Stripe's list of prohibited businesses(stripe.com) |
Stripe's list of prohibited businesses(stripe.com) |
There are a few reasons businesses end up on our prohibited list: they're full of fraud (get rich quick schemes), legally regulated (guns, drugs), or regulated by card companies (pornography).
In many ways, I'd prefer a world where Stripe's prohibited business list was no more specific than that of a web hosting service, and didn't prohibit anything beyond what's required by law.
However, there's an essential neutrality in the routing of packets that's absent in the routing of dollars: credit card networks are emphatically not neutral about the businesses they support on their rails. As such, no matter what stance we might intrinsically want, the outcome is largely determined by what Visa, MasterCard, etc., seek to enforce.
This might seem unfair, and the techno-libertarian in me finds the enumeration distasteful and arbitrary. On the other hand, the card networks have accomplished something very hard: billions of people are willing to give online businesses access to arbitrary amounts of money, sight unseen. This is an impressive achievement, and they pulled it off in part by minimizing the number of bad businesses that exist on their network. So there's a trade-off.
Tl;dr: though we have some influence, we mostly don't get to set the rules.
There are a few reasons businesses end up on our
prohibited list: they're full of fraud (get rich quick
schemes), legally regulated (guns, drugs), or regulated
by card companies (pornography).
We can waive these when it seems reasonable (and we're not otherwise precluded from working with the business). If we ever do come across a legitimate business selling human hair, we might try to figure out a way to make it work.
For guns you're refusing to do business with Federal Firearms Licensees, the BATF even has a nice page allowing you to verify them: https://www.atfonline.gov/fflezcheck/
I am not aware of any case where the authorities have gone after a payment processor serving a store selling any of these items. It's certainly not common, we watch this because of all the illicit efforts by them to shut down gun stores and manufacturers.
In the long run you might find this policy politically crippling; e.g. it says something that 42 states, with Illinois joining them in a few months, have shall issue concealed carry regimes.
If it were unfair, your ToS would categorically prohibit itself, under B.5.56 "any... service... that is... unfair".
That's a little bit facetious, but though there are lots of aspects of the card networks that I dislike (and suspect will change), they work pretty damn well for most transactions. We could devote ourselves to usurping them, but it feels more interesting to see how rapidly we can advance the state of the art instead.
[1] We are unable to underwrite the following business models: (1) door-to-door sales, (2) offering substantial rebates or special incentives to the Cardholder subsequent to the original purchase, (3) negative response marketing, (4) engaging in deceptive marketing practices, (5) sharing Cardholder’s data with another merchant for payment of up-sell or cross-sell product or service, (6) evading Card Network’s chargeback monitoring programs, (7) engaging in any form of licensed or unlicensed aggregation or factoring, (8) airlines, (9) tour operator, (10) age restricted products or services, (11) bail bonds, (12) bankruptcy lawyers, (13) bidding fee auctions, (14) collection agencies, (15) chain letters, (16) check cashing, wire transfers or money orders, (17) counterfeit goods or any product or service that infringes upon the copyright, trademark or trade secrets of any third party, (18) currency exchanges or dealers, (19) embassies, foreign consulates or other foreign governments, (20) firms selling business opportunities, investment opportunities, mortgage consulting or reduction, credit counseling, repair or protection or real estate purchases with no money down, (21) credit card and identity theft protection, (22) cruise lines, (23) essay mills, (24) flea markets, (25) drug paraphernalia, (26) extended warranties, (27) fortune tellers, (28) “get rich quick” schemes; (28) gambling (including but not limited to lotteries, Internet gaming, contests, sweepstakes, or offering of prizes as an inducement to purchase goods or services), (29) sports forecasting or odds making, (30) illegal products or services, (31) mail-order brides, (32) marijuana dispensaries and related businesses, (33) money transmitters or money service businesses, (34) multi-level marketing or pyramid schemes, (35) online or other non-face-to-face pharmacies or pharmacy referral services, (36) prepaid phone cards, phone services or cell phones, (37) pseudo pharmaceuticals, (38) quasi-cash or stored value, (39) securities brokers, (40) sexually-oriented or pornographic products or services, (41) shipping or forwarding brokers, (42) substances designed to mimic illegal drugs, (43) telemarketing, (44) timeshares, (45) travel agencies or travel clubs, (46) online or other non-face-to-face tobacco or e-cigarette sales, (47) weapons and munitions (48) virtual currency or credits that can be monetized, re-sold or converted to physical or digital goods or services or otherwise exit the virtual world, (49) personal computer technical support, (50) human hair, fake hair or hair-extensions, (51) selling social media activity, such as Twitter followers, Facebook likes or Youtube views, (52) Telecommunications equipment and telephone sales, or (53) any product, service or activity that is deceptive, unfair, predatory or prohibited by one or more Card Networks.
I think I know why this is on there:
"(10) age restricted products or services"
But wouldn't that also apply to every business that has a COPPA disclaimer in its ToS.
Edit: Scrolling down reveals the answer, https://news.ycombinator.com/item?id=6188918
Too bad, indeed.
Travel in general is seen as a high risk industry. Try going to a bank for a merchant account, tell them you run a travel company and watch their reaction. They don't really want you as a customer anymore. The risk profile is too high.
There's a couple main reasons for this.
One, there's a higher than normal chargeback rate in travel. Think about this, you get to your destination and find out that the online pictures of your hotel are nothing like reality. You feel like you've been scammed, but the owner refuses to give you a refund. You aren't left with a lot of options. But if you booked with your credit card, you can request a chargeback and go stay some place nicer.
This same idea can be applied to inclement weather, an inferior tour, etc. Your expectations are different than reality, you can't get a refund, so you request a chargeback.
Two, the average transaction size is travel is quite large. If I'm upset with my dinner at a restaurant, I might be out $20. If I'm upset with my hotel on a vacation, I might be out $500-$1,000. That's a big difference. I might be able to live with losing $20, but definitely not $500+. So I go through the hassle of a chargeback since the dollar amount makes it worth it.
Between the two of these reasons, you end up with a high risk industry.
I'd imagine all the other industries that are prohibited have similar risk profiles.
* personal computer technical support
* travel agencies
* hair-extensions
What all of them is the ability to be a scam, but any business can scam you. Surprised fortune tellers aren't on there.
They are. #27
Is this possibly related to the fake Anti-Virus warning popups and the companies that make them?
(50) virtual currency that can be monetized, re-sold or converted to physical or digital goods or services or otherwise exit the virtual world
===
(52) selling video game or virtual world credits (unless you are the operator of the video game or virtual world),
Do you think it's absurdly long? Their agreement in general is much shorter than any single one of the several I had to go through to get a merchant account and CC processing service before.
Is it absurd because you think the business types they mention are silly? Well, they are silly. But people do them.
Is it absurd because you are angry your business is on the list? Well, that's life. I, as a valid business owner who uses Stripe, am very glad Stripe protects their relationships / value / company / customer rep time by refusing to serve illegal or borderline illegal businesses, and those with ridiculously high rates of fraud. Yay!
Not to mention that credit cards allow people to buy stuff they can't really afford on credit. If you remove that ability, you'll be losing a lot of potential customers.