#naveed-web3auth_docs
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Hi there, what makes your think your cusotmer is paying higher than what you charge. Have you tested out direct charges already?
No I mean that if I set application fee to be say 2% on the NFT purchsae
say its 100 USD, so we would get 2 USD
but then they would get charged additional fees by Stripe
so what can I do to prevent that and make sure my customer is paying 2USD in application fees and not more or less than that
No, Stripe doesn't charge your customer for processing fee, it's the connected account that's responsible for the processing fee.
sorry i mean the conneccted account
yeah so if the connected account has a customer that pays 100USD
we get 2 USD from that transaction
as for the connected account they would instead of getting 98 USD they would get less than that
since they would pay some fees to Stripe
Got it.
Maybe you want to consider using destination charges so that you have a better control on the funds flow. Let me explain a bit more
- Create a destination charge with a estimated application_fee that's sufficient enough to cover the processing fee + the $2
- Once the payment succeeds, you can check the payment_intent->latest_charge->balance_transaction->fee_details to determine the processing fee
- Create a application fee refund to return approriate amount to the connected account.
That seems a little unintuitive considering the refund aspect
But I think that with destination charges with my platform set as the fee payer, then we can charge the customer at the rate we mentioned (and not a cent more), and from our end we are handling the variable Stripe fees that depend on many different factors
so with 100USD, the connected account pays 2USD, and on our end we end up getting less than 2USD because out of that we also pay Stripe
Im wondering about what currency conversion charges would be involved in this tbh. E.g we are Singapore based stripe acount, our customer (the connected Stripe account) is UK based
Yup, so you should just chare a higher application_fee in the begining, and later return the right amount to the connected account once the processing fee is known.
If i set it as 4%, im sure refund wont be required since I dont think stripe would charge fees higher than that (to my knowledge)
But I was really hoping it'd be possible to do this flow without having to resort to destination charges since the integration is a bit more complicated and involves a bunch of liabilities.
Let's take a step back. Just want to understnad what problem you are trying to solve with direct charges.
The connected accounts are responsibe for the processing fee, and you can get exactly $2. If you want your connected account to have $98, then that means you wan to bear the processing fee? Is my understanding correct?
Say you are the connected account (the NFT marketplace), and you want to use us (the platform) to power the purchasing functionality of the marketplace.
We quote you 2% per transaction as the fees you will pay us. So if the NFT is 100USD you will pay us 2 USD.
But instead of having 98USD ending up in the connected accounts balance.
It would be less than that.
Because with direct charges the connected account also has to incur Stripe fees.
so in reality you are paying >2% in fees which is not what we quoted you
So the resulting balance in your acc is < 98 USD
Thanks for the context/
I believe destination charge is more suitable for your use case, so that you can determine the exact amount that your connected account receives
Do you know what kinds of currency conversions are going to take place
given our acc is Singapore based, connected account is UK based accepting payments in GBP
https://docs.stripe.com/connect/destination-charges
"Destination charges are only supported if both your platform and the connected account are in the same country. For cross-border support, you must specify the settlement merchant to the connected account using the on_behalf_of parameter on the Payment Intent or other valid cross-border transfers scenarios."
Seems like there are some caveats to destination charges
yes, see https://docs.stripe.com/connect/currencies#example-scenarios for lots of detail on how and when the conversion happens
Alright ill have a read through
it seems that my options are either to
- use destination charges
or - update pricing model to quote OUR fees and point them to Stripe pricing page for payments for additional Stripe fees they would have to incur
for option 2 if you're using Direct Charges on Standard accounts then yes it's normal that the connected account is their own merchant paying their own fees with their own relationship with us, your platform is just taking a 'cut' on top
ahh i see the mental model now.
makes sense