Does this violate Stripe's ToS?

https://news.ycombinator.com/item?id=36925297

by brenbit • 3 years ago

2 2 3 years ago

news.ycombinator.com

Hi all,

I have a pretty interesting product idea, but I've come to the conclusion that it's dependent on me being able to allow other developers to interact with my Stripe account via an API that I set up.

Fundamentally, this feels like it would violate Stripe's ToS, but I can't find any verbiage that specifically discusses this. I figure as long as I'm vetting the developers properly, it should be fine.

Does anyone have any opinions on this?

davismwfl• 3 years ago

I don't feel like you have given enough information for anyone to answer without making many assumptions.

My take (and hence assumptions) is you want to build a product where other engineers utilize your stripe account while charging fourth parties. I believe standard stripe accounts only allow for end use, not intermediary use. e.g. you can not "repackage" stripe to a third party and allow them to charge on your stripe account. If I understand things properly too, this actually wouldn't even be a Stripe only restriction, this is a restriction by many (most) card networks.

Definitely not a lawyer and not an expert on all things credit card. I did work on a project that tried to do something like this. Our client was wanting to allow their resellers to charge for unrelated products through the companies merchant account. This is essentially repacking and they got smacked by the bank and told this is not allowed by card networks. Now, whether it was just that bank and they lied about the reasoning or not I cannot say. But I know the networks are super touchy about knowing who is charging, for what and the risk profiles etc

brenbit• 3 years ago

Thanks for the feedback! I do apologize for the lack of information in my original post. Here's some additional color that hopefully clarifies my use case a bit more:

Stripe offers a service called Stripe Connect (https://stripe.com/connect) which enables platforms to have intermediary sellers / merchants which collect money from end customers. Ultimately, this can lead to a scenario where an end customer pays a connected account without ever realizing that the primary account (me) is taking a percentage as well (this is allowed and is a primary use case for Stripe Connect).

Ideally, for my scenario, I want connected accounts to have connected accounts of their own. Here's the hierarchy:

My product -> Connected account owned by developer -> Connected account owned by merchant -> Customer paying the merchant

Note: The developer is building tools for the connected merchant account, thus taking a percentage of profits.

Unfortunately, this multi level tree hiearchy is not possible. My proposed workaround is to flatten the Connected account tree (since connected accounts can't have connected accounts of their own), and then allow the "Developer Connected Account" to reach my API so I can piece the two together.

One crucial piece of information here is that the end customer who is entering the credit card information will ultimately be paying the connected account that they are interacting with, so the bank statement will show the correct company.

Also, my API would have checks to ensure that only Connected accounts can interact with it, so Stripe ultimately knows who their customer is.

Does this violate Stripe's ToS?

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