I am working on a software that is to be used by businesses which make about $0.5mil revenue per year. I would like to incorporate into the software the option for my users to accept card payments from their clients. So far it seems I have the following options:
Manage multiple merchant accounts on behalf of my clients, however this has a few drawbacks. I would, for example, like to charge some small fee to cover the costs (about 0.1%) which I cannot accept if the payment to my user doesn't go through some stage that I can control where I can deduct the fee and send it my way. Also, about 50% of the mentioned revenue is paid for by credit or debit cards so a volume of $250,000 might not be enough to cover the fees set by the account provider.
Send everything through a merchant account that I control and then distribute the funds to the users. This, however, seems like a very small scale solution at best with the average number of payments per user per day being around 15.
The end result should be that the user enters a price in the software, this gets sent to a card reader where the user's client inserts their card and makes the payment. The amount charged includes all the fees associated. The amount paid will then be sent to some merchant account where my fee will be sent to me and the merchant fee will be deducted, the rest will be sent to my user's account. The whole point being that the user doesn't have to bother with setting up merchant account or card reader and simply gets a card reader from us which connects to the software and can immediately accept payments.
I sincerely hope I am missing something but I would appreciate any help with finding a way how to charge clients of my users and take some small fee.
So as it turns out, the best way to do this is using Stripe after all. If anyone is ever concerned, this is how I solved the problem.
Stripe is currently rolling out Managed Accounts of their Stripe Connect which can be used to effectively manage Stripe accounts for my customers. Therefore, once a user registers for my payment program, I create a managed account for them without the user knowing at all. For incoming Stripe payments I can then use the destination property as the id of the account where the money should go and specify an application fee which will be charged to my own account.
From there on the only problem to solve is that Stripe only supports online payments which can be overcome by using for example Payworks, however so far their service has been pretty terrible so this may be a weak point in the system.
Related
I have account B connected to account A (both are standard accounts).
What I'm trying to do: accept a payment through A and send the full amount to B, which then gets charged the corresponding Stripe fees.
What I did: Created a webhook that fires on charge.succeeded and does a transfer to the connected account (B), using the charge id in source_transaction (As per https://stripe.com/docs/connect/charges-transfers)
What happens: The connected account (B) seems to get the full payment, without fees, the fees seem to be charged to account A
Could it be that it's because in test mode? The idea is to use account A to send/split a payment between other accounts (1 or more), as in a marketplace.
You'd usually simply use a Direct Charge — https://stripe.com/docs/connect/direct-charges. That's exactly how you platform A makes an API call on connected account B to facilitate a payment, and the fees are paid by B.
The link you posted is for a more advanced integration where the platform processes the payment(and therefore pays the Stripe processing fees) and then transfers money to a connected account(like a company like Lyft charging a rider, then transferring some of the money to the driver).
The idea is to use account A to send/split a payment between other accounts (1 or more), as in a marketplace
You can't use Direct Charges to split a single payment between multiple connected accounts such that they all pay the fees separately. The most you could do is make multiple separate charges — like take the card from the customer, clone it to each individual account involved, and do N separate charges (https://stripe.com/docs/connect/cloning-customers-across-accounts) on each of them. I wouldn't really recommend that since it likely leads to more declines and disputes(it's weird to have a shopping cart with 5 items from 5 sellers and get charged by the actual 5 sellers, I would expect to be charged once by the company that runs the marketplace).
If you really need to do this type of business model where you take a single payment and then split between multiple sellers then you do need to take the approach you linked to, and have the platform pay the fees, that's the only way, it's specifically discussed at https://stripe.com/docs/connect/charges#types in detail.
Say I have a company where I want to make direct deposits to members' bank account. I understand that's it a really bad idea to ask them their information on the site and store it in the database.
But what If i ask our members to email us their bank info for direct deposits? I would then simply take their info and put it in excel sheet instead of storing it in the server(and delete the original email). That would be my reference point to sending the members direct deposits using my bank account. Is that legally allowed? If not, what would be another method to request a member's bank account info to make direct deposits?
Collecting banking account information has significant security implications and doing via email is not kosher. But there are alternatives.
The simplest alternative is using interbank service like Zelle where you can send money to your members' bank accounts using just their email accounts (the one associated with their bank login). We pay our smaller vendors this way and most get paid immediately without any transaction fees. But this may not work for members who use smaller banks outside the network (e.g credit unions) and the service does not have sophisticated tracking or linking to invoices.
If you have international members or need a more scalable/programmatic/self-serve solution, you can consider using a payment gateway provider like paypal/braintree or stripe-connect. Stripe is especially easy to integrate with a website and instead of you collecting and maintaining banking information for your members, stripe does on your behalf. Companies like Lyft use this to pay their drivers. It scales and works in almost all major international locations. Downside is there are per transaction fees which get steep if you want instant payments.
OK, I am a little confused on the best way to setup Stripe for customer to customer direct bank transfer. Here's what I want to do.
I am building a rental platform where a tenant and landlord can enter their bank information (routing and account) and then on a monthly basis transfer money from the tenant to pay the landlord directly (ie, bank to bank transfer) for that months rent.
I think Stripe Connected account makes the most sense to make this happen. But I guess I am not fully understanding the flow, even after reading the docs. Any insight will be greatly appreciated.
You need to use Stripe Connect to accept payments on behalf of others. In your scenario, you'd create customers for the tenants and connected accounts for the landlords, then create charges to move funds from a tenant to a landlord, with your platform optionally taking a cut out of the transaction.
Since you want the tenant to pay via bank transfer, you'd need to use ACH rather than cards.
I'm assisting in development of a backend for a painting service that works with many contractors across the US. We've been using Stripe, but the business has been paying the contractors using their bank's ACH service add-on which takes 3-5 days and has to be done manually.
Balanced seems like it's Stripe + next-day ACH payouts with a great API, automating everything. Is this an accurate description of the service? I'm confused why you'd ever use Stripe over Balanced in that case. This is assuming it's also a merchant account + payment gateway like Stripe if I'm reading correctly.
Still wrapping my head around how to best make this work. Thanks everyone.
Stripe:
Charge cards
ACH payouts
Recurring billing
Webhooks
OAuth merchant signup
2.9% + 30¢ per charge
Holds funds for 7 days before you can pay out
Charges in USD or CAD
Balanced:
Authorize and charge cards
ACH payouts
ACH debits
Fully API driven merchant signup
Escrow account
Recurring billing
Webhooks
2.9% + 30¢ per charge, 25¢ per ACH credit (volume pricing calculator)
Funds are available immediately for payouts (vs Stripe's 7 day rolling reserve)
Charges in USD
In a nutshell the fundamental difference is that Stripe focuses on bringing money in to your account, Balanced focuses on bringing money in, holding it until an order to fulfilled, and paying out to your merchants.
You can use Stripe to collect money and Balanced to pay out easily enough, the biggest problem you'll run into is that there will be a liquidity problem as you have to transfer funds from your Stripe to Balanced before you can pay out or create a float of 7 days.
Stripe is also great if you have sub-agents or affiliates that you want to have run the sale, but where you take a percentage of the total charge as well. We recently implemented this for a cause oriented site that supports the collection of donations for smaller and more personal causes. It is one of the more interesting features of the Stripe API. Sub accounts can be created on the fly and activated via a simple email validation creating a one-stop shop for configuring online affiliate programs.
Both are good for specific things, for example balanced will let you collect money from groups in a single pot (in their escrow), and then pay it out. Stripe is good for automated billing.
Stripe is a established company that has a polished interface and support. Balanced is a fly-by-night.
I have one site with Balanced and one with Stripe Connect, and this is the defining difference.
Balanced changed their API and completely broke all transactions.
They didn't even send out an email. Never happened with Stripe.
Balanced once "held up our site for review". Our marketplace went down with no notice or email. (And no explanation when I emailed them, just a response it was being held).
balanced.js can take 10-15 seconds to load, causing the page to hang (we implemented lazy loading just for balanced, but the page is not always ready when needed).
IRC support: Balanced has ~40 inactive users and ~10 users online ATM [in the middle of the U.S. night there are no user, and the inactive users have no AI personality]. Stripe has at least 100 active users, and I seem to be able to get an answer whenever I need to.
etc.
Balanced has one killer feature - your users can sign up and start selling immediately, they don't need to validate themselves to sell, only to receive money.
They are more likely to follow through if it's easy to get into the system. But the risks are real, and should not be ignored.
Also, if it matters, the fact that Stripe can accept payments in multiple currencies can be a killer feature as well.
I am using Stripe for online payments but also users can pay offline (cash or check). I want to centralize all my invoices/charges in one place (Stripe).
I am not sure if I can add offline payments (cash or check) to stripe or not. I guess I can if I created customers, invoices, charges with livemode=false for my live keys.
Is this feasible and will Stripe accept having some (customers, invoices and charges) with livemode=false and others with livemode=true?
If yes, should I fill fake credit card info or should I set it as nil?
Stripe does not allow you to create a Subscription on a Customer if you don't have a credit card setup. More accurately, it does not allow you to create a subscription if a customer does not have a way to pay for the next invoice. So for offline payments, you could update the 'account_balance' on the customer to have a negative value equal to the amount the customer wired (credits). Stripe will then allow you to create a subscription for the customer because it knows that the customer has enough account balance to pay for the next invoice. This post has more details.
We don't currently support offline payments, so you'll want to look at a separate accounting system for those payments.
That said, it's totally understandable that you'd want to keep this data in one place. You might be interested in using our webhooks system to offer live updates to your accounting system without directly touching the code that creates the charge in Stripe.