Ever thought what all it takes to create a marketplace or an eCommerce website like Amazon, Etsy, Amazon, Airbnb, and Uber? Isn’t it exciting but yeah very much scary? Large technology-based businesses like them are not like the layman businesses or the “normal businesses”. They are multifunctional and have a lot of moving parts. One of their biggest nightmares is “How to handle the payments?”. Operating in different countries and handling various currencies with varying tax rules and legislation is the biggest and scariest technical hurdle in payments.

There can be multiple business use cases where an individual has to pay directly to the vendor rather than to the platform. Then businesses also need to take out their split from the amount received by the vendor.

It seems like the only way you can pull it off any such complex payment systems can be with a team of highly specialized people. People who are highly skilled in handling all scales of payment with available technology stack. This probably means it would be expensive to hire them or to just consult them. It sounds like managing payment easily works for big multinational companies with big cash in their hands. Right?

No, not anymore. Establishing payment architecture with stripe connect make it easy for any eCommerce application to accept payment at any scale. You can now take online payment, set up a free trial version for the client, or just payout your vendor or to the marketplace admin/platform. Anything you can imagine with payment can be done with just a few lines of code in a matter of hours.

Connect is a powerful API which makes it comparatively trivial to build a payment system and marketplace. Before Stripe Connect, building a marketplace with payment system was considered to be an unbelievable enormous task because it involves the application of a divergent set of services. Services correspond to handling payment in, payment out, payment rollback or refunds. Secondly, ensuring it involves many regulations conformations to move money digitally across the internet. All it seems to be very ordinary to the end user but it's completely worrisome to the regulators and banks.

Business models can be categorized as either a pipeline business model or a platform business model. The difference being, in the pipeline business model the value benefit flows linearly between from manufacturer/provider to the consumer. In the platform business model value benefit is created through the exchange of service or content between various stakeholders including the producers and consumers.

The panoply of technology has enabled users to offer and receive a product or a service. Few famous examples of such businesses are Airbnb, Olx, YouTube, and Uber etc. Platform-based business model issues the plug-and-play functionality, where the service provider or the consumer can plug in directly and activate the service required. Also, they can regulate or hold the conversation in the marketplace on the infrastructure developed.

Google was among the first to set up the platform business model. Now many large technology-based companies are operating on this methodology. For instance, let's say Airbnb. It has none of its owned property. It provides a platform for the property/lodging owners to rent their asset for an amount and duration whose commission is sent to Airbnb based on the payout scheme applied. Youtube doesn’t create any of its own content. People upload their content and rest subscribe to their channels. Uber Taxi and Uber Eats don’t have its own taxis or restaurants running globally. Instead, it is a platform where registered drivers can connect with service consumers.

Stripe encourage platform business model. Stripe Connect provides powerful API and other services that help you easily mitigate the payment process. Payment process could involve accepting payment, KYC/Anti-Money Laundering, pay seller or the service providers.

Stripe Connect permits an individual to convert their mini-business into a platform. After registering with Connect, a platform owner can control and understand these transactions between their business and customers without any hassle.

You can custom tailor your integration in multiple ways. Alterations can be done in cash flow from the customer to the vendor and then to the platform provider or seller. Fees collection from customer and log management of transactions. Specifying the payout schedule and the method of payment for payout to the platform. Lastly, tailoring can be done in supporting a different form of Stripe account.

Connect can be used in making on-demand apps like Lyft and Handy else could be used in an online eCommerce store. In fact, there is an app named Baremetrics which is an analytic service which has Connect integrated.

Any country that supports Stripe has a reach to Stripe Connect as well. Stripe Connect has to offer three types of accounts.

a.) Standard

b.) Express

c.)  Custom

Standard accounts can be created in any country which is in support of usage of Stripe. Countries to whom the invite is sent doesn’t enable the user to create select a standard account

Express account can be only created for a user in the USA. The account can be created by any supporting country.

Custom accounts can be created in Hong Kong, Japan, European countries like Belgium, France, Germany, Italy, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, Western countries like Canada and the United States of America, Australia etc.

The sellers who are willing to enroll in your multivendor platform need to create a stripe account in order to receive the payment made by the end users buying through the platform from your store. The type of account a store administrator opens up for the sellers enrolling decides who will be responsible to process transactions, chargeback, and user support etc. The three accounts cater to different business use cases.

For example, if the store owner doesn’t want to dissipate a lot of time on building a great user interface with customization in onboarding flow then Standard or Express account can be used. If the store owner needs to create a tailored connected user experience and interface, Express, and the Custom account which comes with an additional charge can be brought into implementation.

A standard account is the prevailing Stripe account which can be handled by the users enrolled in the platform. A user with the standard account is actually using its stripe account integrated with the connect, can log in to the dashboard and can process the transactions or charges on their own. They can disable their account as well if desired.

A prompt recommendation can be given to the platform used to create a Stripe account or reach to the people with Stripe account to connect with your platform. The utility of the standard account is when:

1. A platform has to be started quickly and need not much control over the user experience components
2. Have a user that is already running their online business but with static online content or the user with existing Stripe account
3. Want to use direct charges which is nothing but the associated price with a product or the service and exclude any indirect cost like administrative charges or some sort of depreciation.
4. Prefer to Stripe directly communicate with the enrolled user in case of any discrepancies in the account.

Express account provided with the capability of handling the chargeback and disputes to the platform owner. Besides that, it enables the ability to specify the charge type which can be either of the following:

Direct Charges: The end customer pays directly to the service or product provider without knowing the involvement of platform,

Destination Charges: It is the fees of the service or goods the platform charges from the end user

Separate Charge and Transfer: In the case of multivendor eCommerce cart where a cart can consist of multiple products of various vendors, the amount is charged by the platform and distributed later through payout by the vendor.

Unlike Custome account, Express handles onboarding and KYC/AML process. With Express account, the platform owner will have a lesser view of Stripe dashboard which would allow them to manage their personal information, transaction logs and payout to the banks.

Usability

1. For a quick start. Letting Stripe see all the process involved in onboarding of the vendors, management, and verification of the customers.
2. Want to use the three charges - Direct, Destination, or the Separate charges
3. Want to take control of the User Experience
4. For businesses and customers based in the USA

An account type where all the interactions are held between the customer and the platform owner. This interaction of the platform with the customer includes seeking out the information from the store customers as well. The platform owner has the ability to customize all of the settings regarding the account. This includes a payout to the vendor bank or debit card account.

Usability

1. When a platform owner has to have complete control of the user interface.
2. When you can collect the information required from the end customers, create user dashboard, and handle customer support.
3. Direct communication of the user with the platform rather than with Stripe support.

Connect makes it easy to automatically keep a track of balance amount in the platform’s account, batch payout handling, chargeback. With connect, administrator of the storefront could set the payout timing for their use and can also permit instant payouts. Stripe Connect help recipient receive their money securely and at lightning fast speed, removes error and reconciliation work.

The cash flow can be as following:

One-to-One: Customer pays for the service and a vendor get directly paid without the intervention of the platform.

One-to-Many: Customer pays for the service and multiple vendors get directly paid without the intervention of the platform.

Many-to-Many: Multiple customers are charged as a part of their monthly subscription and split across multiple vendors.

Account Debit: Vendor directly redeems money for the service they are providing from customer’s Stripe account.

Holding Funds: Using this scheme a platform will hold money received from the buyer and pays out to the vendor after 90 days.

Connect Payouts: A platform using connect to only distribute money to the recipient.

Top-Ups: Recharging Stripe account with digital cash using the linked bank account.

Paying money to a recipient is regulated by rigid laws and a platform has to make sure that they adhere to the policies set by the digital payment industry. This includes KYC, Sanction Screening where the list of sanctions is reviewed and made sure that it is met with the standards of international sanction regulations and no investor in your fund is supporting terrorism, money transfer restrictions.

Stripe Connect provides support to cut down time in managing these tasks. It carries forward them on its own. You just have to focus on your market and its promotions.

In a multivendor marketplace or platform, payment compliance issues like card network rules, tax reporting, AML etc. can definitely be one of the most onerous obligations to your sale. Connect does it all and under the hood provide secure credit/debit card payment. Connect is powered by secure credit card data tokenization where the data package is encrypted into a token all of which help to meet PCI DSS.

With this plugin, the amount paid by the buyer would directly go to the seller’s Stripe Connect account.

All it needs for the platform to register itself with Stripe Connect and the vendors in the eCommerce site to get authorization with the platform in order to receive the amount.

A platform owner has to install the plugin and later fill the information related you their stripe accounts such as secret ket, client key, and the publishable key.

To connect a vendor’s account to your own platform, open their dashboard and go to seller’s info. At the bottom of the page, a button with text ‘Click to Connect with - Stripe Account’. Sellacious documentation provides steps to follow to integrate Stripe Connect.

We also provide 24x7 customer support to all of our customers. Free consultations and call to action in order to integrate Stripe Connect with your Sellacious site are also entertained by our team of experts.