Stripe Connect - Application Fee in Different Currency

[Renata]

I work for a crowdfunding company and we are thinking of switching to Stripe Connect.  We have the same basic requirements as Kickstarter, etc - allow users to get paid directly, minus a 5% fee that we collect.

We would like to be able to offer our users the ability to accept credit card payments in any of the countries where Stripe is available and out of beta - i.e. the US, Canada, Australia, the UK, and Ireland.  However, my company (which would be receiving the 5% fee on the transactions) only has incorporated business entities in the U.S. and Australia.

So for example, if we have a UK-based project on our site that wants to be able to collect their funds in British Pounds, is there a way for us to run this type of transaction and collect our 5% fee without needing to incorporate in the UK?  

We don't mind collecting the 5% fee in US or Australian dollars - one idea would be to allow the project to be paid out in GBP, but do a conversion and collect our 5% in USD - but it was unclear to me from the documentation at https://stripe.com/docs/connect/collecting-fees if it would be possible to charge the application_fee in a different currency from the main transaction.

Thank you,

Renata

[Jim Danz]

Hi Renata,

Thanks for writing in! We should clarify this in our docs, but the
setup that you described sounds like it should work. If you have a
U.S. entity (that is only able to receive funds in USD), and you are
collecting application fees for charges created in other currencies
(like GBP), those application fees will be automatically FX'd to USD
before they hit your account. So it's not so much that you can
"charge" the application fee in a different currency, but that it gets
automatically converted.

So to be specific, what you can expect if you have a US Connect
application owner account, and a GB connected merchant:
* Under GB merchant, create £100 charge with £5 application fee. GB
merchant nets £95 minus Stripe fees.
* £5 application fee is FX'd to USD before it hits your Connect
Application owner account (so it'd wind up as $7.85, say).

I hope that helps clarify the model a bit! Again, the long and short
of it is that you can accept platform fees in any currency, and they
are automatically FX'd to a currency that you are able to receive
transfers in.

(The fact that you have an Australian entity as well complicates
things slightly, as we don't currently have a good story for housing
multiple conceptual corporate entities under the same Stripe account.
Depending on your setup, it may make the most sense to have one
connect application for AU owned by an AU Stripe account, and one
connect application for US + all others, owned by a US Stripe
account).

Jim

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[Renata]

Hi Jim - wonderful, that makes perfect sense.  Thanks so much!

Renata

[Boaz Katz]

Hi,

What are the fees (if any)  Stripe charge for the £5 conversion into $? 

Is it deducted from the owner account or the connected merchant? 

Thank you!

[Matthew Arkin]

From what I’ve been told:

The merchant would pay a fee (2%) to convert the amount that will end up in their bank account assuming the funds need to be converted. 

The app owner would pay a fee (2%)  to convert the amount that will end up in their bank account assuming the funds need to be converted. 

So if you charge 10 Euros and charge a 1 Euro application fee and both you and your connected merchant have USD bank accounts:

Merchant pays 2% after (10- 2.9% - .30 - 1 (application fee))

You pay 2% on 1 euro.

If the merchant has a Euro bank account, you only pay 2% on 1 euro

if you have a Euro bank account only the merchant pays the 2%

--

Matt Arkin

Kollective Solutions

http://kollective.it

http://mattarkin.com

[Boaz Katz]

Thank you.

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