#Dooing - Connect Express
wide fossil
hi there! no, Express isn't only for US customers - https://stripe.com/docs/connect/express-accounts#prerequisites-for-using-express
north zenith
ok so maybe that was only limited in the demo.
wide fossil
Platform accounts must be created in a supported country but the Platform can create Express accounts in any country supported by Stripe
north zenith
so now that I created a test account - it has an id -
and I need this Id to send payments to this account
how can I - programmatically retrieve it?
I asssume I would need to connect my regular subscription customer id with this connected account id somehow
and.. I assume, since the customers sign up by themselves.. I would somehow need to explain them how to copy over this id into my app???
wide fossil
right, you'll likely want to store the Express account IDs in a database you manage.
are you currently creating Express accounts using the API or using Express links created from the Dashboard?
north zenith
well I am just totally starting up
it woul dbe great to programatially do it FOR my customers
but it seems they need to go to the stripe website and sign up by themselves???
wide fossil
got it! i recommend starting here: https://stripe.com/docs/connect/express-accounts
if you already have some of your customers' information (e.g. email address, business URL), you can pre-populate this information and use it to create an Express accounts.
north zenith
in any case, it seems there is no way I could LINK their connect account to their stripe subscription customer ids programatically??
wide fossil
each user would still have to provide some additional information (see step 4 in those instructions)
north zenith
It seems, I would have to TELL them to log in, go to the right page, then copy their id and provide it for our systems??
wide fossil
no, not exactly. ideally, your application integrates with Stripe to both create Express accounts and provide your users with a way to access their Express Dashboard. your application should keep track of the mapping between a user's ID from your application and the ID of their Express account
hearty spade
There seems to be some confusion - "customers" who sign up for subscriptions are entirely separate, in Stripe, from "users" who have connected accounts - Stripe is for the most part a one-way payment processor - FROM customers TO Platform/Connected Accounts. In this case, a "customer" (who pays) on a Platform doesn't have an "account" as such, "just" a customer record.
north zenith
no, not exactly. ideally, your application integrates with Stripe to both create Express accounts and provide your users with a way to access their Express Dashboard
hearty spade
When you want to create an account for a "user" to accept payments, you supply however much information you have to create a Connected Account; this API call returns an ID for that account; you can also generate an API call for a "onboarding link" for the rest of the required information for a Connected Account to receive payments to their account, and Payouts from their account
north zenith
so you are recommending, @wide fossil , I should custom code the connected account sign up - and this way I could link both accounts on my end without the customer having to do that?
GiGStartr - I already have normal subscriptjon based customers and want to additionally allow them to receive comissions through an affiliate program
so somehow I need the two accounts linked.
When a customer signs up, there can be an affiliate id, so I will look up this id in my system
hearty spade
That linkage has to be mostly at your end. Stripe considers them (and treats them) as entirely separate.
north zenith
and when the new customer pays, I want to give a comission to the affiliated (connected express ) account
yes
the main question is - does this linkage HAVE to be done manually - or is there a simple way to do that programatically
In the test mode, I see I could - out of the box use the stripe express UI
formal shore
👋 I'm hopping in since @wide fossil has to head out
north zenith
but that would mean it is not connected to my own system, and I would make my customer understand to forward this id into our app
which is error prone
so maybe better to provide a nice UI "become an affiliate" which has a full set of forms that collect all necessary data and send this data to the stripe api.. but I assume this is already the "CUSTOM" flow?
and could be very time consuming with all kids of verification methods
hearty spade
When your platform creates a Connected Account, the API call returrns an object with the account Id, which you can store in your system - your platform creates the account, and then provides a link to complete any further onboarding (beyond the data you provided in the initial API call)
north zenith
like pone and documents
but form what I saw in th demo.. it does nt at all seem easy to provife all dat aneeded to create a connected account with the api
hearty spade
And yes, you can provide a quite large amount of the information - with custom, it can be your responsibility to provide all of it.
north zenith
like telefon identififcation
stil cant follow. How could I use the stripe express UI - and still receive the created ID in my own backedn?
hearty spade
The data requirements Stripe requests are almost entirely driven by regulation for KYC and AML.
formal shore
Let's back up for a minute @north zenith
hearty spade
Because the Express UI is accessed from an Onboarding Link you give to the user after you create the base account.
north zenith
ah wait ok -
formal shore
What exactly are you trying to do? If what you want is your own UI for collecting account information, and you want your cilents/accounts to never interact directly with Stripe, then really what you want to be using is custom accounts
north zenith
so you are saying -
I create, programatically, a connected express account
this will return me a link
I will forward the link to my customer
to fill out all required data with stripe
then it is in stripe
and I can connct the two accounts with the two ids
formal shore
Creating the connected express account won't return you a link - you'd create that separately using the Account Links API
hearty spade
I think there's one more step (separate API call to get the Onboarding Link), but essentially yes
And yes, you can associate the "customer" Id and the "Connected Account" ID in your database
While I don't have your business model, in my Application I do use my forms to collect almost all the required data before creating the account (in fact, require it before creating the account)
Only parts I don't collect are sensitive information, like bank account #'s, ID #'s, things like that
north zenith
ok, so to answer your question, I want to implement a very simple affiliate system for my customers. in the UI, they would click "yes I want to take part in the affiliate system"
Then following your instructions I would create an expresss acount, and with the account links api create a link for them and send it back to them. They fill out all data required. Now they will need an ID from me ( guess just a UIID unrelated to stripe)
and whenever a customer signs up with this id
I will link this NEW customer asn affiliate to the original source account
now, whenever the NEW customer makes a subscription payment (montly) , e.h on the invoice hook -
I would send 30% of that amount to the source connected express acount via stripe also
then I finally just need to find out how I can create some kind of comission invoice for the one customer - and some other kind of invoive for my own business in the name of the one receing my comission - as this would reduce my tax payments, as my total earnings are reduced by the commision paid
hearty spade
So, essentially, your platform keeps 70%, whoever the affiliate Connected Account is gets 30%?
north zenith
yeah
for up to 2 years
thats potentially a LOT of money and should motivate many to make the deal with me 🙂
hearty spade
Another way to think of it, then, (More Stripe-like) is the "payment" goes to the Connected Account, and you charge a 70% "application fee"
You could also do separate Charge & Transfer, but I'm betting the above "application fee" might work better for your accounting
I'm assuming there will only ever be one affiliate associated with a subscription
north zenith
one affiliate can have 0 to n subscriptions
hearty spade
well, yes, but does a subscription have more than one affiliate?
north zenith
if I follow what you mean - no
affiliate is like the referal
so if I recommend oyu - hey thre is stripe use m y link -
then I have refered you to stripe
and I get. my 30% lifetime comission
Another way to think of it, then, (More Stripe-like) is the "payment" goes to the Connected Account, and you charge a 70% "application fee"
hearty spade
So then the payment(s) for the subscription are essentially paid to the referring Connected Account, and you charge a 70% affiliate fee.
hearty spade
nah. Those payments go directly to the platform.
north zenith
it goes like - they pay me 100% directly, I write an invoice
hearty spade
You certainly can keep them separate (and "just transfer" to the referrer Connected Account).
north zenith
now for the affiliate case as you describe it - it would mean -
I create a DIFFERENT invoice of just 70%
and I send this invoice not to the actual subscription
but to the other affiliated one
and then I would require the affiliate to create a 100% invoice to their affiliate, I guess
but for the affiliate, I would still be THEIR partner
and they would expect me to give them an invoice and all
hearty spade
No, actually, you create a 100% invoice for the subscription. It is "technically" paid to the referrer Connected Account, then the 70% affiliate fee lands in your account.
But you can do it either way so that the Subscriber just sees one invoice.
north zenith
so are you saying, with the 70% it woud be cheaper for me, or simpler to implement?
that would be great, but I am unsure from a legal point of view
I would then create a 100% credit note for my partner plus a 70% invoice, or what?
hearty spade
Simpler to implement. The Stripe Fees (on payment) will be paid either way. And there will be the "Active Connected Account" fee of $2 each "active" month (month where there is a payout), and a Payout Fee 9( US $0.25 + 0.25%)
north zenith
woah my head is spinning 😉
hearty spade
In what I would envision as the "simplest" appoach, you simply create an invoice for the subscription. The Subscriber only sees that. The payment would be setup as paying to the connected account, with a 70% application fee, which would end up in the Platform account.
All happens without you doing anything other than setting up the payment with the right parameters
north zenith
2$ ?!
that is potentially a lot actually
if I have a lot of one time only connected accounts
and a price / month eg of only 10 USD
that would result in over 20% to stripe
hearty spade
Well, that's up to you. If your making it this complicated for a $10/month subscription, that's the cost. Complexity is never cheap.
north zenith
there is a paid service that charges39 USD / month for this service
Up to $1000 in Total Referred Revenue
Unlimited Affiliates
hearty spade
When you said "a lot of money" I assumed at least an order of magnitude higher rates. Go with the model that works for you.
hearty spade
You do whatever works for your model. If you expect one individual to refer 1000 others, there ya go.
north zenith
so it seems stripe is good if I have the majority as big good refers sending me more then just a single subscriber / month
but a lot of small fish can kill me with stripe, it seems, is my point
hearty spade
Fair bit involved in the modeling. But that level of analysis is what makes a strong business.
north zenith
so for the refers, it actually might make sense to CHOOSE if I actually WANT to make business with them
hearty spade
Also think of it from Stripe's perspective - 3% on a lot of small transactions leaves a lot of costs to them
north zenith
as it seems it will create costs on my end, first of all
hearty spade
Takes money to make money. (Note I have the privilege of being Snarky, as I'm not with Stripe)
hearty spade
I'm a start-up as well. I have taken advantage of Stripe's entirely-free testing modes to build quite a complex integration. They've provided a lot of value for me, so only fair they profit from it.
north zenith
yes
of course
but -
It should not strangle my model
otherwise I wont just do it 😉
so it seems -
hearty spade
Well, I could make a great business selling Burgers if only McDonalds would give them to me for $0.02 each. Not a great model in the real world.
north zenith
a) I go with https://linkmink.com/pricing
I just dont like to pay 40 USD / month as a start, and I dont know whenever I will ever get the first comission based payment
there might be passing 1-2 years till that happens
who knows
so that would be like 400-800 USD for NOTHING
and that to me sounds expensive
or b)
I implement the stripe way myself.. and it seems not to complx actually -
but then I better CHOSE whom I want to really partner with
because too many little fish could kill the deal
hearty spade
Might be. In California, I have to pay at least $800/year in state taxes if I incorporate. Expensive if it takes a couple years to generate revenue. Is it worth it? That's the risk.
north zenith
and I should reconsider lowering my montly fees too much
well dont come with tax. I am from Germany, I pay like 50% in tax
hearty spade
General Business advice - NEVER base a business model on being the cheapest. Create value that's worth paying for.
north zenith
(thats not actually entirely true. but it is a lot still)
heard that bfore... but need to start SOMEWHERE
hearty spade
Oh, the $800 isn't the tax rate - it's the minimum regardless of revenue.
hearty spade
But yep, makes business challenging. That's the fun part.
north zenith
ok 23:34 here, got to go. Awesome help from you, thanks man
hearty spade
Good luck with it!
north zenith
not sure how we could stay conncedted
MarcusBiel on twitter, if you like
hmm.. just another one.. what would you opt for for a starting business - paying the 39 USD monthly for unlimited affiliates, or the 2 USD for every connected affiliate?
It seems I would have to actually "manage" my affiliates with stripe - and kick out partners that are not really generating a lot of value. Because every new sign up will also create costs on my end...
hearty spade
Well, that there's one of Stripe's "good things" - it's $2 (or whatever the EUR charge is) per ACTIVE account - which is defined as an account that receives a payout - so if they don't earn anything to payout, there's no Connected Account fee. Similarly, the Payout Fee $0.25 + 0.25% (or whatever the EUR rate is) only occurs if there's actually something to payout. If there's no activity, there's no fee.
Probably easiest to connect here on Discord, btw.
hearty spade
...active in that month
north zenith
well i am not sure about my pricing model fully - but my starting price would be 10-30 USD / month
and if they are active -
it could mean ONE payment of 10-30 usd
hearty spade
ah. gimme mo to open it (I guard against trolls pretty strongly)
north zenith
and then, for each partner, I would have a heavty percentage to pay to stripe
2/20 plus fees
would be over 10%
or 2/10 even worse
and 2/30 not much better
hearty spade
An issue of scale, yep. It's expensive to be inexpensive.
north zenith
I have accounts on a level also for 4000 / month
but god knows whehn that will be used
and my costs increase of course with the amounts paid
hearty spade
Only the other hand, you're clearing $7/per $10 subscription, so it would still be a better than 50% gross margin. Far better than any retailer
openned the account for the next 5 minutes, then it closes again.
Not to mention almost entirely passive.
north zenith
gosh my laptop crashed out pof battery
took a whjle to come back
so now I did the maths -
I assume a small account / motnth could create DIRECT costs of 3-5 USD
(without hosting or my running costs)
so if I get 7 usd instead of 10
and then pay over 2 usd to stripe
hearty spade
(Oh, also note: the $2/account is per account, not per subcription payment, and the $0.25 + 0.25% is per payout which is generally only daily (or what ever you want - could be monthly)
north zenith
I would make a minus from such customer I guess
yeah but for each partner account, i assume
not for my master account
so for each partner
and that would mean, for every partner that only send me 1 small subscription / month
that is 0 to 0 or even a negative business
on the ohter hand, if I do my next release and add affiliate marketing to it.. it will take a while to take effect. eg. a year I could assume. So if I pay 40 usd each month, that is 480 USD to that linkmink partner before I get even the FIRST referal money
but in the long run, they seem actually cheaper
seems like 0,5 percent of a charge
in the long run
or, I would perfectly choose my partners, and kick out bad ones when I review their account to see they are just making 1 deal / month
(eg by just fucking me and using their own link)
hearty spade
well - assume $10 subscription. about $0.25 + 3% to Stripe on that, so $0.55 to Stripe. 30% to the Connected Account, so $3.00. $2/month + $0.25 + 0.25% for the once-a-month payout, so $2.275 for that. So all charge are ($0.55 + $3.00 + $2.275)= $3.825. So you net $6.175 - 61% gross margin, and all the payment handing, account verification, etc handled by Stripe
north zenith
still, I guess to start, maybe stripe is stil better... I reallty dont like to pay 40 each month without knowing when ever I will actuallty need it
wait
you missed the extra 3 usd
so $3.00 + 2 ++
hearty spade
nope, that's the affiliate paid to the connected account.
north zenith
more like 5.8,25 I guess
hearty spade
er... wait extra $2
north zenith
and now substract from that the 3-5 USD their DIRECT usage will cost me (assuming they dont iddle arround)
hearty spade
$5.825. Still nets you $4.175, and the "marketing" is done by the people wanting to get affiliate payments.
You're gonna pay for marketing one way or another.
north zenith
and we are at cost of 8.8 to 10.8 in the WORST realistic scenario
for a 10 usd payment
so maybe I should not go that low
I could stay with 29 usd / month for the same service. There is just one competitor, and they are actually longer in the market then me, and they go at 10 usd / month
I find their UI a bit confusing, but I think they actually have more features then we do, and they most probably have a big customer base
hearty spade
No, I disagree - the costs are $0.55 Stripe fee; $3.00 affiliate; $2.275 Connected Account & Payout- net $5.875
north zenith
or I just take that 10.8 to 10 risk... assuming this should never actuallty happen, or rarely, and if, I would kick such partner
ok
woaaah way to late now
00:20
with 2 baby boys
I can shoot mhyself now 🙂
ok I am out, sorry. But awesome chat
need to digest that
hearty spade
Head off. Business will still be there tomorrow
north zenith
thanks