Fee behavior on connected accounts

Understand how to configure the billing behavior for new connected accounts when using direct charges.

Identify fee collection responsibility

You can identify whether Stripe or your platform is responsible for fee collection on a connected account by examining its properties. The specific property you need to check depends on the version of the Accounts API:

• Accounts v2 : defaults.responsibilities.fees_collector
• To retrieve the defaults hash, specify defaults in the include parameter.
• Accounts v1: controller.fees.payer

The fee collection responsibility determines the set of billing behaviors you can expect for direct charges and product usages that occur on this connected account.

Note

Any activity occurring at the platform account level is billed to your platform regardless of the entity responsible for fee collection. For example, Stripe charges the platform directly for destination charges (with or without on_behalf_of) and card account updates for cards stored on your platform account.

Application fee behavior

Fee collection and reporting for direct charges differs based on your pricing model and how you configure fee responsibility. If you use application fees to monetize payment processing for your connected accounts:

• If you set the fee collector to stripe in Accounts v2 or the fee payer to account in Accounts v1, Stripe deducts its processing fee and your application fee from the payment, then pays you your share. Set the application fee amount to include only your fee.
• If you set the fee collector to application , you collect the payment and fees, then pay Stripe its processing fee. Set the application fee amount to include both your fee and the Stripe processing fee.

For example, if the Stripe processing fee is 1.00 and your fee is an additional 1.50, for a total cost to the connected account of 2.50:

• If Stripe collects the fees, set the application fee to 1.50. Stripe deducts its processing fee separately.
• If your platform collects the fees, set the application fee to 2.50 so it covers both fees.

Changing your pricing model

If you change your pricing model or fee collector configuration, you might charge your connected accounts too much or too little. Make sure your connected account configuration applies processing costs as you intend by reviewing your application fees and pricing model before you set or make changes to your responsibilities.

Selecting billing behavior

You can specify the fee payer only when you create an account.

The following sections describe the behavior of each value.

stripe (Accounts v2) or account (Accounts v1)

Stripe collects fees directly from your connected account. We don’t charge any Connect fees to it or to your platform.

Any application fees that your platform bills to the connected account are in addition to Stripe fees.

You can set the fee payer when you create connected accounts. Accounts created with type=standard also have this value.

application

The platform pays payment fees for direct charges and fees for Stripe products like Radar, Card Account Updater, and Instant Payouts. For complete details, see the table below.

The platform also pays Connect fees for these accounts.

We recommend that you monetize payments and Stripe products where the platform is billed by collecting fees from your connected accounts.

You can set the payer type to application when you create connected accounts.

Platforms that pay Stripe payment fees for direct charges can access dedicated reports.

See Platform Reporting for direct charge payment fees paid by platform.

application_custom or application_express

Don't use direct charges

We don’t recommend using direct charges with this legacy setting. Use destination charges instead.

application_custom and application_express are assigned to accounts created with the legacy account types type=custom and type=express, respectively. You can’t set the payer type to either value when you create connected accounts.

Billing behavior for direct charges and other Stripe products matches the behavior of Custom and Express accounts. For complete details, see Fee payer behaviors.

We recommend that you monetize payments and Stripe products where the platform is billed by collecting fees from your connected accounts.

Dispute fees

For connected accounts that use direct charges, Stripe always attempts to debit disputed amounts from the connected account’s balance. However, if Stripe can’t debit the amount, ultimate responsibility depends on whether Stripe or the platform is responsible for negative balances.

For dispute-related fees, responsibility depends on your connected account options. The following table shows whether Stripe debits dispute-related fees from the platform or the connected account:

List of fee behaviors for payer values

For Accounts v2, the the related setting column applies when defaults.responsibilities.fees_collector is stripe.