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JustiFi helps us handle payments securely and efficiently within our platform. We can’t process payments ourselves because it requires complex financial infrastructure, strict compliance with banking regulations, and risk management (like fraud prevention and chargebacks). Instead of spending time and resources building this from scratch, we use JustiFi to process transactions, manage payouts, and ensure compliance—allowing us to focus on improving our software while offering our users seamless payment experiences.
This is complex, but it boils down to liability and underwriting your ability to deliver services that customers have paid for.
Here's a real-world example: Imagine you have a large franchise with 100 teams, processing $2M in annual team fees. In the unlikely event that someone collected all these fees and disappeared, parents would rightfully dispute the charges with their credit card companies and banks. When this happens, Visa or Mastercard would typically charge back the funds to the customers, then look to recover $2M from JustiFi and their banking partners – who have essentially underwritten this risk.
Here's the behind-the-scenes part: Payment processors like JustiFi work closely with their banking partners to assess and manage this risk. They look at things like your processing history, business financials, and credit profile to determine appropriate processing limits and reserve requirements. Think of it like a credit check – banks need to know they can trust businesses with large sums of customer money. Sometimes they might require a reserve fund to be held, especially for seasonal businesses or those with advance payments.
By collecting and verifying your financial information upfront, we're able to establish the right processing limits for your business while protecting everyone involved. This helps ensure you can process payments smoothly without unnecessary holds or interruptions.
Here’s an article with pictures to explain in more detail:
A Detailed Guide on AML Requirements for Payment Processors
Fraud. If businesses could accept payments without verifying identities, criminals could easily launder money through legitimate companies.
Take Walter White in Breaking Bad, for example. He bought a cash-based car wash so he could mix in money from his meth empire and deposit it in the car wash's account. If the car wash relied on credit cards and ACH, the authorities would've compared Walter's reported income to the credit card receipts, identified him as the owner through KYC laws, and realized something was off. The unfortunate tradeoff for the rest of society is legitimate businesses have to sacrifice a bit of privacy to merchants and the government.
Stripe, JustiFi, and all the others have to comply with this law 👇
We selected JustiFi as our processor of choice due to the level of support and access to real people when needed. JustiFi also lets us embed additional offerings like buy-now-pay-later, cancelation insurance, and others that we will continue to introduce over time.
The main reason is large-scale processors like Stripe will simply turn off your business and ask questions later, something that actually happened to us in the early days of StatStak. Here are some more horror stories:
Stripe is rated "Poor" with 2.1 / 5 on Trustpilot
This is bad. There are more and more Stripe horror stories like this, and from a... | Hacker News
Still don’t believe us? Just Google ‘Should I use Stripe?’ and enjoy reading the thousands of horror stories from businesses that have been shut down.
Yes. JustiFi has robust documentation on this topic, so we’ll refer you to them