07.02 · Concept · Free
Splits, Commissions & Seller KYC
Split one payment between a seller, your commission and the fees, and say what you must verify about a seller before you are allowed to pay them at all.
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Platforms, Payouts & the Agentic Money Path
Stripe Connect account types
Connect account types map directly to platform responsibility, seller onboarding, and payout control decisions.
A platform payment needs an explicit ledger: buyer charge, processor fee, platform commission, seller balance and payout eligibility. Seller funds should not be released until identity, business, tax, bank and sanctions checks are satisfied, because verification state directly controls whether a seller can be paid.
What this lesson answers
- how do marketplace payment splits work
- what seller KYC is required before payouts
- who pays processing fees in platform payments
Notes
A marketplace payment is not just “charge the buyer and send money later.” You need a clear ledger model: the buyer pays one amount, fees are deducted by the payment processor, the seller receives their net earnings, and the platform keeps its commission. In systems like Stripe Connect, this is usually modeled with connected seller accounts, platform fees, transfers, and payouts rather than one ordinary merchant account pretending to hold everyone’s money.
The mental model is that the platform orchestrates the transaction, but the seller is often the actual merchant or beneficiary. A 10 platform commission, a processing fee, and the remainder owed to the seller. Your code should be able to answer: who is the seller of record, who pays the processor fee, when is the commission taken, when does the seller balance become available, and what happens if the charge is refunded or disputed.
Seller KYC means “know your customer” or, more precisely here, know the person or business you are paying. Before a seller can receive payouts, the platform or payment provider may need to verify identity, business details, address, tax information, bank account ownership, sanctions status, and sometimes beneficial owners. The common misconception is that KYC is optional admin paperwork you can do after launch. It is not: regulated payment providers must prevent illegal payouts, fraud, money laundering, and sanctions violations, so incomplete verification can block payouts even if buyers can already pay.
After this lesson, the student should be able to design the payment flow for a platform transaction in plain terms: collect one buyer payment, allocate seller earnings and platform commission, account for fees, and avoid paying sellers until required verification is complete. They should also know that payout eligibility is a state to model explicitly in the product, not an edge case hidden inside the payment provider dashboard.
Common questions
- How should a marketplace split a buyer payment?
- Treat the buyer charge as one event that creates several ledger entries. Record the seller’s earnings, the platform commission, processor fees and any balance waiting for payout. Avoid modelling the platform as a casual holder of everyone’s money unless your payment setup and regulatory position actually support that.
- What must be verified before paying a seller?
- The required checks commonly include the seller’s legal identity, business information, address, tax details, bank account ownership and sanctions screening. For some businesses, beneficial owners also need verification. If the seller is not fully verified, your product should show that payouts are blocked or pending rather than treating it as an operational surprise.
- Why is seller KYC part of payment design?
- KYC is not just back-office paperwork. Payment providers use it to prevent unlawful payouts, fraud, money laundering and sanctions breaches. That means verification status affects the live payment flow: buyers may be able to pay while the seller still cannot receive funds. Your system needs to model that state explicitly.
Short definition: what is Splits, Commissions & Seller KYC?