eCommerce

Stripe Connect for marketplaces: split payments and payouts

10 min readBy Davinder Kumar Meen

A hand stacking coins into several piles on a wooden market counter beside a small brass scale

Stripe Connect is Stripe's product for businesses that take a payment from a customer and pass part of it to someone else: a seller, a host, a tutor, a creator. You create a connected account for each seller, choose how each payment flows (straight to the seller, or through your platform first), and Stripe handles identity checks and bank payouts. The decision that matters most is not technical: it is who is the business of record on each payment, because that party's balance pays for refunds and chargebacks.

Key takeaways

  • Stripe now asks new platforms to configure connected accounts by responsibilities (who pays Stripe's fees, who covers losses, which dashboard sellers get) through its Accounts v2 API. The old Standard, Express and Custom types are documented as legacy, for platforms that already use them.
  • There are three charge types. Direct charges make the seller the business of record; destination charges and separate charges and transfers make your platform the business of record unless you set on_behalf_of.
  • With destination charges or separate charges and transfers, refunds and disputes come out of the platform's balance first; you recover them from the seller by reversing the transfer.
  • As of October 2026, if Stripe bills your sellers directly there are no extra Connect fees. If your platform sets the pricing (Stripe's recommendation for marketplaces), Stripe's US support page lists $2 per monthly active account and 0.25% + 25¢ per payout, on top of normal processing fees.

What is Stripe Connect, and when does a business need it?

You need it when money from one customer has to end up with someone other than you. Stripe describes Connect as its "solution for multi-party businesses, such as marketplace or software platforms, to route payments between sellers, customers, and other recipients". Typical cases are a course marketplace paying instructors, a services site paying contractors, a crowdfunding site paying campaign owners, or a cart with goods from several shops.

You do not need it if you sell your own products, or if each of your customers simply connects their own Stripe account and keeps the money. On the Scuela e-learning marketplace, for example, we built an Enterprise plan where academy owners connect their own Stripe credentials and manage their own billing, while the main marketplace takes course payments, subscriptions and refunds through Stripe and tracks multi-level affiliate commissions and payment requests in the application. The choice between those designs belongs at the start of a project, because it fixes who is responsible for the money.

Which account setup should a marketplace use?

As of October 2026 Stripe's documentation tells new platforms to use the Accounts v2 API, where you set three things when you add a seller:

  • Who collects payment fees (fees_collector): your platform, which then charges sellers its own fee, or Stripe, directly from the seller. Stripe applies this only to direct charges; for destination and separate charges it always collects fees from your platform.
  • Who covers losses (losses_collector): your platform, which then "manages risk for the connected account", or Stripe. If your platform covers losses, it must also collect fees.
  • Dashboard access: full (the seller's own full Stripe Dashboard), express (a lighter, platform-branded dashboard) or none (your platform provides everything).

These map onto the account types many guides still describe:

Legacy type Roughly equals Onboarding and ID checks Dispute and fraud liability Seller dashboard
Standard Stripe collects fees and covers losses; full dashboard Stripe Seller for direct charges; platform for destination charges Full Stripe Dashboard
Express Platform collects fees and covers losses; Express dashboard Stripe Platform Express Dashboard
Custom Platform collects fees and covers losses; no dashboard Platform or Stripe Platform None

Stripe gives Airbnb and Lyft as examples of platforms using Express accounts, and Shopify as one using Standard. For most marketplaces, the Express-style setup (Stripe-hosted onboarding, platform-controlled payouts, a light seller dashboard) is the least work for the most control. The fully white-label setup only makes sense if you will build onboarding screens and seller support yourself.

Who is the merchant of record in a Stripe Connect marketplace?

It depends on the charge type, and you choose it per payment. Stripe's own phrase is "business of record": the party whose name is on the customer's card statement and whose balance pays refunds and chargebacks.

Charge type Business of record Who pays Stripe's fees Refunds and disputes debited from Best for
Direct charges The seller Configurable: seller or platform Seller's balance Software platforms where customers buy from the seller, often unaware of the platform
Destination charges The platform, unless on_behalf_of is set Platform Platform's balance; recover by reversing the transfer One seller per order: rentals, rides, contractor marketplaces
Separate charges and transfers The platform, unless on_behalf_of is set Platform Platform's balance; recover by reversing transfers One cart split across several sellers, or paying a seller later or before the job is assigned

Setting on_behalf_of to the seller's account makes the seller the business of record on an indirect charge: Stripe then settles in the seller's country, applies that country's fees and shows the seller's statement descriptor.

Stripe says separate charges and transfers "require a more complex Connect integration" and should be used only when you need them, such as splitting one payment between a store and a courier, or charging before you know which provider will do the job. Your platform must also keep enough balance to cover transfers made before the money arrives.

Being the business of record has tax, consumer-law and licensing implications that vary by country. This article is general information, not legal or tax advice.

How does seller onboarding and KYC work?

Each seller has to pass Stripe's identity and business checks (Know Your Customer, KYC) before they can receive money. In most setups Stripe collects and verifies this through hosted or embedded onboarding, and asks sellers for more information when rules change. Your platform takes on that job only if it both covers losses and gives sellers no Stripe dashboard. Stripe's documentation warns to choose that "only if you're prepared to manage the operational complexity". If you collect identity documents yourself you also hold sensitive personal data, which adds security and regulatory work.

Two practical points: a connected account's country cannot be changed after it is created, and the account type cannot be changed later either. Get these right in the first build.

How do payouts and split payments work?

The customer's payment lands in a Stripe balance (the seller's, for direct charges; the platform's, for the other two), your platform's fee is kept, and the seller's share is paid to their bank account or debit card. With Express-style or white-label setups the platform controls payout timing, so you can hold funds until an order ships or a booking ends. Stripe also supports Instant Payouts and paying sellers in other countries through cross-border payouts, each with its own fee.

The application has to keep its own record in step with Stripe. On the Beliri designer marketplace, a marketplace with offers, a wallet and disputes, we built native Stripe and PayPal checkout in the iOS app, with the Node.js API confirming each payment and recording the order before anything else happens. That rule (the server, not the app, decides a payment succeeded) is what keeps seller balances and payouts trustworthy on any marketplace.

What does Stripe Connect cost, as of October 2026?

Stripe offers two pricing models on its Connect pricing page:

  • Stripe handles pricing for your users: Stripe bills sellers for payment fees directly, and your platform pays "no additional account, payout volume, tax reporting, or per-payout fees".
  • You handle pricing for your users: "recommended for marketplaces". Your platform pays Stripe's processing fees and charges sellers its own fee. Stripe's US support page lists "$2 per monthly active account, and 0.25% + 25¢" per payout. The Canadian pricing page lists CA$2 per monthly active account, 0.25% + CA$0.25 per payout, a separate line for funds routing and platform management (check on the page whether it adds to the per-payout fee), 1% of payout volume for Instant Payouts, and cross-border payouts from 0.25% of payout volume. An account counts as active in any month it receives a payout.

Normal payment processing is on top. As of October 2026, Stripe's Canadian page lists 2.9% + CA$0.30 per successful domestic card payment, a CA$15.00 fee for each dispute received, and a further CA$15.00 for each dispute you respond to manually, refunded if you win. Prices differ by country, so check the page for yours; custom pricing is available for large volumes.

How should a marketplace handle refunds and disputes?

Plan for them before launch, because with destination charges and separate charges and transfers the platform pays first. Stripe debits the refund or the disputed amount and fee from the platform's balance; you then reverse the transfer to recover it from the seller. With destination charges, if the seller's balance is short, a refund that also reverses the transfer returns an error. A negative seller balance is debited from the seller's bank only if debit_negative_balances is enabled.

A sound policy covers:

  • Holding payouts for a period that matches your refund window, so funds are still there to reverse.
  • Who decides a refund (customer service, the seller, or both) and whether sellers can refund from their dashboard.
  • How dispute evidence (delivery proof, messages, terms accepted) is collected from sellers quickly.
  • What happens to your platform fee when an order is refunded.

On the crowdfunding platform we built and maintained, funders paid by Stripe, Bitcoin or subscription, and campaign creators had their own dashboards with funding metrics. Platforms like that are where this planning pays off: many small payments, many recipients, and customers who may ask for money back long after they paid.

If you are designing a marketplace or adding seller payouts to an existing site, our Stripe development team can map the charge type, account setup and refund rules to your business model before any code is written.

FAQ

What is the difference between Stripe and Stripe Connect?

Stripe Payments lets one business accept payments for itself. Connect adds connected accounts so a platform can route money to other businesses or individuals, verify them and pay them out.

Are Standard, Express and Custom accounts still available?

They remain documented for platforms that already use them. For new platforms Stripe recommends configuring responsibilities and dashboard access through the Accounts v2 API, or controller properties in the older API, instead of picking a type.

Who pays the chargeback in a Stripe Connect marketplace?

With direct charges, the seller's balance. With destination charges or separate charges and transfers, the platform's balance is debited first, and the platform can recover the money by reversing the transfer to the seller.

How much does Stripe Connect cost?

As of October 2026 there are no extra Connect fees if Stripe bills your sellers directly. If your platform sets pricing, Stripe lists $2 per monthly active account and 0.25% + 25¢ per payout in the US, plus processing fees. Check Stripe's Connect pricing page for your country.

Can one payment be split between several sellers?

Yes, with separate charges and transfers: your platform takes the payment and then transfers each seller's share. Stripe recommends it only when you need it, because it is the most complex option.

Do sellers need their own Stripe login?

Only if you give them one. Dashboard access can be the full Stripe Dashboard, the lighter Express Dashboard, or none, in which case your platform provides all the screens, optionally with Stripe's embedded components.

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