Payments · Guide13 min readUpdated November 3, 2026

Prohibited Businesses by Payment Processor: Stripe, PayPal, Shopify and Square Compared

Stripe, PayPal, Shopify Payments and Square prohibited and restricted businesses compared by category, with the exact wording of each policy.

Nick Bonnassies, CMO at Tagada · checked against 14 sources

Article summary

TL;DR

The four don't ban the same things. Prescription drugs need approval at Stripe and PayPal, but Shopify Payments and Square exclude them. Hidden-price trials are banned at Stripe; Square excludes direct-marketing subscription offers. No list bans supplements, dropshipping or digital products by name. Every list says it isn't exhaustive, so declare what you sell first.

Stripe's list was updated September 22, 2026; Square's terms July 30, 2026; PayPal's Acceptable Use Policy October 29, 2022.
PayPal requires pre-approval for 18 categories, including "Prescription Items" and "Telemedicine Services".
In the US, Shopify Payments applies Stripe's and PayPal's lists on top of its own six categories.
Square names 31 businesses it won't process, including "(13) up-sell merchants".
Stripe names dropshipping only in its Japan section, for advisory services.

Want to go further? Ask

On this page

This page compares the four lists line by line. For the broader comparison (reserves, payouts, closures, card export), see payment processors compared for high-risk ecommerce.

How each processor writes its rules

Each one uses a different document and different levels. The words matter: "restricted" at Stripe and "pre-approval" at PayPal mean you can ask; "may not use" at Square means no.

Processor	Document	Date	Levels
Stripe	ProhibitedAnd restricted businesses	Updated September 22, 20261	Prohibited; restricted (approval after due diligence); prohibited uses; 11 country lists
PayPal	Acceptable Use Policy	Updated October 29, 20224	ProhibitedActivities; 18 "Activities Requiring Approval"
Shopify Payments (US)	Eligibility page, Payments terms	Undated6 7	6 prohibited categories, plus the lists of Stripe and PayPal
Square (US)	Payment Terms, section 3	Updated July 30, 202610	31 businesses you "may not use the Payment Services" for

Fig. 1Three answers you can get

Prohibited
Named on the list. Stripe makes rare exceptions "with explicit prior approval"; the others publish none.
Approval first
Stripe's restricted list and PayPal's pre-approval chart. Apply before you process.
Not named
Open by default, then judged on claims, sales practices and disputes.

not named is the start of a review, not a yes

Stripe, PayPal, Shopify and Square policies, read November 3, 2026.

Stripe's FAQ says it might support listed businesses "with explicit prior approval", but "Certain categories, including illegal products or services, are never eligible"2. PayPal treats skipping a required approval as its own violation: you may not use PayPal for "any activity that requires pre-approval without having obtained said approval"4.

Shopify Payments applies Stripe's and PayPal's lists

On Shopify Payments, three lists apply at once. Your store can be fine and your payments not.

The types of business categories and business practices that are considered Prohibited Businesses or Restricted Businesses are provided by each Payment Processor in your Designated Country

Shopify Payments Terms of Service (US), read November 3, 2026

Shopify's processor list names Stripe, Inc. and PayPal, Inc. for the United States, with links to Stripe's list and PayPal's Acceptable Use Policy8. Shopify adds its own six categories, and "certain business models that, while legal, Shopify Payments can't support"6.

The store itself follows a separate, shorter rule: "You can't use Shopify to do anything that's illegal where you do business"9. A business Shopify Payments refuses can often still sell on Shopify with a third-party provider: see high-risk payments for Shopify stores.

Ecommerce categories compared

These are the categories that catch ecommerce brands. "Not named" means the category doesn't appear on the list; the general lines in the next sections still apply.

Category	Stripe1	PayPal4	Shopify Payments6	Square10
Nutraceuticals, supplements	ProhibitedIf "not safe or make harmful claims"	Not named; "products that present a risk to consumer safety" prohibited	ProhibitedAs "Pseudo pharmaceuticals" if health claims aren't verified	Not named
Online pharmacy	ConditionalRestricted	ConditionalPre-approval, "Prescription Items"	Prohibited"prescription drugs"	ProhibitedRemote-consult pharmacies, item 8
Telehealth	ConditionalRestricted (prohibited in Mexico)	ConditionalPre-approval, "Telemedicine Services"	Not named; prescription drugs excluded	ProhibitedWhen medication follows a remote consult, item 8
Free trials, negative option	ProhibitedWith "unclear or hidden pricing"	Not named	Not named on its own list	Prohibited"buyers or membership clubs", item 3
Subscriptions, upsells	Prohibited"high-pressure upselling"	Not named	Not named on its own list	Prohibited"direct marketing or subscription offers", "up-sell merchants"
Dropshipping	Not named, except advisory services in Japan	Not named; closest line on items not yet in the seller's possession	Not named	Not named
Digital products	Not named; unauthorized "licensed materials" prohibited, cyberlockers restricted	Not named; stolen "digital and virtual goods" prohibited, file-sharing needs approval	Not named; access to "counterfeit music" or licensed materials prohibited	Not named
Business opportunities, MLM	Prohibited"Get rich quick" schemes, pyramid schemes, recruitment-based MLM	Prohibited"get rich quick" schemes, "certain" MLM; MLM and direct selling need approval	Not named on its own list	Prohibited"unauthorized multi-level marketing businesses", item 9

Verdict

For ecommerce brands, the lines that bite most at Stripe and Square are about how you sell (trials, upsells, direct-marketing subscriptions), not what you sell.

On Shopify Payments in the US, a category Shopify doesn't name can still be caught by Stripe's or PayPal's list7 8.

Nutraceuticals and health claims

No processor bans supplements by name. Three of them ban unsafe products or unverified health claims.

Stripe prohibits "Pseudo-pharmaceuticals or nutraceuticals that are not safe or make harmful claims"1.
Shopify Payments prohibits "Pseudo pharmaceuticals: Pharmaceuticals and other products that make health claims that are not verified by a local or national regulatory body"6.
PayPal prohibits transactions involving "narcotics, steroids, certain controlled substances or other products that present a risk to consumer safety"4.
Square doesn't name supplements. Its catch-all, "(20) high-risk products and services, including telemarketing sales", is undefined10.

Stripe's claims line works with the product line: it also prohibits businesses that "make outrageous claims, use deceptive testimonials, use high-pressure upselling, or use fake testimonials"1. How claims tip a product into "pseudo-pharmaceutical": what pseudo-pharmaceutical means.

Pharmacy and telehealth

This is where the four split most. Two allow an application; two exclude the model.

	Stripe	PayPal	Shopify Payments	Square
Status	ConditionalRestricted1	ConditionalPre-approval4	ProhibitedFor prescription drugs6	ProhibitedFor remote-consult pharmacies10
Exact line	"Online pharmacies, including SaaS platforms"; "Telemedicine and telehealth services"	"The sale of any product(s) requiring a prescription or prescription dispensing services"; "Providing medical services and consultations in a remote fashion"	"Products or services that require regulatory approval or compliance, such as cannabis and related products, prescription drugs, medical devices"	"internet/mail order/telephone order pharmacies or pharmacy referral services (where fulfillment of medication is performed with an internet or telephone consultation, absent a physical visit…)"
Note	Pharmacies approved only in the US, Canada, the EU, Australia, the UK and Japan2	Medical devices and licensed health-care services also need approval4	Telemedicine itself isn't named	A consult with no medication isn't named

Stripe's FAQ adds that "Telemedicine businesses don't need certification from LegitScript", while licensing items must be provided2. For prescription and telehealth brands, Tagada Rx runs the storefront, doctors, pharmacy and payments in one stack, by application: see Tagada Rx 13.

Trials, subscriptions and upsells

The sales model gets more businesses refused than the product. Stripe and Square name it most.

Negative option marketing, negative option membership clubs, and reduced price trials with unclear or hidden pricing

Stripe, Prohibited and restricted businesses, updated September 22, 2026

Stripe prohibits the trial line above, plus "Businesses offering unrealistic incentives or rewards as an inducement to purchase products or services"1.
Square doesn't support "(3) buyers or membership clubs, including dues associated with such clubs", "(6) direct marketing or subscription offers or services", "(7) infomercial sales", "(12) rebate based businesses" and "(13) up-sell merchants"10.
PayPal names none of these in its Acceptable Use Policy4.
Shopify Payments names none on its own list; Stripe's lines apply in the US6 8.

Square sells its own subscription tool, so its "subscription offers" line reads as aimed at continuity offers sold through direct marketing. Square doesn't define it: ask before you launch. The card network rules behind these lines: free trials and negative option billing.

Dropshipping and digital products

Neither is banned as such. What's banned sits around them: unauthorized resale, counterfeits, pirated files.

Dropshipping. Stripe's guide says "Stripe can support dropshippers"3. Its list names dropshipping only in Japan, as "Advisory services related to drop shipping and the resale of goods"1. PayPal's closest line prohibits transactions "for the sale of certain items before the seller has control or possession of the item"4. It says "certain items" and doesn't define them. Shopify and Square don't name dropshipping6 10.

Digital products. Stripe prohibits "Sales or distribution of music, movies, software, or any other licensed materials without appropriate authorization" and restricts "Cyberlocker and file-sharing services"1. PayPal prohibits "stolen goods including digital and virtual goods" and requires approval for file-sharing and for "virtual in-game currencies, or non-fungible tokens"4. Shopify Payments prohibits access to "counterfeit music, use of the Shopify trademarks, or other licensed materials"6.

Fig. 2Where a dropshipping or digital store gets caught

Resell a brand without authorizationStripe: unauthorized brand-name salesKeep supplier authorizations on file
Take payment before you hold stockPayPal: certain items not yet in your possessionAsk PayPal about your model
Sell files you don't ownStripe, PayPal, Shopify: unauthorized licensed materialsSell only what you hold rights to
Host files for other creatorsStripe restricted, PayPal approvalApply before launch

the risk is in the practice, not the label

Stripe list, September 22, 2026; PayPal Acceptable Use Policy, October 29, 2022; Shopify Payments eligibility, read November 3, 2026.

Business opportunities and MLM

Income claims are banned nearly everywhere. Recruitment-based models need approval or are excluded.

Stripe prohibits "Pyramid schemes", "Multilevel marketing services offering commission or recruitment-based sales" and "'Get rich quick' schemes, including investment opportunities or other services that promise high rewards to mislead consumers"1.
PayPal prohibits transactions that "support pyramid or ponzi schemes, matrix programs, other 'get rich quick' schemes or certain multi-level marketing programs", and requires pre-approval for "Multilevel Marketing and Direct Selling Organizations"4.
Square doesn't support "(9) unauthorized multi-level marketing businesses"10.
Shopify Payments doesn't name them; Stripe's and PayPal's lines apply in the US6 8.

Coaching and courses aren't named on any of the four lists. The line that catches them is the promise of easy money, not the format.

Other categories compared

Outside ecommerce, the lists agree more. Shopify Payments is the strictest on regulated goods.

Category	Stripe1	PayPal4	Shopify Payments6	Square10
Adult content	Prohibited	ProhibitedFor "certain sexually oriented materials"; digital adult content needs approval	Prohibited	ProhibitedItem 22
Gambling	Prohibited	ConditionalPre-approval	Prohibited	ProhibitedItem 15
Firearms	ConditionalRestricted, limited availability	Prohibited	Prohibited	ProhibitedItem 23
Cryptocurrency	ConditionalExchanges and wallets; mining prohibited	ConditionalPre-approval	Prohibited	Not named
Tobacco, e-cigarettes	ConditionalRestricted	Cigarettes prohibited; e-cigarettes need approval	Prohibited	ProhibitedOnline, item 24
Credit repair	Prohibited	ProhibitedFor "certain credit repair, debt settlement services"	Prohibited	ProhibitedItem 4

Not on the list isn't a yes

Every list says it's a sample. Stripe: "this is not an exhaustive list"1. Shopify: "The list of prohibited products and services isn't exhaustive and it varies depending on your region"6. Shopify's terms add that lists can change "at any time without notice to you"7.

Rules on how you use the account apply to every business, whatever it sells:

Stripe prohibits processing "for products or services that weren't disclosed in the business's Stripe account application" and "Evasion of card network chargeback monitoring programs"1.
PayPal can hold your balance "for up to 180 days" if you violate its Acceptable Use Policy5.
Square excludes you if you are "connected in any way to any other business that conducts illegal activities", even outside Square10.
Stripe typically pauses payouts for 120 days after an unacceptable risk action11.

Watch out

Spreading sales over several accounts to stay under a dispute threshold is evasion. Visa can fine the acquirer up to $25,000 per merchant per month for altering merchant data to avoid its monitoring programs12.

Tagada follows Visa and Mastercard rules and the laws that apply to payments.

If your business is on a list

Pick the route that matches what the list says. None of them involves hiding what you sell.

Approval route (Stripe restricted, PayPal pre-approval): apply before you process and send the licenses and business details asked1 4.
Prohibited at one, not named at another: declare the category to the second processor and get its answer in writing.
On Shopify Payments: check Shopify's six categories and the lists of Stripe and PayPal6 8. If refused, a third-party provider can replace Shopify Payments.
Excluded everywhere, but legal: apply to a provider that underwrites your category. See high-risk merchant account and merchant account approval.
Already processing: keep a second, declared processor. See multiple merchant accounts.

Each processor decides what falls under its lines. Declare every product, wherever you process.

Each processor's full list, explained: Stripe, PayPal, Shopify, Square.

By industry

Industry	Where the lists bite	Guides
Supplements	Health claims, trials, upsells	Stripe · PayPal and Square · Shopify
Skincare	Drug-like claims, refill subscriptions	Stripe · PayPal and Square · Shopify
Fitness	Claims, upsells, direct-marketing subscriptions	Stripe · PayPal and Square · Shopify
Info products	Income claims, MLM lines	Stripe · PayPal and Square · Shopify
Online pharmacy	RestrictedPre-approval or excluded	Stripe · PayPal and Square · Shopify
Telehealth	RestrictedPre-approval, remote-consult pharmacies	Stripe · PayPal and Square · Shopify

How Tagada helps

A processor that reviews your category first

Prescription and telehealth: Tagada Rx, by application13.
Acceptance: "Enhanced review for regulated verticals" and "100+ verticals live"14.
Keep what you have: "Already on Stripe, NMI or Airwallex? We orchestrate those too."14
Routing: "Route to the processor most likely to approve it, retry on decline. No engineering required."14
A vault you own: "Switch processors without re-onboarding customers. No vendor lock-in. Ever."14

Apply today

Apply for processing

A processor that reviews your category first

Updated on November 3, 2026

Nick Bonnassies

CMO at Tagada

CMO at Tagada. Before Tagada, Nick built direct-to-consumer brands that generated over $115M in sales, raised over $25M in crowdfunding and sold two of them. He also works as a fractional CMO on marketing operations and AI systems.

Frequently asked questions

What businesses are prohibited by most payment processors?

Across Stripe, PayPal, Shopify Payments and Square, the common ground is illegal goods, counterfeits, adult content, credit repair and pyramid or "get rich quick" schemes. Gambling, firearms, crypto and tobacco split: banned at some, approval-only at others. Each list says it's a sample, not the whole rule.

What is the difference between prohibited and restricted?

Prohibited means the processor won't support the business. Restricted, at Stripe, means it may after "additional due diligence", such as licenses. PayPal's equivalent is pre-approval. Shopify Payments and Square publish no approval route for their listed categories.

Does PayPal allow supplements?

PayPal doesn't name supplements. Its policy prohibits "products that present a risk to consumer safety" and requires approval for prescription items and medical devices. A supplement with drug-like claims can fall under those lines. More in our guide on PayPal and Square for supplements.

What businesses can't use Square?

Square's US terms list 31, including "direct marketing or subscription offers or services", "infomercial sales", "up-sell merchants", remote-consult pharmacies, firearms and "high-risk products and services". Its terms were last updated July 30, 2026. The full list: Square prohibited businesses.

Is dropshipping allowed on Stripe and PayPal?

Neither bans it by name. Stripe's guide says it "can support dropshippers", and its list names dropshipping only for advisory services in Japan. PayPal prohibits sales of "certain items before the seller has control or possession of the item" without defining them. Long delivery times and disputes are the real risk.

Does Shopify Payments have its own prohibited list?

Yes, six categories: regulated or illegal products, financial services, adult products, pseudo pharmaceuticals, gambling and counterfeits. In the US, the lists of its processors, Stripe and PayPal, apply on top.