Glossary
Stripe Connect
Stripe Connect is a Stripe product that lets a platform like DIY Stubs accept payments on behalf of many separate businesses, with each business having its own Stripe account underneath. The platform collects payment, takes a small fee, and pays the rest out to the underlying business automatically.
Why platforms use it
Without Connect, a platform would have to be the merchant of record for every sale. That would mean it collected every dollar, was responsible for taxes and refunds on every transaction, and held money on behalf of customers it had never legally vetted. That model struggles to scale, and it puts a lot of risk on the platform.
Connect inverts that. Every organizer signs up with Stripe through the platform's onboarding flow, completes Stripe's identity verification, and gets a Stripe account of their own. The platform routes payments into that account, takes its commission, and Stripe handles the compliance, tax forms, payouts, and the worst of the disputes.
What organizers experience
When you sign up for DIY Stubs, you go through Stripe's onboarding screens to verify who you are and connect a bank account. From your side, it looks like one extra setup step. Behind the scenes, you now have a Stripe account that pays out to your bank weekly.
Things that happen on your behalf through Connect:
- Card payments are charged on each ticket sale and the money is held in your Stripe balance.
- Weekly automatic payouts go from your Stripe balance into your bank.
- Tax form 1099-K is issued by Stripe if you cross the IRS reporting threshold for a given year.
- If a buyer disputes a charge, the dispute lands on your account and Stripe walks you through the response.
What Stripe Connect is not
Stripe Connect is not the same as Stripe's regular merchant account. Connect is the multi-account product specifically for platforms. It is also not Stripe's tax tool, payroll, or fraud product, although the regular Stripe Dashboard you can open from your DIY Stubs account gives you access to several of those features.