What is a platform fee on Stripe Connect?

What a platform fee is

Stripe Connect is the part of Stripe that lets a platform take payments on behalf of the businesses that use it. Each business has its own connected Stripe account, and buyers' payments are made to or for that account. The platform fee is how the platform earns from those payments: on each charge, the platform tells Stripe to set aside a fixed amount or a percentage for itself. Stripe moves that amount to the platform's own account and the rest to the seller, minus Stripe's processing fees where the seller pays them. In Stripe's own documentation this is called an application fee, and it appears on the payment in the seller's dashboard so they can see exactly how much was taken. Platforms use it instead of, or alongside, a monthly subscription. It is different from a surcharge, which is an extra amount added to the buyer's total for paying by card.

How it is taken on a direct or destination charge

Stripe offers platforms several ways to create charges, and two are most common. With a direct charge, the payment is created on the seller's connected account. The buyer's statement shows the seller's business name, the seller's account pays Stripe's processing fee, and the platform's fee is deducted and sent to the platform. Refunds and disputes are the seller's to handle, from their own Stripe dashboard. With a destination charge, the payment is created on the platform's account and the funds are transferred to the seller. The platform pays Stripe's processing fee and keeps its fee by transferring less, and the platform is responsible for refunds and disputes. Either way the arithmetic is similar for a $100 order: Stripe's fee comes off, the platform fee comes off, and the seller receives the rest. What changes is whose name the buyer sees, who carries the Stripe fee and whose problem a chargeback becomes.

When it matters to a seller

A platform fee matters most to a seller with thin margins or many small transactions. A 2 percent platform fee on top of card processing can be the difference between a profitable order and a break even one on a $20 item. It matters when comparing tools: a website builder that charges a lower monthly price but a higher platform fee can cost more for a busy shop than one with a higher subscription and a lower fee, so work through a typical month's sales on each. It matters for bookkeeping, because the fee is a business expense that should be recorded against the sale rather than lost inside a smaller payout. And it matters when refunding: on many setups, refunding a buyer does not automatically return the platform fee unless the platform chooses to refund it, so the seller can end up out of pocket on a refunded order.

Common mistakes

Confusing the platform fee with Stripe's own fee, then wondering why the payout is lower than expected. Comparing platforms on monthly price alone. Assuming the platform fee is refunded with every refund. Adding a card surcharge to cover a platform fee, when Australian surcharge rules limit surcharges to the cost of accepting the card, not a platform's cut. Not reading which charge type the platform uses, so the seller does not know who handles disputes. Forgetting that payouts come net of fees, which makes reconciling bank deposits against orders confusing unless the Stripe report is used. Treating the fee as fixed forever, when platforms often set it by plan. And not checking the seller's own Stripe account settings, such as the statement name, which buyers see on their card statement and use to recognise the charge.

Where it shows up in OneCraft

Sites built with OneCraft take payments through Stripe Checkout as a direct charge on the owner's own connected Stripe account, so buyers pay the owner's business and the owner handles refunds from their own Stripe dashboard. The platform fee depends on the owner's OneCraft plan: 2 percent on Starter, 1 percent on Pro and 0.5 percent on Pro+, with Stripe's own fees on top. The free plan cannot take payments. Stripe is connected once, in account Settings, Payments, and until it is connected, orders on a site stay pending and visitors see that online payment is not available yet. Prices are read from the site's own database, never from the browser, and a webhook marks each order paid or refunded when Stripe confirms it, so the order record in the site's admin area matches what happened at Stripe.

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