Creating Charges

    Learn what options Connect provides to make charges for, collect platform fees from, and issue transfers to connected accounts.

    Connect lets you use the full Stripe API on behalf of your connected accounts, including the ability to create charges. There are three approaches for creating a charge on behalf of a connected account:

    The documents linked in those bullets explain the corresponding approach in detail, including how to accept platform fees during each process. However, you should first determine which approach is most applicable to your use case, using the information below.

    Choosing an approach

    As many factors go into choosing the best charging approach, the following table presents the most important considerations and examples.

      Use when Examples
    Direct charges
    • End customers directly transact with the connected account, often unaware of the platform's existence
    • A single connected account is involved in the transaction
    • An e-commerce platform like Shopify or Squarespace
    • An accounting platform that enables invoice payments like Freshbooks
    Destination charges
    • End customers transact with the platform for products or services provided by the connected account
    • A single connected account is involved in the transaction
    • A ridesharing service like Lyft
    • A crowdfunding platform like Kickstarter
    Separate charges and transfers
    • Multiple connected accounts are involved in the transaction, or
    • Specific connected account isn't known at the time of charge, or
    • Transfer cannot be made at time of charge
    • An e-commerce marketplace that allows a single shopping cart for goods sold by multiple businesses
    • A house cleaning service where the provider isn't known at the time of booking; provider is paid after cleaning is done

    Normally, a single approach is appropriate, but your platform can use more than one approach, or switch approaches should the business change.

    Because the charging approach you use impacts how funds flow through Stripe, it may help to also read about account balances.

    Direct charges

    We recommend you create direct charges on the connected account when using Standard accounts, although this approach is also appropriate for some Express and Custom accounts.

    Using this approach:

    • The connected account is responsible for the cost of the Stripe fees, refunds, and chargebacks
    • The payment itself appears as a charge in the connected account, not in your platform account
    • Charges directly increase the connected account’s balance
    • Your platform’s balance is only increased via application fees

    Destination charges

    We recommend you create destination charges on the platform account when using Express and Custom accounts.

    Using this approach:

    • Your platform account is responsible for the cost of the Stripe fees, refunds, and chargebacks, handling these for the connected account
    • The payment itself appears as a charge in your platform account, followed by an automatic allocation to the connected account, which decreases your platform’s balance and increases the connected account’s balance
    • Platform fees are earned by allocating less than the entire charge amount to the connected account

    Separate charges and transfers

    The third approach is to create charges on the platform account and then separately transfer funds to the connected account. This approach is similar to creating destination charges, but provides greater flexibility over the flow of funds at the cost of a more complicated integration.

    Using this approach:

    • Your platform account is responsible for the cost of the Stripe fees, refunds, and chargebacks, handling these for the connected account
    • The payment itself appears as a charge in your platform account, with a separate, manual allocation to the connected account, which decreases your platform’s balance and increases the connected account’s balance
    • Funds from charges can be allocated to more than one connected account
    • Platform fees are earned by allocating less than the entire charge amount to the connected account

    Understanding the Stripe fee on Connect charges

    Stripe’s fee for direct charges is determined by the pricing plan of the connected account. Destination charges or separate charges and transfers use the pricing plan of the platform that the charge is created on.

    Destination charges are also settled in the country and currency of the specified account, and use the fee structure for that country. Separate charges and transfers can replicate this behavior using on_behalf_of.

    For platforms interested in custom pricing, we can negotiate a pricing plan that applies to all Custom or Express accounts for that platform.

    Further reading

    Now that you know the ways you can create charges with Connect, read more about a specific approach: