Comment by strnisa
2 days ago
If you store funds for a specific service that you provide, it's fine. If it's for many services or services provided by others, it's legally problematic.
2 days ago
If you store funds for a specific service that you provide, it's fine. If it's for many services or services provided by others, it's legally problematic.
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.
Ah neat, thanks for the clarification.