Creating charges

    Learn how Connect lets you make charges and issue transfers for connected accounts. Stripe fees are determined by how you configure these options.

    Connect lets you use the full Stripe API on behalf of your connected accounts, including the ability to create charges. See the sections of this page and the following pages for details:

    Choosing an approach

    Choosing the best charging approach depends on many factors. The following table can help you choose the best approach for your use case:

      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 services platform like Thumbtack
    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 scooter-sharing platform like Bird, where scooters are booked when platform customers want them, and people are paid to charge the scooters' batteries at a different time

    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 that you create direct charges on the connected account when using Standard accounts, although this approach is also appropriate for some Express and Custom accounts. With 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 increases only with application fees

    Destination charges

    We recommend that you create destination charges on the platform account when using Express and Custom accounts. With this approach:

    • Your platform account is responsible for the cost of the Stripe fees, refunds, and chargebacks, handling these for the connected account by default
    • 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

    Separate charges and transfers

    If your platform needs more flexibility in how funds move than destination charges can provide, you can create the charge on your platform account and separately transfer funds to the connected account. The tradeoff is a more complex integration. With this approach:

    • The platform is responsible for the cost of the Stripe fees, refunds, and chargebacks by default
    • 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

    Because of the additional programming and operations required, this approach is more appropriate for businesses with any of these qualities:

    • A one-to-many correlation between charges and transfers (e.g., a charge made to a delivery service needs to be split between the business—the source of the items being delivered—and the delivery person)
    • A many-to-one correlation between charges and transfers (e.g., a carpool trip on a ride-sharing service)
    • At the time the charge is made, it is not known which connected account should receive the funds (e.g., a cleaning service may process the charge immediately but not know which connected account to pay—who is actually doing the work—until later)
    • A transfer may need to be made before the actual charge is made, or while the charge is pending (e.g., an ad network needs to purchase ad space before users pay for ads, or before their payments are complete).
    • A transfer may be for more than the associated charge (e.g., a platform may discount a charge for the customer but still pay the connected account the full amount)

    Because the transfer amount can be greater than the charge amount, or the transfer can be made before the charge is processed, you must monitor your platform balance carefully to make sure you can cover the transfer amount.

    Understanding pricing plans and the Stripe fee on Connect charges

    Stripe’s fee is part of the pricing plan for accounts, and is assessed on the platform in most cases, with the following exceptions:

    • For direct charges, the pricing plan of the connected account determines the fee, and the fee is assessed on the connected account.
    • For destination charges or for separate charges and transfers with on_behalf_of set, the country of the connected account also affects the pricing plan and fee.

    Pricing varies based on a range of factors. Contact us for additional details and clarification about Connect pricing.

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

    Refunds

    To give money back for a returned good or to compensate for unsatisfactory service, you can create refunds. Here’s how each charging approach handles refunds:

    Charging Approach Account Types Pending Refunds
    • Direct charges
    • Separate charges and transfers
    • Standard
    If the connected account’s balance is sufficiently negative at creation time, the refund object is set to a status of pending. When enough funds are available in the connected account’s balance, Stripe automatically processes any refunds with a pending status and updates the status to successful.
    • Express
    • Custom
    If the connected account’s balance and your platform's account balance are sufficiently negative at creation time, the refund object is set to a status of pending. When sufficient funds become available in your connected account’s or platform's balance, Stripe automatically processes the refunds with a pending status and updates their status to successful.
    • Destination charges
    • Standard
    • Express
    • Custom
    If your platform's account balance is sufficiently negative at creation time, the refund object is set to a status of pending. When sufficient funds become available in your platform's balance, Stripe automatically processes the refunds with a pending status and updates their status to successful.

    Further reading

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

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