BROKERS have been left baffled following a regulated mortgage brokerage recently having its Stripe payment account abruptly terminated, with one saying it is evidence of “a disconnect between traditional regulation and fintech compliance frameworks”.
Stripe cited its “restricted businesses” policy as the reason for the termination of The Mortgage Stop’s payment account, even after the firm provided full regulatory and business details on appeal, which Stripe rejected.
Concern is growing in the industry that accessing key payment platforms is becoming increasingly difficult for intermediaries, despite their being regulated by the Financial Conduct Authority.
They worry fintech firms like Stripe are beginning to act as gatekeepers, potentially overriding official regulators.
Stripe “overstepping the mark”
Rohit Kohli, Director at The Mortgage Stop, said: “Stripe’s decision is utterly baffling. We’re a small firm and we’ve been cut off by Stripe with no real explanation as to why. Accessing payment services in financial services is far harder than it should be, and this feels like Stripe massively overstepping the mark. Are they targeting all FCA-regulated businesses, or just small brokers like us because we’re easier to shut out? We now need to find a new way to take payments, and bank transfers aren’t ideal. It’s disruptive, frustrating and, frankly, nonsensical.”
Pete Mugleston, Managing Director at onlinemortgageadvisor.co.uk is worried that “this action by Stripe points to a wider trend where platforms are becoming ever more powerful and effectively acting as gatekeepers”.
He added: “The FCA needs to step in and remind these platforms that if you’re regulated, firms small or large shouldn’t have their accounts terminated. Fintech companies are becoming a law unto themselves, and the danger is that they continue this trend, excluding small businesses and brokerages from vital services. They may soon regret their decisions if more companies turn away from them due to their heavy-handedness.”
Platform regulator disconnect
Rob Peters, Principal at Simple Fast Mortgage, said: “This highlights a disconnect between traditional regulation and fintech compliance frameworks. Stripe is risk-averse to a fault, and brokers are left in limbo despite being fully regulated by the FCA. There needs to be an industry-wide conversation to bridge this gap. Platforms shouldn’t be forced to take risks they can’t manage, but equally, regulated firms shouldn’t be cut off from essential financial services they depend on to operate.”
Stephen Perkins, Managing Director at Yellow Brick Mortgages, said this is a “strange decision from Stripe” but there are other option for brokers.
He added: “Broker fees very rarely don’t get authorised when being taken, and virtually never get refunded, so from a card payment provider’s perspective, we are an ideal client. Affected firms will just move to another provider so, whilst a hassle, it’s unlikely to have a major impact unless, for some bizarre reason, other payment service providers follow suit.”
Justin Moy, Managing Director at EHF Mortgages, said Stripe’s policy is “daft”: “I don’t understand the exclusion of regulated businesses by Stripe, arguably the world’s most recognised payment gateway. I suspect the refund figures are low for our industry yet this policy seems too prohibitive. Other providers such as GoCardless happily take mortgage brokers and financial advisers so this policy from Stripe certainly seems daft looking from the outside in.”
Stripe have been approached for comment.
Photo by Matt Seymour on Unsplash
