Understanding Connect account balances

Both your platform account and a connected account are still just Stripe accounts, each with their own, separate account balance.

All Stripe accounts can have balances in two states:

• pending, meaning the funds are not yet available to pay out
• available, meaning the funds can be paid out now

With non-Connect accounts, processing charges increases the Stripe account balance. The charged amount, less any Stripe fees, is initially reflected on the pending balance, and becomes available on a 2-day rolling basis. (This timing can vary by country and account.) Available funds can be paid out to a bank account or debit card. Payouts reduce the Stripe account balance accordingly.

With Connect, your platform account and each connected account has its own pending and available balances. The allocation of funds between them depends on the type of charges that you use.

Further, a platform account can also have a connect_reserved balance, used to offset negative balances on connected accounts.

Check a connected account’s balance

To check the balance of a connected account, perform a retrieve balance call authenticated as the connected account. The returned Balance object reflects the pending and available balances.

curl https://api.stripe.com/v1/balance \
  -u "
sk_test_4eC39HqLyjWDarjtT1zdp7dc
:" \
  -H "Stripe-Account: 
{{CONNECTED_ACCOUNT_ID}}
"

Accounting for negative balances

Some actions, such as refunds and chargebacks, create negative transactions in a Stripe account. Stripe handles negative transactions to help maintain a positive Stripe balance for related accounts:

• If at all possible, Stripe automatically offsets negative transactions against future payments
• Stripe first assigns negative transactions to the account on which the associated charge was made. For example, when charging on a connected account, a refund or chargeback comes from the connected account. When charging on your platform, a refund or chargeback comes from your platform account.

Despite these measures, if a connected account balance becomes negative, ultimate responsibility depends on the account’s controller.losses.payments property:

• stripe (Including Standard accounts): The connected account is responsible for covering its own negative Stripe balances.
• application (Including Express and Custom accounts): The platform is responsible for covering the connected account’s negative Stripe balances.

If a connected account balance is negative, Stripe debits their external account on file up to the maximum number of attempts allowed. If all attempts fail, Stripe pauses payouts to and debits from the external account until the external account on file is updated.

While an account’s balance is negative, you can’t send payouts to the account’s bank or debit card on their behalf. Stripe will resume sending payouts to the connected account when the account’s Stripe balance is again positive.

Automatically debit connected accounts

If Stripe hasn’t already attempted to debit a connected account’s external account for a negative balance, you can set debit_negative_balances to true to allow Stripe to automatically do so.

Auto debit for negative balances is supported for banks in the following countries:

• Australia
• Canada
• Europe (SEPA countries, which includes the UK)
• New Zealand
• United States

See the Auto Debit FAQ for a detailed breakdown of which countries and account types are supported.

Enabling debit_negative_balances triggers debits as needed, even when the connected account is on manual payouts. For more details, see Impact from chargebacks and negative balances.

Understanding connected reserve balances

To protect against negative connected account available balances that your platform is responsible for, Stripe holds a reserve on your platform account’s available balance. Depending on the connected account’s country, Stripe initiates a bank withdrawal on the account’s bank account to cover the negative balance. Although the available balance for the account zeroes out as soon as the withdrawal is posted, the platform reserve for that account is held for an additional 3 business days. You’ll see this reserve reflected in the Dashboard and exported reports (as a reserve transaction).

There are three kinds of balance activities related to reserves:

• Funds reserved to cover a negative balance on a connected account. When a connected account’s balance becomes negative, Stripe temporarily reserves a portion of your balance to ensure that funds can be covered by creating a balance transaction with the type reserve_transaction.
• Funds released after a positive balance change on a connected account. When a connected account’s previously negative balance becomes less negative due to activity on that account (for example, through new charges), a corresponding portion of your platform’s reserve balance is released through a balance transaction with the type reserve_transaction.
• Funds collected due to a long-standing negative balance on a connected account. When a connected account holds a negative balance amount for 180 days, Stripe transfers a portion of your balance to zero out that account’s balance by creating a balance transaction with the type connect_collection_transfer.

To see the current reserves held on your account, perform a retrieve balance API call but for your own account (that is, not authorized as another user as in the above).

To clear a connected account’s negative balance, and thereby remove the reserve on your account, send a transfer to the applicable account. If a connected account has a negative balance for more than 180 days, Stripe will automatically transfer your reserves to the connected account to zero out the balance. Dashboard pages and reports show these transfers as Connect collection transfers.

Holding funds

If you need more granular control over scheduling payouts to connected accounts where your platform is responsible for negative balances, you can take one of the following approaches:

• Hold funds in the platform balance before transferring them to a connected account balance
• Hold funds in a connected account’s balance before paying them out to an external account

We recommend platforms hold funds only if you have a clear purpose for holding them and a commitment to complete the payment when an event occurs or a precondition is satisfied. The typical use case for holding funds is on-demand services platforms, where the marketplace usually waits for the service to be completed and confirmed before paying out to the service provider (for example, rentals, delivery services, and ride-sharing).

Platforms should refrain from holding funds arbitrarily, and instead pay out to their connected accounts as soon as they are identified. This is usually when the charge is made. If you aren’t sure about holding funds, speak with your legal advisor.

For compliance reasons, we can hold funds in reserve for a period of time that’s based on the merchant’s country, as shown below: