Managing payments for marketplaces and platforms is harder than for most other businesses: not only do these businesses have to accept money from customers, but they also need to handle funds and pay out to third parties. Adding further complication, paying out money means doing things like checking recipient IDs, reporting taxable income, and a whole host of new tasks.
We first launched Stripe Connect in 2012 to make all of this easier. We're continuing to improve on and add to Connect's functionality to simplify the process of running a marketplace or platform, to allow for faster expansion to new markets, and to enable a growing set of business models.
Support for more business models on Connect
The canonical Connect use case involves routing a single charge from one customer to one recipient—for example, backing a campaign on Kickstarter. But, as consumer needs change and markets evolve, businesses have asked for more powerful and flexible tools to help route payments and handle business logic.
Today, Connect adds support for a variety of new ways to move funds, including the flexibility to split charges and transfers.
- With one-to-many payments, you can can easily split a payment from a single customer between multiple recipients. Imagine the payment for a Postmates order being divided between the restaurant, the courier, and Postmates.
- Many-to-many payments enables platforms to split funds between multiple consumers and multiple third-party vendors or providers. The platforms use Connect to track every part of their payments flow in one place, and they don’t have to manually build and manage a ledger.
- Holding funds gives you escrow-like ability to wait before paying out. Companies like Indiegogo can mitigate risk by waiting until after a campaign or event has occurred, before paying the fundraiser or event organizer. (Holding funds is limited to 90 days.)
- Account Debits lets you debit a recipient’s Stripe account balance, instead of having to collect credit card information. Platforms like ChowNow use this to charge their restaurants for ancillary services, like marketing.
To learn more about these features, check out the Connect documentation.
Faster development and faster user onboarding with Express
We’re also introducing Express, the easiest way to onboard a new seller or recipient. Express handles all the required data collection—from bank account information to identity verification—while being obsessively focused on quick onboarding on both desktop and mobile. You can customize the Express UI so it fits perfectly with your existing signup funnel, and you have the flexibility to control payout schedules. Your recipients can access the Express dashboard through your platform and see when they'll get paid.
Restocks integrated Express for their streetwear marketplace in two weeks, with one engineer. Poppy uses Express to help parents pay sitters and WeTravel uses Express to enable group trips and yoga retreats around the world. In addition to the quick integration, our early users have told us that recipients can get onboarded to their platform, and be ready to accept payments, in just minutes. Learn more about Express.
In addition to Express, platforms can also choose to integrate Connect with Standard accounts or with Custom accounts. Standard accounts (previously known as Standalone accounts) let platforms manage payments on behalf of a constellation of regular Stripe accounts; each seller has their own full Stripe account. Custom accounts (previously known as Managed accounts) are powered entirely by our API, and let the platform create and manage virtual accounts for each marketplace participant. If you're already a Connect user, these name changes won't affect your integration. More on the account types supported by Connect.
Multi-sided platforms across every industry
We’re excited by all the different—and unexpected—use cases businesses are discovering for Stripe Connect!
Squarespace uses Connect to help offline stores easily create a beautiful online presence. Because they use Connect to support their e-commerce offering, they’re able to focus their engineering resources on user-facing features instead.
Kickstarter has found it much easier to expand internationally with Connect, quickly opening up new markets like Mexico, Singapore, and Hong Kong in the past year alone:
Lyft uses Connect to implement its ride-sharing platform. (And within a year of adding support for Connect’s Instant Payouts, more than 50% of Lyft’s payouts to drivers were happening instantly to debit cards.)
These businesses are joined by thousands more, including travel and events companies like TripleSeat, SaaS platforms like DocuSign, rental platforms like Cozy, and insurance companies like Clover Health. Learn more about what platforms use Connect for.
Express and the new fund flow options above are available in the US today, and coming soon in many more countries.
We hope you’ll find these updates useful. Please let me know if you have any feedback or questions. We’re looking forward to seeing the next wave of marketplaces and platforms built on Connect!