Watching the pull-requests on the main branch indicates that ST is heading towards supporting stripe payment processing. There has not been any chatter about the timing for this, but I suspect as per other major code features it will be some time. the main reason is ensuring it is stable and the documentation is very good. I am interested to know however what the supported models for Stripe Connect in ST will be STANDARD, EXPRESS or CUSTOM (https://stripe.com/docs/connect/accounts) and if the configuration will allow the marketplace owner to specify which model they want for their marketplace.
indeed this is something we are considering and are working on. However it’s still a work in progress and there is no timeline for this yet (it could also be that we end up killing this project for whatever reason).
Anyway for the time being we are looking at Custom (managed) accounts and it probably wouldn’t be possible to chose another type.
We’ll of course communicate if this feature gets officially released. Stay tuned!
Nice to see the announcement of the merge into the main branch. The managed accounts model is not going to suite everyone but it is a great start and awesome response to the communities desire to have something other than PayPal. Marketplace administrators should read all the terms associated with Managed Accounts very carefully.
Under the Custom accounts model the marketplace is responsible for all aspects of the transaction including all fees and charges, including credit card chargebacks. Credit card chargebacks can be extremely damaging to the finances of any business, especially one such as a marketplace where you might only be making $3 or $4 per transaction. The costs associated with the Custom model are also much higher than the standard model. The marketplace will need to update their terms of service to factor in the Stripe terms of service. The marketplace is then responsible for collecting all the identity information needed so that Stripe will make payouts to account you create. Any finally the marketplace is liable for Fraud and loss experienced by buyers where sellers don’t deliver on their promises. Managing Fraud is a science on its own. So in summary the Custom model although much easier to get individuals onboarded, the marketplace owner bears all the risks and costs associated with those sellers, even the fraudulent ones.
The standard model creates greater separation between the seller and the marketplace. So although not as a seamless a user experience for sign-up, the seller is responsible for all charges including chargebacks. The marketplace terms of service can be simpler and let users know they are facilitating the two parties to connect and transact but have not liability in the transaction. The seller is responsible for providing stripe all their identity information and stripe manages all this process while the charges for transactions are lower. So in summary standard accounts although a little more difficult for sellers to setup, create a natural barrier to fraudsters and is cheaper for the marketplace and less risky over time.
We are using the Standard model. We did our own integration about 18 months ago and have been maintaining it ever since. Every time we merge main branch we have to pick through everything and get our stuff to work again as there is not really a plugin framework for payments.
But it has allowed us to setup different security roles and as a result have Paid and UnPaid member type subscriptions.
We are now also reaching the point where our business/suppliers are asking us to provide integration options to their existing booking engines such as XOLA, FareHarbour, etc, etc, the list does go on, it would be nice if there was a plugin model that allowed Order Types to be defined as external integration options…It is not core ST but we are likely to start building these integrations to make it easy to resell our suppliers existing inventory lines.
Matthew, great points! You are correct. Indeed, with Custom accounts, the marketplace carries a bigger part of the financial risk. The way I see it, the benefits of the Custom vs Standard accounts are the following:
Standard accounts:
Less financial risk for the marketplace, as each seller
Quite a complex onboarding experience for the sellers, as each seller needs to create their own Stripe account. Doesn’t really work for peer-to-peer marketplaces, where the sellers are individuals. Having too complex an onboarding experience for the sellers has been a barrier of entry for many of our customers, and they lost lots of sellers because of that.
Custom accounts:
An extremely simple white label onboarding for the sellers: only provide your legal name, birth date, address, and bank account number, and start receiving money immediately.
The fact that a marketplace is taking more responsibility for the chargebacks etc can also be a big value proposition for the marketplace, justify a higher commission and prevent people from circumventing the payment system. It’s always a good idea to take some pain away from your sellers if you can, even if that means you need to do a bit more work today. Also, Stripe has quite good fraud protection tools these days, like https://stripe.com/radar . Alternatively, you can say in your terms that chargebacks are on the responsibility of your sellers, and charge the money from them if there’s a chargeback (this probably works in most cases).
There’s some financial risk to the marketplace, especially if it’s acting in an industry plagued with credit card fraud. If you’re in such an industry, it might be a better idea to rely only on our PayPal integration, since the big benefit of that is that it removes all the risk from the marketplace, and offers good protection for both parties.
I agree with your argument, I think there is a place for both, so would be great if the platform could support both models.
Another thing to consider with the managed/custom account model. In some jurisdictions this would be classified as providing the tools for work to the sole trader and blur the line between being an independent operator and an employee of the marketplace (see Uber legal case). In Australia for instance, if a contractor looks and smells like an employee than the law will treat them as such irrespective of whatever legal paperwork they may have signed. In Australia this can mean being liable for employee leave entitlements.
This is a great point! However, I believe that in this case the key distinction is not whether the provider has a standalone or custom Stripe account. In both cases, they have a Stripe account. Instead, I would imagine that the key here would be whether the provider is able to set their own pricing. If they can decide on that, they can hardly be interpreted as an employee. In general, the more rules and restrictions the platform sets for its providers, the more likely the providers will be classified as employees.
I am looking into modifying the current Stripe Connect form a custom account to an express or standard account, depending on our needs. The current form seems to ask a bit too much data out of our users and we wanted to know how you went about this? Has anyone migrated to Stripe Connect Express?
Stripe recently got regulations from governments what require them to know their customers better. That directly impact marketplace owners who use Stripe as payment platform (don’t get me wrong – Stripe is excellent). Luckily for marketplace admins Stripe create an on-boarding process (not sure how it is working in Go) what handle requested information collection as it’s a relatively complex structure based on the location of your Stripe account. By this, I’m trying to say that I’d suggest double-checking if migrating from Custom to Express or Standard will make user on-boarding process easier and what would be the downsides. And finally, you should keep in mind your government regulations and would it be possible that they at some point require you to “know your customer better”, and you would again migrate back?