Stripe Payment Direct vs Destination Charges

Question

I am trying to build e-commerce platform for my project. Sellers can upload their products and customers can purchase them. Payment gateway I chose is Stripe, but there are some types of charges that I am confused about. Can you guys correct me that I understood the payment flow right?

Direct charge

Buyer buys product -> stripe charges buyer -> stripe pays seller

Destination charge

Buyer buys product -> money comes in to my stripe account -> I payout money to seller

I am confused at this part. If I use direct charge, Stripe handles charges so it does have nothing to do with mu stripe account except for application fee?

Lastly, if I were to build an e-commerce platform that has many sellers, which charge is suitable? And which account type is suitable?

Thank you!!

Answer 1

The charge type you use with Stripe Connect (direct or destination) mostly depends on the type of connected accounts you want to use:

• Direct charges should be used with Standard accounts
• Destination charges should be used with Express and/or Custom accounts

In order to determine which account type is the best choice for you use case check out the "Choose your account type" documentation.

Once you've decided on an account type you should read either the documentation for direct charges or the documentation for destination charges.

Your description of "an e-commerce platform that has many sellers" is too vague to give you a specific recommendation, but reading through the documentation above should make the choice clear.