In Express Connected Accounts, who is liable for negative balances and losses?

In Express Connected Accounts, who is liable for negative balances and losses?

• A. The platform
• B. Stripe
• C. The connected account
• D. The customer

Answer: (A)

In Express Connected Accounts, liability for negative balances and losses falls on the platform because the platform is the merchant of record and controls the flow of funds. When a connected account has a negative balance—such as after refunds, chargebacks, or other adjustments—the shortfall must be covered by the platform since the platform is responsible for handling payouts to the connected account and for the overall funding of those transactions. Stripe processes payments, but the responsibility for funding deficits rests with the platform that owns the Connect balance and contracts with customers.

In Express Connected Accounts, liability for negative balances and losses falls on the platform because the platform is the merchant of record and controls the flow of funds. When a connected account has a negative balance—such as after refunds, chargebacks, or other adjustments—the shortfall must be covered by the platform since the platform is responsible for handling payouts to the connected account and for the overall funding of those transactions. Stripe processes payments, but the responsibility for funding deficits rests with the platform that owns the Connect balance and contracts with customers.