Comment by strbean
What if you inverted the trust equation by giving the money to the service provider immediately, rather than holding any of the up front payment?
What if you inverted the trust equation by giving the money to the service provider immediately, rather than holding any of the up front payment?
We don't hold upfront funds. When a customer pays, we initiate Stripe transfers to the merchant as soon as the funds are available.
Paying the merchant before the customer's card payment settles would mean advancing funds, which would start to resemble lending/guarantee rather than payments, raising regulatory issues. It would also concentrate risk at the platform: defaults from one merchant’s customers could jeopardize the platform for all merchants.