Confused with Stipe Charges and Payments. Can anyone help me through the maze?

I’d really appreciate some guidance with setting up Stripe Payments as I think I can use a more cost effective method of paying out sellers from my app. I thought I had it sussed but I had to revisit it all yesterday and now I’m lost…

My app enables people to buy small, low cost items from sellers. I add a percentage to the amount for my app. Then Stripe adds 1.5% + 20p. My average transaction size is probably only a few pounds but I’m endeavouring to go for a relatively high volume of these but lots of 20p payments to Stripe really adds up, costs my Users more and, in my mind is avoidable.

If, in a month of trading, 100 Users use my app to buy Widgets from Seller A at £5/Widget, I add, for example, 10% so the Widget now costs £5.50. Stripe then adds 1.5% + 20p which is another 28.25p per transaction. The £5 Widget therefore costs the User £5.79 and, by the end of the month, 100 transfers have been made.

Preferred Scenario
I would prefer it if I could just make a single transfer to Seller A at the end of the month. I think this is a Destination Charge(?) So each time a Widget is bought, the User pays £5.55 into my account for the Widget A (£5 and, this time, 11% commission). Then, at the end of the month in which 100 Widget A’s are bought, I’d send the seller a payment of £500 for all the Widget As bought leaving £55 in my account and Stripe would earn 1.5% of the £500 + 20p which would be a total of £7.70. This would save 99 transfers (reducing my WU?) and £20.75 and would make the products cheaper for my Users. Everyone’s a winner except for Stripe but I can understand why they would recommend the payment schedule they do.

Someone at Stripe yesterday recommended I use Separate Charges and Transfers but I can’t even see if this requires code or not.

I’m really confused and am hopeful that someone can point me to a sensible solution or point out the flaw in my Preferred Scenario above?

Many thanks in advance if you’ve read this far.

Firstly, just to be clear… Stripe doesn’t add anything to the transaction cost… it takes a cut from it…

If you’re selling something for £5 then the customer pays £5 (not £5.28)… and Stripe takes 28p from the £5 (it doesn’t add it on top).

Secondly, there are no fees involved with transferring funds from your platform account to a seller account (or vice-versa)… only fees for transactions.

So, it makes no difference at all how and when transfers are made to sellers, the transaction costs are the same - transaction costs are determined by the number (and price) of transactions (not the number of transfers).

The way to reduce your relative costs is to increase your average transaction value.

Regarding how to separate transfers to sellers from the charges, yes you’ll need to use Separate Charges and Transfers to do that.

(by the way, doing this will, in theory actually increase your WU costs - there are no additional WU costs involved in transferring the regular way to sellers, whereas handing transfers yourself will require some additional API calls made to Stripe - although the difference will probably be negligible).

I’m really confused and am hopeful that someone can point me to a sensible solution or point out the flaw in my Preferred Scenario above?

Aside from making less transfers (which will do nothing except cost you slightly more WUs, and take a lot more work to set up and manage), there is no difference in costs between your two scenarios…

As I said, the costs of using Stripe are for the transactions - there are no costs for transfers (although there may be additional costs for pay-outs, and active Connect accounts, depending on what type of integration you’ve set up - but that’s not related to transaction fees).

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