Given our position in the financial ecosystem, Stripe is ultimately responsible for protecting businesses that use our services, as well as their customers. In keeping with industry standards, we conduct reviews of our users’ accounts—both new and existing—to ensure their businesses remain in good health as they evolve over time.
The information we collect during this process is used to confirm that Stripe has an accurate, up-to-date profile of your business, and to determine whether any additional steps are required to help you handle future disputes or refund requests.
In Payments, credit risk refers to the possibility of a loss resulting from a business’s inability to fulfill its customer obligations for which payments have been received. The level of risk associated with any business often comes down to the potential for incurring losses through disputes. Our analysis of years’ worth of payment processing data tells us that businesses which take payments in advance of delivery of goods and services are more susceptible to disputes, and therefore create credit risk for payment processors like Stripe. While a business may have every intention of delivering the goods or services, long delivery windows can leave them vulnerable to unexpected delays or disruption which could prevent them from doing so, e.g., staffing or supply chain issues.
In general, businesses must demonstrate operational and financial resilience to continue fulfilling their business obligations.
One or more of these factors could indicate high credit risk:
During a review, we’ll take a close look at your business model, processing history, business reputation, financial stability, and Stripe product usage, among other things. We will also check that you provide clear information to your customers to reduce the risk of disputes, such as how to contact your business, your fulfillment policies (e.g., refund, cancellation, or delivery policies), and details on any free trials offered.
To help us obtain a holistic view of your business, we may ask you to provide updated financial information, such as bank balance and transaction history, financial statements, and management accounts relating to your business. We may also ask additional questions about your operations management and recent processing history on Stripe.
Stripe takes on a significant liability as a payment processor and is liable for the refunds and disputes that arise when our users have taken payment from their customers but are unable to fulfill their orders. We’re also subject to strict requirements imposed by our partners in the payments ecosystem that dictate the level of risk that we're able to support. As a result, we are required to complete several types of reviews for every business that processes with us to monitor credit risk and comply with our financial partners.
The information you provide, such as details about your business model, funds flow, and vendor relationships, helps us to better understand your business and to assess it fairly. In addition, the insight we gain from linking your bank account via the Stripe Dashboard gives us a current and continuous understanding of your liquidity, which can reduce the need for frequent reviews.
There are a number of things you can do to help ensure your review is completed quickly and efficiently:
We rely on the information that’s provided to us when assessing risk. Without this information, we might be left with an incomplete profile of your business, and therefore add friction to the review process.
The actions we take will vary depending on the level of risk we attribute to your business. In most cases, once the review is complete, your business will be able to continue processing as normal.
For businesses that are determined to have an increased level of risk, we may need to hold a portion of each transaction in reserve to help ensure funds are available to cover future refunds or disputes. In some rare instances, if a business is determined to be very high risk, if it has remained in a card network monitoring program for an extended time, or is in violation of the Stripe Services Agreement, we may need to close the account.
Here are some ways to manage your credit risk, prevent disputes, and generally keep your business in good health:
We continuously monitor the account of each business that works with Stripe with our automated systems. The amount or frequency of reviews we conduct of any account depends on the risk signals that we pick up from our monitoring of day-to-day activity.
We may conduct more frequent reviews when a business is at risk of not fulfilling business obligations due to their operational or financial position. Reviews of this nature are a common practice in the financial services industry.
In addition to our occasional credit risk reviews, we also conduct reviews when we see anomalies in processing behavior, and when we think your business might be adversely impacted by industry headwinds or a challenging economic environment.
Linking your bank account gives us a current and continuous understanding of your liquidity, which may reduce the need for us to collect additional information directly from you, as well as the frequency of reviews on your account.
Data security and confidentiality are incredibly important to us. The information you share is intended solely for the purpose of underwriting and will be shared only on a need-to-know basis within Stripe. For more information about how Stripe handles your data, please take a look at our Privacy Policy.
These account reviews are a required step as a condition of processing for our users. Providing this information in a timely manner helps ensure there are no unforeseen delays or unexpected risk mitigations that could impact your business.
If you are unable to provide the requested documentation or information, please reach out to us as soon as possible. We’ll work with you to try and find alternative solutions whenever possible.
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