Stripe, PayPal or Square shut down your account? What to do next
Updated · Vanta Foundry
Short answer
What should a business do when Stripe, PayPal or Square closes its account?
Stop the bleeding first: move checkout to a processor that accepts your business type, so you can take orders again. Then deal with the old account: find out whether funds are held in a reserve and when they release, and download your transaction history. Long term, run a second processor already connected, so the next closure is a switch, not a shutdown.
Why it happens
Payment aggregators like Stripe, PayPal and Square approve accounts instantly and review them later. When a later review finds a business type outside their rules, a jump in volume, or a high refund or chargeback rate, they can close the account with little warning.
Some categories are reviewed more often than others: supplements, research supply, telehealth, subscriptions and anything with a long delivery time.
The first 48 hours
- Take payments again. Apply with a processor that accepts your business type and connect it to your checkout. This is the step that stops lost sales.
- Read the closure email. It usually says whether funds are held, for how long, and why.
- Download your data. Transaction history, customer receipts and dispute records, before access is limited.
- Answer open disputes. Unanswered chargebacks are lost by default and count against you with the next processor.
Held funds and reserves
A processor that closes an account often holds part of the balance as a reserve, to cover refunds and chargebacks that arrive later. The hold period is set in the processor's terms. Keep records of every order so you can answer anything that comes up while the reserve runs.
How to not be here again
- Apply with a processor that approves your business type up front, rather than one that reviews it after the fact.
- Keep a second processor connected to your checkout, so switching is a setting, not a rebuild.
- Watch refunds and chargebacks, and make cancellation and support easy to find.
- Describe what you sell accurately on your application and your website.
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