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Stripe Policy Change Will Likely Affect Top Esports Tournament Organizers

Microsoft-owned Start.gg is the first organizer to inform users that they can’t use payment processor Stripe for tournaments that involve prize money.

James FudgebyJames Fudge
September 28, 2023
in Money
Stripe Policy Change Will Likely Affect Top Esports Tournament Organizers

Credit: Stripe/Start.gg

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Payment processor Stripe has changed its policy, and as a result, can not be used for esports tournaments that have a prize involved.  Microsoft-owned FGC tournament organizer Start.gg (better known as Smash.gg prior to its rebrand) appears to be the first such organizer to inform its users of the change, according to an email sent to members on Tuesday afternoon. The story was first reported on by Esports Illustrated.

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According to an email sent to members on Tuesday afternoon from Start.gg, beginning Oct. 9, Stripe accounts can not be linked to tournaments with paid events and tournaments and accounts currently linked with Stripe accounts will not be able to add paid events. Further, starting  Nov. 1, users will not be able to use Stripe to register for tournaments with paid events. 

Why the change? According to Start.gg, Stripe recently made a significant policy change that prohibits “Games of skill including video game and mobile game tournaments/competitions, card games, [and] board games with a monetary or material prize.”

The change in the short-term is problematic for Smash.gg users, as they will now have only Paypal to rely on as a  method to process payments, and Paypal isn’t always seamless, particularly in markets outside the U.S.

The Esports Advocate reached out to Stripe for comment on Tuesday, but a company spokesperson said that it could not comment on specific cases or users.  

Through some research TEA has learned that esports and some gaming products with a prize or reward have been categorized under the company’s “Gambling” category of its “Prohibited Businesses” list. 

Credit: The Esports Advocate

The new policy could prove to be problematic in the short term for many small and large esports tournament organizers and platforms that use it as a payment processor such as ESL FACEIT Group, Rally Cry, eFuse, VeraEsports, Twitch, Kick, and many others. TEA Reached out to several of these companies and will update this story when we have more details.

The change is also interesting because Microsoft continues to do business with Stripe on many other fronts; for example, on May 1, Stripe announced the integration of its payment processing tech into Microsoft Teams.

Stripe announced on March 15 that it had raised more than $6.5B USD in a Series I funding round based on a valuation of $50B—down considerably from a previous valuation of $95B. The funding round included GIC, Goldman Sachs Asset and Wealth Management, Temasek, Andreessen Horowitz, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners, and Thrive Capital.

Tags: BLASTeFuseESL FACEIT GroupGamblingGreatest Hits 2023MoneyPayment ProcessorsRally CryStart.ggStripe
James Fudge

James Fudge

James has been covering the video games industry for nearly 23 years. He currently publishes two esports business newsletters: People on the Move and The Fudge Retort.

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