#undefined-connect-marketplace
stray river
Currently we are using Direct charges
misty quiver
I guess that explains the negative balance issue
It's not really recommended to do direct charges with non-standard accounts: https://stripe.com/docs/connect/charges#direct
What you described will work in principle, sure. But you're likely to run into issues with this setup. As the platform you're ultimately responsible for the negative balances of your connected accounts
stray river
Thanks for the info. It's important to note that we (the platform) are not the settlement merchant or the merchant of record. So I don't think destination charges would work for us then. The only reason for choosing the custom accounts is that we can hold the funds in case the customer wants to refund, but it comes with the downside of the extra responsibility for negative balances. But we might be able to support it with these security deposits, but it doesn't feel like an ideal solution. How do other (non MOR) marketplaces use Stripe Connect? Any best practices?
misty quiver
It's important to note that we (the platform) are not the settlement merchant or the merchant of record
You're not with direct charges, no. But that's generally how marketplaces work
So I don't think destination charges would work for us then
You can use theon_behalf_ofparameter to set the connected account as the merchant of record:
With Destination and Separate Charges and Transfers, you can use the on_behalf_of parameter. The on_behalf_of parameter is the ID of the connected account to use as the business of record for the payment. When it is set, Stripe automatically:Settles charges in the country of the specified account, thereby minimising declines and avoiding currency conversions.
Uses the fee structure for the connected account’s country.
If the account is in a different country than the platform, the connected account’s address and phone number shows up on the customer’s credit card statement (as opposed to the platform’s).
The only reason for choosing the custom accounts is that we can hold the funds in case the customer wants to refund
Which funds? Who is 'the customer'?
How do other (non MOR) marketplaces use Stripe Connect? Any best practices?
With destination charges andon_behalf_of
stray river
"You can use the on_behalf_of parameter to set the connected account as the merchant of record."
Ah interesting, thanks.
"Which funds? Who is 'the customer'?"
I mean the customer that makes a purchase with the connect account.
Customer ---> Stripe Connect Account.
misty quiver
How does that work? Not sure I understand
stray river
I'm basically referring to: https://stripe.com/docs/connect/account-balances#holding-funds
The customer buys a product from one of our sellers. The seller is the Stripe Connect Account. When a product has been delivered and everything is OK then we can Payout the funds that are part of the stripe connect balance. Should something go wrong then we or the Store/Stripe Connect Account holder should be able to quickly issue a refund because there are funds available in the Stripe Connect Account.
misty quiver
That doesn't really apply with direct charges though – there's no balance on your account as a part of the payment
So I'm not sure how you can hold funds as the platform
stray river
"Keep funds in an Express or Custom account’s balance before proceeding to pay out the funds to a bank account or debit card"
I mean on the store / Stripe account's balance
We hold funds currently by controlling when the payout happens
misty quiver
Ah, gotcha
stray river
But thanks for the suggestion regarding the destination charges. I guess it's a better way to prevent negative balances when dealing with refunds for custom accounts. This Discord is great, will come back more often. 😀
misty quiver
Sure, np!