Over the past decade, Stripe has become synonymous with easy, fast payment processing. Startups and small businesses love its plug-and-play setup, modern UI, and developer-friendly documentation. However, there’s an important reality that too many business owners realize too late: Stripe isn’t a bank.
PayFacs like Stripe operate on a shared merchant account model. This means that when you sign up, you’re not actually getting your own merchant account; you’re simply using a sub-account under Stripe’s umbrella. This setup allows for instant onboarding, minimal paperwork, and easy integration. But there’s a catch. Stripe does not do underwriting when you sign up. This means they don’t evaluate your business, your financials, or your risk profile ahead of time. They don’t ask you the hard questions at the beginning—which may feel like a blessing—until it becomes a curse.
Why Stripe Suddenly Freezes or Terminates Accounts
In 2024 alone, millions of merchant accounts were terminated or frozen by PayFacs like Stripe, PayPal, and Square. These weren’t all fraudulent businesses. Many were legitimate operations processing six figures or more per month, but they fell outside of the vague and often arbitrary guidelines set by these platforms. Stripe has an extensive list of restricted businesses, many of which aren’t obviously “high-risk.” If you offer coaching services, sell supplements, host webinars with bold marketing language, or run a membership site, you may already be on thin ice.
The problem becomes more apparent when a business starts scaling. If you suddenly go from processing $20,000 a month to $60,000, Stripe’s automated systems can flag your account. In many cases, they’ll freeze funds, delay payouts, or outright close your account with little to no explanation. This isn’t personal—it’s systemic. Stripe is designed to serve the average business, not the outliers. And anyone processing over $50,000 a month quickly becomes an outlier.
Stripe also monitors refund and chargeback rates, customer complaints, and even the nature of your marketing. If your copy includes phrases like “guaranteed results” or “make money fast,” you may be flagged for violating their “Prohibited Businesses” policy—even if your offer is 100% legitimate and fully compliant by industry standards.
The Need for a True High-Volume Merchant Account
This is where having a merchant account for Stripe—in the proper sense—comes into play. What you truly need is not another sub-account under a PayFac but a fully underwritten, high-volume merchant account through a reliable payment processor or acquiring bank. These accounts take more time to set up. You’ll need to provide documentation, business history, processing projections, and go through a vetting process. But the upside is massive: stability, transparency, and control over your own payment processing.
A dedicated merchant account for Stripe doesn’t necessarily mean working with Stripe itself. In fact, most serious high-ticket businesses transition away from Stripe once they start seeing consistent five- or six-figure months. Instead, they work with merchant service providers that offer Stripe-like integration while providing the robust infrastructure of a traditional merchant account.
These accounts can be tailored to your specific business model. Selling coaching packages? Running a subscription-based service? Managing large-ticket e-commerce transactions? A custom merchant account will be set up to reflect your business type and risk profile—minimizing the chance of shutdowns or withheld funds.
Making the Switch: Next Steps
If you’re processing over $50,000 per month or plan to in the near future, it’s time to explore a merchant account for Stripe alternatives that provide real underwriting, stable payment processing, and the support of a risk team that understands your model.
Start by researching ISOs (Independent Sales Organizations) and merchant account providers that specialize in high-risk or high-volume businesses. Ask about their onboarding process, underwriting standards, chargeback mitigation programs, and integrations with your tech stack. Yes, it’s more work upfront. But in return, you gain peace of mind—and the freedom to scale your business without constantly looking over your shoulder.
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