In which scenario would Stripe hold responsibility for a negative balance?

In which scenario would Stripe hold responsibility for a negative balance?

• A. The negative balance is on a standard connected account
• B. The account was created with Stripe managed risk
• C. Both A & B
• D. Neither

Answer: (A)

Understanding who bears liability for a negative balance in Stripe Connect helps you see why this scenario is the best fit. A negative balance happens when outflows (like refunds or chargebacks) exceed the funds available in an account, creating a shortfall that must be covered somehow. In Stripe Connect, liability for that shortfall depends on how the connected account is set up and how risk is managed. For a standard connected account, Stripe handles the flow of funds and the associated settlement risks. If a negative balance arises, Stripe is the entity that ultimately covers the shortfall to keep payouts and settlements in motion. That means Stripe bears responsibility in this scenario. If an account is created with Stripe Managed Risk, the risk and some losses are structured differently, often shifting more of the responsibility towardStripe’s risk framework or toward the platform depending on the exact arrangement. In that setup, the negative balance isn’t automatically handled in the same way as with a standard connected account, so it isn’t the scenario where Stripe would unambiguously hold the responsibility. So the best-fit scenario for Stripe taking responsibility for a negative balance is when the negative balance sits on a standard connected account.

Understanding who bears liability for a negative balance in Stripe Connect helps you see why this scenario is the best fit. A negative balance happens when outflows (like refunds or chargebacks) exceed the funds available in an account, creating a shortfall that must be covered somehow. In Stripe Connect, liability for that shortfall depends on how the connected account is set up and how risk is managed.

For a standard connected account, Stripe handles the flow of funds and the associated settlement risks. If a negative balance arises, Stripe is the entity that ultimately covers the shortfall to keep payouts and settlements in motion. That means Stripe bears responsibility in this scenario.

If an account is created with Stripe Managed Risk, the risk and some losses are structured differently, often shifting more of the responsibility towardStripe’s risk framework or toward the platform depending on the exact arrangement. In that setup, the negative balance isn’t automatically handled in the same way as with a standard connected account, so it isn’t the scenario where Stripe would unambiguously hold the responsibility.

So the best-fit scenario for Stripe taking responsibility for a negative balance is when the negative balance sits on a standard connected account.