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Stripe Connect: The Payment Infrastructure That Powers Marketplace Economies

Stripe Connect: The Payment Infrastructure That Powers Marketplace Economies

Stripe Connect enables platforms and marketplaces to route payments between buyers and sellers, with three account types offering different levels of control and compliance burden.

Stripe Connect is Stripe's platform and marketplace payment product, enabling businesses to build multi-sided payment flows where money moves between platforms, sellers, and buyers. ## Three Account Types - **Standard**: Connected merchants manage their own Stripe accounts. Simplest to implement, least platform control. The merchant is the merchant of record. - **Express**: Stripe-hosted onboarding with a streamlined experience. Stripe handles KYC/AML compliance. Good for marketplace sellers without existing Stripe accounts. - **Custom**: Fully white-labeled — no Stripe branding. Maximum platform control over UX and onboarding, but the platform assumes full responsibility for compliance. Highest engineering overhead. ## How It Differs from Merchant of Record A key architectural distinction: with Connect, the sub-merchant (not the platform) is typically the seller of record. This differs from merchant of record services like Polar.sh vs Stripe for SaaS: When Merchant of Record Beats Direct Processing, where the intermediary is legally the seller and handles all tax liability. Connect platforms capture fees via application fees or direct charges, but don't assume tax collection responsibility for their sellers. ## Pricing Usage-based on top of standard Stripe processing fees: typically 0.25%–0.5% per transfer depending on volume, plus per-payout fees. This consumption model makes it economical for platforms to start small and scale. ## Market Position Connect dominates the developer-first managed payments space. Competitors include Adyen for Platforms, Braintree Marketplace, and PayPal Commerce Platform. The broader trend of embedded fintech — SaaS platforms incorporating financial services as features — has made Connect-style infrastructure a standard expectation in the SaaS Payment Provider Landscape 2026: Processors, Merchants of Record, and Subscription Layers.

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