How Stripe Transfers Work

This page describes the functionality of the Stripe Transfers API integration with the Split Pay Plugin.

With the Split Pay Plugin, payments are initiated on the Stripe Platform Account, which also handles Stripe fees.

The Split Pay Plugin then initiates a Transfer from the Stripe Platform Account to any Stripe Connect Account(s) configured in the plugin settings.

The Split Pay Plugin subtracts a Transfer amount from each transaction and sends it to one or multiple connected accounts.

When processing payments with the Split Pay Plugin, there are at least 2 accounts involved:

• Stripe Platform Account - This is the WooCommerce store owner's Stripe account.

  • This account must be connected to the WooCommerce Stripe Payment Gateway Plugin AND the Split Pay Plugin, as mentioned in our Quick Start guide.

• Stripe Connect Account(s) - These are the accounts connected to the Stripe Platform Account. These accounts receive a Transfer amount configured by the Split Pay Plugin.

This is the Stripe processing flow when using the Split Pay Plugin:

1. WooCommerce Transaction Completed

2. Transaction Appears in Stripe Platform Account Dashboard

3. Stripe Transaction Fees are applied (typically ~3%).

4. Transfer initiated from Platform Account to Connected Account(s)

Use Cases

The Stripe Transfers API differs from the Stripe Direct / Destination Charges APIs that are commonly used by other marketplace plugins for WooCommerce. Please see the list of restrictions on the Quick Start guide.

The main disadvantage of the Transfers API is that transaction fees are processed by the Platform Account and then Transfers are made to Connected Accounts. This means fees are not taken into account during the process automatically and may affect the amount retained by the Platform account.

Selling Tickets and Taking Commission

For instance, if you are selling tickets on your WooCommerce Store and want to charge a commission, the money flow looks like this:

• WooCommerce/Stripe Txn --> Stripe Deducts Fee --> Initiate Transfer to Connected Account

  • The commission amount is therefore variable and determined by the difference of the Stripe fees vs the transfer amount configured in the Split Pay plugin settings.

Paying Vendors for Fulfillment or Shipping

For instance, if you want to automatically pay vendors who fulfill and/or ship products, the mone flow looks like this:

• WooCommerce/Stripe Txn --> Stripe Deducts Fee --> Initiate Transfer to Connected Account

  • The vendor receives the exact amount needed for the product and/or shipping.

The Split Pay Plugin is therefore best suited for "vendor/supplier" type business models rather than commission-based business models (unless you have no problem with variable commissions because of fees).