What to do if Stripe holds your account

Sometimes Stripe puts a hold on your account. Your charges still go through, but payouts to your bank are paused while Stripe reviews. Here is how to get through it.

Why it happens

Three common reasons:

• High dispute rate. More than 1 percent of charges disputed in a recent window.
• Sudden volume increase. Your monthly volume jumped from 5,000 to 50,000 in one month.
• A specific charge looks suspicious to Stripe's fraud system. An unusual amount, a card from a high-risk country, a known bad pattern.

Stripe is conservative by design. They are protecting themselves and their other merchants. The hold does not mean you did something wrong.

What to do first

• Read the Stripe email carefully. It will explain why they paused and what they need.
• Open the Stripe dashboard. There will be a banner with instructions and a deadline.
• Do not stop charging. Charges still work; only payouts are held. Your business keeps running.

Gather what they ask for

Stripe usually asks for one or more of:

• A copy of your business license. This is the registration showing your school is a real business.
• A photo ID for the account owner. Driver's license or passport.
• A bank statement showing the bank account on file.
• A description of your business. What you sell, who buys it.
• A sample of recent invoices. What customers see when they pay.

For the invoice sample, you can pull an example from Rosterra. Open any family's billing page, screenshot the most recent invoice, and submit that.

Respond fast

Once you have what they asked for, upload it to the Stripe dashboard. Click "Submit for review."

Stripe usually reviews within 1 to 3 business days. Faster if you submit clearly.

What if they want more

Sometimes Stripe comes back with follow-up questions. Common ones:

• "Can you describe what 'tuition' means in your context?" Yes; it is monthly fees for a martial arts school. Members pay this regularly to attend classes.
• "Why did your volume increase suddenly?" Whatever happened. New event, summer camp signups, end-of-month tuition batch.
• "What happens if a customer disputes?" You handle it through the dispute process. Provide evidence (waiver, attendance, communications).

Answer plainly. Stripe is not trying to trip you up. They are trying to verify you are a real business.

How long the hold lasts

Most holds are released within 5 to 10 business days. If yours is longer, there is usually a specific issue Stripe wants you to address.

If the hold lasts more than 2 weeks, contact Stripe support directly. The dashboard has a chat option for urgent issues.

What your business should do during a hold

• Keep operating normally. Classes run. Charges happen. Families see no change.
• Watch cash flow. If your payouts are paused for 2 weeks, do you have enough cash to cover rent and payroll? Most schools do, but if you are tight, talk to your bank about a short bridge.
• Communicate with staff. Tell them payroll is unaffected (Stripe holds payouts, not payroll). Their direct deposit is from a different source.
• Do not tell families. This is between you and Stripe. Families do not need to know.

What not to do

• Do not open a second Stripe account to bypass the hold. Stripe will see this. It makes things worse.
• Do not switch to a different processor in panic. A switch mid-hold is messy and not necessary.
• Do not stop charging members. That creates a real revenue problem on top of a temporary cash flow problem.

Preventing future holds

Three habits help:

1. Keep dispute rate low. Under 0.5 percent ideally. The disputes article walks through how.
2. Avoid sudden volume jumps without warning. If you are about to run a big event with 10,000 in registrations, send Stripe a heads-up first. They have a "notify of expected volume" option.
3. Keep your business info current. If you move, update the address. If your bank changes, update the routing number. Outdated info triggers reviews.

If you decide to leave Stripe

If you are unhappy with Stripe after a hold, you can switch processors. Common alternatives: Square, Adyen (for larger schools), or PayPal.

The switch takes 1 to 3 weeks because you need to update Rosterra, re-collect cards (Stripe will not export them to a competitor), and migrate active subscriptions.

This is a big move. Most schools weather a one-time hold and stay with Stripe. The grass on the other side has its own problems.

What is permanent

Once Stripe verifies your business and you go a year or two without major incidents, the system learns your patterns and holds become rare. The first 6 months are when most holds happen.