It’s a scenario no Shopify merchant wants to face: logging into your account to discover that your Shopify Payments are either suspended or on hold. Suddenly, your ability to process transactions is frozen, and you’re left wondering what went wrong and how to fix it. If you’ve found yourself in this situation, don’t panic—there are steps you can take to get back on track.
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Why Do Shopify Payments Get Suspended or Put On Hold
First, let’s dive into why Shopify might suspend or put a hold on your payments. Shopify, like many other payment processors, has strict policies designed to prevent fraud, ensure compliance with regulations, and protect both the platform and its users. Here are a few common reasons why your Shopify Payments might be affected:
Reason 1: High Risk Industries
Certain industries are flagged as high-risk by payment processors due to the nature of the products or services they offer, which tend to have higher rates of chargebacks, fraud, and regulatory scrutiny. These industries often involve goods or services that are subject to legal complexities, fluctuating regulations, or a high potential for disputes. For example:
CBD Products: The sale of CBD and hemp products is heavily regulated, with laws varying significantly between states and countries. Despite growing legalization, many banks and payment processors still consider CBD to be a high-risk industry due to the potential for legal issues and the high rate of chargebacks, often related to misunderstandings about product legality or effectiveness.
Supplements: Dietary and nutritional supplements are another high-risk category. This industry is prone to chargebacks due to customer dissatisfaction, disputes over health claims, or side effects. Additionally, regulatory bodies like the FDA closely monitor these products, which adds an extra layer of risk for payment processors.
Adult Products & Entertainment: Businesses in the adult entertainment industry face unique challenges. The stigma attached to the industry, coupled with high levels of chargebacks (often due to customer regret or disputes over billing), makes these businesses high risk. Furthermore, they operate in a sector that is closely watched by regulatory authorities, which adds to the complexity.
Financial Services: Certain financial services, especially those involving cryptocurrencies, payday loans, or credit repair, are also deemed high-risk. These services are often subject to strict regulatory requirements and have higher rates of fraud and chargebacks, making them less attractive to mainstream payment processors.
Because these industries carry a higher risk of financial loss for payment processors, businesses operating within them often face higher fees, stricter contract terms, and more frequent payment holds or account suspensions. For a full list of industries considered high risk visit our page on how to open a high risk merchant account.
Reason 2: Excessive Chargebacks
Chargebacks occur when a customer disputes a transaction with their credit card issuer, and the funds are reversed from the merchant’s account. While chargebacks are a standard part of doing business, especially online, an excessive number can signal to payment processors that there is a problem. High chargeback rates can indicate a variety of issues, such as:
Fraud: High levels of chargebacks can also indicate that a business is being targeted by fraudsters. For instance, if a merchant is unknowingly processing payments from stolen credit cards, the legitimate cardholders will dispute the charges, resulting in chargebacks.
Poor Customer Service or Product Quality: If customers feel they didn’t receive what they paid for, they’re more likely to initiate a chargeback. This can be especially problematic in industries where customer expectations are not met, leading to frequent disputes.
When chargeback rates rise above industry thresholds (typically around 1-2% of total transactions), Shopify may flag the account as high risk. This could lead to payment holds, where funds are temporarily withheld while the situation is reviewed, or even account suspension if the issue persists
Reason 3: Policy Violations Can Cause Shopify Payments to Suspend an Account
Every platform has a set of rules and regulations that merchants must follow, and Shopify is no exception. These policies are in place to ensure that all sellers operate within legal and ethical boundaries. Common policy violations that can lead to payment holds or suspensions include:
Selling Prohibited Items: Shopify prohibits the sale of certain items, such as counterfeit goods, weapons, and illegal substances. If your store is found to be selling any of these, Shopify may immediately suspend your payments and potentially close your account.
Misrepresentation of Products: If you’re selling products that aren’t accurately described, or if you’re using misleading information in your listings, Shopify may view this as a violation of their terms of service. This can lead to customer complaints, chargebacks, and ultimately, a suspension of your payments.
Non-Compliance with Local Laws: Depending on your location and the nature of your business, there may be specific regulations you need to follow. If Shopify determines that your store isn’t complying with local laws, they may put a hold on your payments while the situation is resolved.
Regularly reviewing Shopify’s terms of service and ensuring that your business practices are in full compliance is the best way to prevent suspensions or holds for shopify payments.
Reason 4: Shopify Payments & Verification Issues
Before you can fully utilize Shopify Payments, Shopify may require additional information to verify your business’s legitimacy. Verification issues typically arise when:
Inconsistent or Missing Information: If there are discrepancies in the information provided during account setup, or if required documents are missing, Shopify may place a temporary hold on your payments until everything is verified.
Unusual Activity: If Shopify detects unusual activity, such as a sudden spike in sales or transactions from high-risk regions, they may require additional verification to ensure that your account hasn’t been compromised.
Regulatory Requirements: Depending on your business type and location, there may be additional regulatory requirements that Shopify needs to verify. For example, businesses dealing in financial services or healthcare may need to provide extra documentation to ensure compliance with relevant laws.
If your payments are on hold due to verification issues, it’s important to respond quickly. Gather any requested documents, such as proof of business registration, identification, and product details, and submit them to Shopify for review. The sooner you can provide the necessary information, the faster Shopify can lift the hold and allow you to resume normal operations.
Immediate Steps to Take If Shopify Suspended Your Account
So, you’ve discovered that your payments are on hold—what’s next? While companies like Shopify are notorious for suspending an account indefinitely, there are cases when you can get it up and running again. That being said be prepared to seek a backup or entirely new payment processor, like Durango Merchant Services, that can integrate with shopify. Here’s a step-by-step guide to try and get your shopify payments account back in good standing:
1. Understand the Reason for the Hold
The first thing you need to do is understand why your payments were suspended or put on hold. Shopify typically sends an email or notification explaining the reason. If you’re unsure or need more details, reach out to Shopify Support directly. Knowing the exact cause will help you determine the right course of action.
2. Review Shopify’s Terms of Service
Take a moment to review Shopify’s terms of service, especially the sections related to prohibited items and high-risk industries. This will give you a better understanding of whether your store’s products or practices might be the issue. If your business falls into a high-risk category, you may need to look into alternative payment processing options.
3. Gather the Necessary Documentation
If the hold is due to verification issues, gather any required documents such as proof of business registration, identification, or product information. Submit these documents promptly to avoid further delays. The faster you can provide the necessary information, the sooner Shopify can review your account and lift the hold.
Exploring Alternative Payment Processing Solutions
If Shopify Payments has put your account on hold, it might be because your business is classified as high-risk. This designation can make it difficult to continue using mainstream payment processors like Shopify Payments. But don’t worry—there are other options out there, specifically designed to cater to businesses like yours. These specialized high-risk payment processors offer the tools and flexibility you need to keep your business running smoothly.
What is High-Risk Payment Processing?
High-risk payment processing is tailored for businesses that operate in industries prone to higher levels of chargebacks, fraud, or regulatory scrutiny. Companies in sectors like CBD products, adult entertainment, travel, and financial services often fall into this category. High-risk payment processors understand the unique challenges these businesses face and provide solutions that standard processors typically don’t offer.
For example, a high-risk processor will offer more robust chargeback management tools. Chargebacks are a significant concern for high-risk businesses, as they can lead to financial losses and further account restrictions. High-risk processors provide strategies and systems designed to reduce chargebacks, helping you maintain a healthier account and avoiding future holds or suspensions.
In addition to chargeback protection, these processors deploy advanced fraud detection systems. Fraud can cripple a business, especially in high-risk industries, where the stakes are even higher. These systems are designed to identify and block suspicious transactions before they impact your business, offering peace of mind and financial security.
Moreover, high-risk processors provide customizable payment options. This flexibility is vital for businesses that need to accept a wide range of payment types and currencies, especially if you’re operating internationally. With a high-risk processor, you can tailor your payment solutions to fit your specific needs, ensuring that your customers have a seamless experience, regardless of how or where they’re making their purchases.
Integrating High-Risk Payment Processing with Shopify
If you determine that a high-risk payment processor is the right move for your business, the next step is integration with your Shopify store. The thought of integrating a new processor might seem daunting, but with the right support, it’s typically a smooth process.
Finding the Right High-Risk Payment Processor
Choosing the right high-risk payment processor is crucial. Not all processors are created equal, so it’s important to find one that aligns with your business’s unique needs. Factors to consider include the processor’s experience in your industry, their reputation, and the quality of their customer support. Durango Merchant Services is a highly regarded option for high-risk businesses. They specialize in working with industries that face challenges with traditional payment processors, offering personalized support and tailored solutions.
Durango Merchant Services understands the complexities of high-risk industries and provides a hands-on approach to ensure a seamless transition. They offer comprehensive support throughout the process, from the initial setup to ongoing account management. Their expertise can be particularly beneficial if you’ve recently had your Shopify Payments account suspended, as they can guide you through the process of securing a new payment solution without further disruptions to your business.
Steps to Integrate a High-Risk Processor with Shopify
1. Set Up a Merchant Account:
The first step is to apply for a merchant account with your chosen high-risk processor. This process involves providing detailed information about your business, including your transaction history, the nature of your products or services, and any previous payment processing issues. Durango Merchant Services, for instance, will work closely with you to gather the necessary information and ensure that your application is thorough, increasing your chances of a swift approval.
2. Integrate the Processor with Shopify:
Once your merchant account is approved, the next step is integration. This might involve using an API or a third-party app to connect the high-risk processor to your Shopify store. While this can sound technical, most processors, including Durango Merchant Services, provide detailed instructions and dedicated support to guide you through the setup. They’ll ensure that the integration is smooth and that your store’s payment system is up and running with minimal downtime.
3. Test the Integration:
Before going live, it’s important to test the integration thoroughly. This involves processing a few test transactions to ensure that everything is functioning as expected. Durango Merchant Services can assist with this testing phase, helping you identify and resolve any issues that might arise. By testing the system thoroughly, you can ensure that customers will be able to complete their purchases without any hiccups once the integration is live.
Why Partnering with Durango Merchant Services is a Smart Move
If you’ve had your Shopify Payments account suspended, turning to a high-risk payment processor like Durango Merchant Services can be a game-changer. Durango offers more than just a payment processing solution—they offer a partnership. With our extensive experience in high-risk industries, we’re equipped to handle the unique challenges your business faces. We provide personalized support, ensuring that your payment processing system is not only secure but also optimized for your specific needs.
By choosing Durango Merchant Services, you’re investing in a payment processing solution that understands your business, and the process you are going through, offering the tools and support you need to operate smoothly and securely. Whether you’re dealing with chargeback management, fraud prevention, or simply navigating the complexities of high-risk transactions, Durango has you covered. Their expertise allows you to focus on what you do best—running and growing your business—while they take care of the rest.
Real-World Examples: How Other Businesses Navigated Payment Holds
When your payment processor suddenly puts a hold on your account, it can feel like the rug has been pulled out from under your business. However, many companies have faced similar challenges and found effective solutions to keep their operations running smoothly. Let’s dive into two real-world examples that highlight how businesses in high-risk industries overcame payment holds by strategically partnering with specialized payment processors.
Case Study 1: A CBD Business Overcomes Shopify’s Payment Hold
A small CBD retailer had been steadily growing its customer base, thanks to the increasing popularity of CBD products. However, this success came to a grinding halt when Shopify Payments abruptly placed a hold on their account. The reason? Shopify classified CBD as a high-risk product due to the complex and often inconsistent legal landscape surrounding cannabis-related products. Despite the legality of their business, the retailer found themselves unable to process payments, putting their entire operation in jeopardy.
The business owner knew they needed a solution quickly. They began researching alternative payment processors that had experience with the CBD industry. After careful consideration, they decided to partner with a high-risk payment processor that specialized in CBD transactions. This processor understood the unique challenges of the CBD market, including the higher rates of chargebacks and the need for compliance with varying state and federal regulations.
Once they made the switch, the transition was smooth. The new payment processor provided advanced tools for chargeback management, which was a game-changer for the retailer. These tools included real-time monitoring of transactions, automatic dispute management, and tailored support to help the business reduce the risk of chargebacks. With these systems in place, the retailer not only resumed their payment processing but did so with greater confidence and security.
Additionally, the high-risk processor offered customizable payment solutions, allowing the retailer to accept a wider range of payment types and currencies. This flexibility enabled them to reach a broader audience, including international customers, which further bolstered their growth. The business was able to stabilize its operations quickly, continue to grow its customer base, and avoid the disruptions they had faced with Shopify Payments.
Case Study 2: High-Risk Adult Entertainment Store Finds a Solution
In another example, an online store specializing in adult entertainment products encountered significant hurdles with Shopify Payments. The nature of their business led to frequent chargebacks, which not only affected their cash flow but also triggered Shopify to flag their account as high-risk. As a result, the store faced repeated payment holds, severely impacting their ability to operate.
The store owner quickly realized that continuing with Shopify Payments was unsustainable. They needed a payment processor that understood the nuances of the adult entertainment industry—one that could provide the necessary support to manage high chargeback rates and navigate the industry’s unique challenges.
After evaluating several options, the store partnered with a high-risk payment processor that catered specifically to the adult entertainment sector. This processor offered specialized fraud protection services tailored to the industry, including advanced fraud detection systems that could identify and block suspicious transactions before they became a problem.
The switch also provided the store with access to better customer support. The high-risk processor’s team was knowledgeable about the challenges faced by businesses in the adult entertainment industry and was able to offer personalized advice and support. This made a significant difference, as the store could now focus on expanding its product line and marketing efforts without the constant worry of payment disruptions.
With the new processor in place, the store not only resolved the payment hold issue but also gained a more stable and secure payment processing system. The enhanced fraud protection and chargeback management tools allowed the business to operate more efficiently, reducing the time and resources spent on managing payment-related issues. As a result, the store was able to shift its focus back to growing the business, confident that their payment processing was in good hands.
Lessons Learned: Why Choosing the Right Payment Processor Matters
These case studies highlight the importance of choosing the right payment processor, especially for businesses operating in high-risk industries. Both the CBD retailer and the adult entertainment store were able to overcome significant challenges by partnering with payment processors that understood their specific needs. Whether it’s managing chargebacks, navigating complex regulations, or providing advanced fraud protection, a specialized high-risk payment processor can make all the difference in keeping your business running smoothly.
For businesses facing similar challenges, Durango Merchant Services offers the expertise and tailored solutions needed to navigate the complexities of high-risk payment processing. By choosing a partner who understands your industry, you can not only resolve immediate payment issues but also build a more resilient and scalable operation for the future.
Durango Merchant Services is Here to Make Sure You Can Continue to Process Electronic Payments.
If Stripe closes your account, transitioning to Durango Merchant Services offers several key benefits that can help stabilize and enhance your payment processing capabilities:
1. High-Risk Merchant Services Expertise
Durango Merchant Services specializes in providing payment solutions for high-risk businesses, which often face challenges with traditional payment processors like Stripe. This expertise means they are well-equipped to handle industries and business models that might be flagged as high-risk, ensuring you have a reliable payment processing partner even if you’ve faced account closures elsewhere.
2. Flexible Payment Gateway Options
Durango Merchant Services offers flexible and customizable payment gateway solutions. Whether you need a gateway that supports advanced fraud prevention tools, recurring billing, or multi-currency processing, Durango has options to fit your needs. Their gateways can be integrated seamlessly into your existing systems, reducing the hassle of transitioning from Stripe.
3. Gateway Emulator Feature
One of the standout features of the Durango Pay Gateway is the gateway emulator, which allows you to switch to Durango’s services without extensive reprogramming. This tool emulates the behavior of your previous gateway, making the transition smooth and minimizing disruption to your business operations.
4. Dedicated Support and Service
Durango Merchant Services prides itself on offering personalized customer support. Unlike the often impersonal service provided by large payment processors, Durango assigns dedicated account managers to help you navigate any issues and optimize your payment processing setup. This hands-on support can be invaluable, especially if you’ve recently faced the challenges of an account closure.
5. Comprehensive Fraud Prevention
Durango provides robust fraud prevention tools and services, helping you protect your business from chargebacks and fraudulent transactions. Their advanced monitoring systems and customizable security settings ensure that your transactions are secure, giving you peace of mind and reducing the risk of future account closures.
6. Competitive Rates and Transparent Pricing
Durango offers competitive processing rates and transparent pricing structures. They work with you to create a pricing plan that suits your business model, potentially lowering your processing costs compared to what you might have experienced with Stripe.
7. Alternative Payment Options
With Durango, you can offer a wide range of payment options to your customers, including ACH, e-checks, and various credit card types. This flexibility can help you cater to a broader customer base and improve your overall sales.
8. Experience with Recovery and Transition
Durango Merchant Services has extensive experience helping businesses recover from account closures and transitions. Their team can provide strategic advice and practical solutions to get your payment processing back on track quickly and efficiently.
Switching to Durango Merchant Services after a Stripe account closure can provide stability, support, and flexibility. Their expertise in high-risk industries, combined with robust fraud prevention tools, competitive pricing, and dedicated customer service, makes us a strong alternative for businesses looking to secure their payment processing and avoid future disruptions.
For more information, visit Durango Merchant Services.
