

❌ You won’t get the full benefits of the platform if you’re not a developer

Top Stripe alternatives

Whop 🏆

Our top Stripe alternative spot goes to Whop, which combines the security and convenience provided by Stripe, with several additional features which make up for the latter’s shortcomings. 

For one, Whop boasts an ETH gateway, which means that you can get paid in crypto, a feature that simply isn’t an option on Stripe.

Whop Payments allows you to get paid even if Stripe isn’t available in your country with the help of a Tipalti integration.

Whop comes complete with a full suite of tools to help you start, run, and grow your digital business. When you join Whop, you can sell almost everything digital, including:

• Community access
• ChatGPT Plugins 
• EBooks
• SaaS products
• Webinars
• Masterminds
• Coaching
• Sports betting communities
• … and much more!

It’s completely free and easy to get started, allowing you to join up and browse all the features offered by the platform to find out if it works for you or not. 

PayPal

This is one of the most common ecommerce payment processing apps that Stripe is compared with. They’ve both been around for a similar length of time, but PayPal has several advantages over its competitors. 

As we mentioned above, Stripe is only supported by 135 countries, whereas PayPal supports 200 - a substantial jump. 

Along with this, PayPal is much easier to set up than Stripe, making it a more convenient option for smaller businesses without any developers on the team. 

Square

Square is one of the best payment processing options for physical stores. Gradually taking over the US in-person transaction market, Square has established its dominance and authority over this area of commerce. 

Stripe, on the other hand, is more geared toward the international online market. 

Choosing the perfect SaaS payment gateway for your business

For businesses looking to sell subscription-based products and conduct recurring payments, Whop Payments is undoubtedly the best processor out there. With a competitive fees, a wealth of payout alternatives, plus top-notch security, it makes selling a dream. 

Whop is also one of the few payment platforms out there that allows prospective customers to pay you in crypto via an ETH gateway directly to your blockchain wallet. 

Plus, should your account be shut down for any reason, Whop houses the best-in-class customer service with 24/7 availability and a sub-3-minute response time, so you won’t be left hanging around. 

Setup on Whop is also incredibly easy, taking just a few minutes. This means you don’t have to be too tech-savvy to start running a digital business

Whop provides your customers with the smoothest journey possible.

FAQ

What payments do Stripe support?

Stripe supports a variety of different payment methods to make each transaction as easy as possible for you and your customers. These include:

• Debit cards
• Google Pay
• Apple Pay
• Buy now, pay later
• Credit cards
• Bank transfers

Bear in mind that the first payout on new Stripe accounts can take up to 7 days. So, if you’re still waiting for this to be processed, don’t worry - this is completely normal and your account hasn’t been closed.

Will Stripe reactivate my account?

If your Stripe account has been closed for reasons other than missing documentation, it won’t usually be reactivated. This is because you don’t have much control over how Stripe views your business and the products you’re offering. 

According to the official terms of service, "Stripe may terminate this Agreement (or any part of it) or close your Stripe Account at any time for any or no reason (including if any event listed in Sections 6.2(a)-(i) of these General Terms occurs)."

So basically, Stripe doesn't need to provide you with a reason why your account has been suspended.

If it’s due to fraudulent activity, or selling restricted products, then you won’t be able to create any future accounts on the platform. If it’s simply due to inactivity, Stripe will usually allow you to make a new account. 

What are some of the limitations of Stripe?

Despite its popularity, Stripe does have its limitations. With a 2.9% + $0.30 per transaction fee, plus the monthly costs and some hidden fees, Stripe can be a very expensive option for new and smaller businesses. 

Can Stripe legally hold your money?

Depending on your situation, it can be difficult to get money back from Stripe. Oftentimes, you won’t be given any information on why your funds have been held, or when you’ll get them back. However, legally, Stripe is only able to hold funds for a total of 180 days.

Is Stripe 100% safe?

Stripe has some of the best security features out there. With EMVCo Level 1 and Level 2 certifications, it meets the highest standards in the industry. 

• Level 1: Covers the physical security between the credit cards and terminals
• Level 2: ensures the software processes EMV transactions safely and smoothly

What are the differences between Stripe and PayPal?

Stripe and PayPal share many similarities. They’re both payment processing platforms that allow businesses to accept payments in person, via social media, or in an app.

However, there are also some key differences between the two. While PayPal is customizable to a certain degree, Stripe has almost unlimited scalability when it comes to customization features. 

The checkout experience also differs. With PayPal, users are redirected to PayPal to complete their payment, which can create a more time-consuming shopping experience. Stripe, on the other hand, directly integrates payments into the web store. 

Who uses Stripe? 

Stripe is one of the top payment processing platforms in the industry, used by big brands such as Amazon, Shopify, Lyft, Pinterest, and FreshBooks. The company even attests that almost 90% of all personal credit cards have been processed via the Stripe software. 

Some of the most popular businesses that use Stripe include:

• Nonprofits and fundraisers
• Software as a service
• Retail online stores
• eCommerce sites
• B2B Platforms
• B2C Marketplaces