What happens when application_fee_amount is set?

What happens when application_fee_amount is set?

• A. The platform keeps the full charge amount
• B. The full charge amount is immediately transferred from the platform to the destination account
• C. The amount is split to multiple accounts
• D. The currency is converted

Answer: (B)

In Stripe Connect, application_fee_amount designates the platform’s fee from a charge. When you set it, Stripe handles the flow so the destination (the connected account being paid for the sale) receives the funds for the customer’s charge, and the platform collects the application fee as its compensation. This happens automatically during settlement, so you don’t have to manually move money between accounts. The important takeaway is that setting this fee means the platform earns a fee from the charge, while the destination account is paid for the sale.

In Stripe Connect, application_fee_amount designates the platform’s fee from a charge. When you set it, Stripe handles the flow so the destination (the connected account being paid for the sale) receives the funds for the customer’s charge, and the platform collects the application fee as its compensation. This happens automatically during settlement, so you don’t have to manually move money between accounts. The important takeaway is that setting this fee means the platform earns a fee from the charge, while the destination account is paid for the sale.