#tikayoh_api
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modern tendon
hello! It can work if you use direct charges with Standard accounts instead of your current flow which is essentially destination charges (where Platform A transfers to Connected Account A and gets the difference as a service charge to Customer) : https://docs.stripe.com/connect/direct-charges
fast dove
Doesn't that flow charge the service charge to the Connected Account as a result?
Sorry, I ran out of space, but the business model requires that the Customer A gets the service charge and it goes to Platform A, and that the Connected Account A gets the entirety of what was transferred (minus unavoidable things like Stripe fees/currency exchange)
I think that's why we went with the destination charge, because we basically front-loaded the payment intent with the desired amount + fees to ensure that the connected account got the agreed upon transfer
modern tendon
by service charge, do you mean the Stripe fee?
fast dove
no it is a separate fee that we charge on the customer.
modern tendon
how much you charge the customer is up to you. That's determined by the amount on a PaymentIntent. How much the connected account and platform gets is determined by other parameters. In the case of a direct charge, you would use the application_fee_amount
the diagram here might make it easier to understand https://docs.stripe.com/connect/direct-charges?platform=web&ui=stripe-hosted#flow-of-funds-with-fees
fast dove
haha yeah i'm looking at it right now actually!
So the reason I'm struggling with this is that with this exampel in particular, The Connected account is taking the 123 application_fee_amount
The stripe fee of 0.59 makes sense to me, and I'm assuming there's no way around that
modern tendon
i'm not too sure i understand? The application fee is transferred to the platform in the diagram
fast dove
txn_001 in the Connected Account section has a fee of 182 which is the 123 apploication fee + the 59 stripe fee
modern tendon
i think you're getting a bit confused here. The balance transaction i.e. txn_001 is the funds for the payment. Let's put that aside first.
What's happening here is that the customer makes payment on the connected account, subsequently, the platform takes a "fee" which is the application_fee_amount
The connected account is responsible for the Stripe fee.
fast dove
Hmmm okay, so based on this diagram, you are saying that the Connected Account would be getting 941? (1000 - Stripe fee)
modern tendon
818, there's a super tiny line of text at the bottom of the diagram that explains the calculation
fast dove
Ok, so I don't want the connected account to pay the application_fee_amount, I want that amount to come from the customer. Would that mean I would just instead adjust amount in the PaymentIntent?
Thanks for your patience, it's been difficult to wrap my head around this stuff
modern tendon
the application fee amount is what you as the platform will take as the service fee, you just need to include it into the amount you charge the customer
So for example, your service fee is $1.23, the product is $10, so you charge the customer $11.23. Just note that the Stripe fee is based off a flat fee and a percentage of the total amount charged to the customer.
fast dove
Ok great, that makes sense to me
And the Connected Account is just always responsible for the Stripe Fee?
modern tendon
in the case of a Standard account + direct charge, yes, the connected account is responsible for the Stripe fee.
I do also want to clarify, who ( connected account / platform) should show on the customer's credit card statement? For direct charges, the connected account will show on the customer's credit card statement, is that what you expect and want?
fast dove
I am not 100%, but I currently believe that would be appropriate.
Is that something that can be easily changed?
modern tendon
unfortunately not really. It's somewhat related to how you build your integration with Connect.
For example, for direct charges, we always recommend using Standard accounts. For destination charges, we usually recommend Express / Custom accounts. I won't go into the details, but there're reasons for using these combinations and you can run into some painful issues where there's either no solution, or you have to do some weird workarounds if you don't follow these recommendations
fast dove
Got it.
Okay last question before i wrap up the day.
My understanding is that for cross-border transfers from a US platform account to a non-US connected account, there is no other option than to have the connected account have the recipient service agreement. Is that correct?
Oh, i guess having another platform account tied to the same region as the non-US connected account, but I'm assuming that's not an avenue we can take