Hello,
In Europe 3DSecure is a mandatory layer of protection (PSD2).
The current implementation of the stripe plugin will send all the money to the administrators account first, which is from my perspective an illegal behaviour in EU if the marketplace owner doesn’t have a banking licences.
Is there any chance to use 3DS AND send just the commissions to the administrators account?
Thank you
Daniel
Are you sure this is how it works? Have you consulted with banking lawyer?
Thinking by common sense, I don’t think CS-Cart would leave such a large issue in add-on, so that it becomes unusable in EU.
My assumption is based on the explanations of the payment providers:
Hello!
Thank you for bringing this up. I’ve read through the Stripe Connect article you link in your post. I’m not a lawyer, so what I say below is not a legal advice — even Stripe reps don’t dare to give it in their article.
But hopefully, I can help alleviate some concerns, or at least provide some info that’ll help with getting legal advice.
The two main implications I got from the Stripe article are that:
EU regulations forbid a set-up where a marketplace somehow receives the money to its own bank account, and then disburses that money to sellers through whatever means. In this scenario, the marketplace would have to receive a payments license.
Stripe Connect is designed in a way to let marketplaces and sellers leverage Stripe’s own payment license. To that end, Stripes accepts payments through your site and handles disbursement to the marketplace and the sellers. Marketplace and each seller have their own accounts in Stripe Connect, and transactions take place within Stripe.
The tooltip in the CS-Cart interface that you’re referring to was added when we were adding the support of 3D-Secure to Stripe Connect. It describes changes in Stripe account behavior with 3D-Secure enabled.
Without 3D-Secure, CS-Cart used “Direct Charges”: payments to the marketplace were taken from vendors as application fees.
With 3D-Secure, CS-Cart uses “Separate Charges and Transfers”: funds go to the Stripe accounts of the marketplace and are sent to vendors as Stripe “Transfers”.
Thanks for your evaluation
You are correct, the Stripe Connect addon is locked by CS-cart and makes the feature borderline illegal in EU.
When 3D secure is deactivated there is a breach of law for EU based companies.
When 3D secure is activated the “Destination Charges” doesn’t work and Vendors won’t receive information about Stripe Fee or a Stripe Tax Document.
There is no workaround for this, it’s a restriction in CS-cart Stripe Connect addon.
Thank you for stepping in, @rivernue. Just to make sure, was
an assessment from your lawyer? I’m trying to understand if the issue could be in our wording of the tooltip, in our integration, or in Stripe itself.
To clarify further, we implemented Stripe Connect in CS-Cart the way we did, because that is what Stripe recommends for marketplaces.
This approach allows Multi-Vendor marketplaces to have a single cart with products from different sellers. Your customers only need to make one payment, which is then distributed automatically through Stripe between the sellers’ connected Stripe accounts. The marketplace retains its fees.
There are at least two occasions when Stripe reps recommended “Separate Charges and Transfers” for marketplaces (our approach that we use with 3D-Secure enabled):
Not a lawyer, an Accountant Controller.
Stripe recommends using the following solution;
Stripe Connect > Stripe Checkout > 3D Secure > Direct Charges.
But CS-cart “Stripe Connect” addon doesn’t allow this.
I’ve brought these issues up soo many times with both customer service and other forum topics, even made new topics myself.
Issues with;
Accounting
Stripe Connect
Admin-to-Vendor Invoice
Etc.
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