#sunnylbk
urban yacht
There was a transaction for 1 pound. When it's tranferred to conncted account, it's 0.98
urban yacht
What's the recommended approach here?
glad shadow
To retain the fee amount and transfer the amount - the fees to the connected accout
urban yacht
using on_balf_of ?
glad shadow
and there is no mechanism to avoid the conversion issue
Because the FX occurs after debiting funds from your account, you cannot specify "I want to transfer 1 GBP , take the equivalent USD"
The USD amount isn't known at that point
urban yacht
Got it. But sorry, what's the recommended approach to avoid double FX fee?
glad shadow
What I said earlier. Don't transfer the whole amount, retain your fees.
That way the funds don't need to go GBP -> USD -> GBP
urban yacht
We are not charging any application fee, we will only levy Stripe's transaction fee separately.
Sorry, I am still trying to understand how retaining fee will help us avoid double FX charges. Can you please elaborate?
glad shadow
How do you get the fee from the Connected Account?
urban yacht
We will collect that fee as part of the subscription fee, which they will pay using a card
I am reading about on_behalf_of parameter, which states, "Settles charges in the country of the specified account, thereby minimizing declines and avoiding currency conversions."
glad shadow
What do you mean here? Do you meen the application_fee_percent on the Subscription?
https://stripe.com/docs/api/subscriptions/create#create_subscription-application_fee_percent
That approach will make the Connected Account the merchant of record
urban yacht
No, that's not the one. We raise an invoice separately to collect our fee
We do this separately because, we deposits 100% of the amount instead of net-of-fees. This guarantees that our client invoices can be automatically reconciled correctly
Then we raise another invoice for subscription fee that includes Stripe fee
glad shadow
Okay so in that case using on_behalf_of will make sure the initial payment settles in GBP and then your invoice will only result in 1 FX for GBP -> USD
urban yacht
Cool, thanks
sharp hemlockBOT
urban yacht
I have a followup to the above. When enabling on_hehalf_of in above scenario, I am seeing the following error:
bitter mango
👋 hopping in here since snufkin has to head out soon
urban yacht
When I try to enable the card_payments for the account I am seeing this
But, cross border payouts can only be enabled for receipient TOS
bitter mango
Yeah you can't use on_behalf_of for recipient TOS connected accounts. Recipient TOS connected accounts are meant to be used with cross border transfers (where the merchant of record is your platform and funds are transferred to your connected accounts)
Destination charges with on_behalf_of are different and use the connected account as the merchant of record, so it's not considered to be a cross border payout
urban yacht
Ah, I see
So, I should create connected accounts with full service agreement, correct?
bitter mango
correct - if you plan on using destination charges + on_behalf_of then yes, you'd want the full agreement