Building a three-sided marketplace payment system with Stripe Connect
How we designed a payment architecture that distributed funds to three beneficiaries per transaction while retaining platform fees
Industry:Wellness & Marketplace
Key results at a glance
The challenge
The Business Model
Spa Space operated a three-sided marketplace where:
- Wellness providers (therapists, practitioners) delivered services
- Venues (spas, hotels, wellness centres) hosted the services
- The platform connected them and handled bookings
Each booking generated revenue that needed to be distributed fairly among all three parties - a payment complexity that goes well beyond standard e-commerce.
The Payment Problem
Traditional payment systems are designed for two parties: buyer and seller. A three-sided marketplace breaks this model:
- Multiple beneficiaries per transaction
- Variable splits depending on service type and agreements
- Platform fee retention before distribution
- Booking-linked payments with deposits, balances, and refunds
- Compliance requirements for money transmission
The Complexity
- Each booking could involve different providers and venues with different fee structures
- Payments needed to match booking states (deposit at booking, balance after service)
- Cancellation and refund scenarios had to handle partial payments correctly
- Regulatory compliance required proper fund segregation
- The business model was still evolving, requiring flexibility in split configurations
The results
Key results
- Three-sided payment distribution automated through Stripe Connect
- Platform fee retention built into every transaction
- Booking lifecycle tightly integrated with payment state
- Compliant architecture using Stripe's regulated fund flows
- Configurable split calculations supporting evolving business terms
Payment Distribution
- Three beneficiaries supported per transaction
- Platform fees retained automatically at payment time
- Compliant fund flow through Stripe's regulated infrastructure
Operational Benefits
- Automated settlements - no manual payment processing
- Clear audit trail - every payment linked to a booking
- Reduced disputes - transparent split calculations
- Scalable model - could handle any volume without process changes
Business Flexibility
- Configurable splits - fee structures could be adjusted per provider or venue
- Multiple payment models - supported deposit + balance, full prepayment, and pay-on-arrival
- Refund handling - automated proportional refunds when bookings cancelled
The solution
Our Approach
We designed a payment architecture using Stripe Connect with separate connected accounts for providers and venues, enabling compliant multi-party payments with the platform as the orchestrator.
Connected Account Structure
Rather than aggregating funds centrally (which creates regulatory complexity), we used Stripe Connect's model:
- Platform account for overall orchestration and fee collection
- Provider accounts (Express) for therapist payouts
- Venue accounts (Express) for venue payouts
This structure meant funds flowed directly to recipients through Stripe's regulated infrastructure, reducing compliance burden on the platform.
Payment Flow Design
Customer Payment
|
v
Stripe Checkout
|
v
Platform Fee Retained (10-15%)
|
+--> Provider Account (service fee)
|
+--> Venue Account (venue fee)
The payment was split at the point of transaction using Stripe's transfer_data and application_fee_amount parameters, ensuring clean fund segregation.
Booking-Linked Settlement
Payments were tightly integrated with booking state:
- Booking created - Payment intent created with calculated splits
- Customer pays deposit - Partial capture, funds held
- Service completed - Final balance captured and settled
- Booking cancelled - Appropriate refunds issued to correct parties
Implementation Details
- Dynamic split calculation based on service type, provider agreement, and venue terms
- Idempotency to prevent duplicate charges on retries
- Webhook handling for Stripe events (payment succeeded, failed, disputed)
- Reconciliation to match Stripe transactions to booking records
- Payout scheduling aligned with business cash flow requirements
Technical deep dive
Why Stripe Connect?
Several options exist for marketplace payments, but Stripe Connect offered key advantages:
- Regulatory compliance - Stripe handles money transmission licensing
- Connected accounts - Direct relationships with recipients, not aggregated funds
- Flexible payouts - Platform controls payout timing
- Global reach - Supports international expansion
- Developer experience - Well-documented APIs and testing tools
Split Calculation Service
The split calculation was implemented as a dedicated service:
SplitCalculationService
- getProviderRate(providerId, serviceType)
- getVenueRate(venueId)
- getPlatformFee(bookingValue)
- calculateSplit(booking) -> { platform, provider, venue }
This separation meant business rules for splits could evolve independently of the payment integration.
Handling Edge Cases
The implementation addressed several complex scenarios:
Partial refunds: When a booking was partially refunded (e.g., service shortened), the refund was proportionally distributed based on original splits.
Disputes: Chargebacks were handled through Stripe's dispute process, with the platform retaining evidence of service delivery.
Failed payouts: If a connected account could not receive funds (e.g., verification incomplete), funds were held and retried automatically.
Multi-currency: While initial launch was UK-only (GBP), the architecture supported adding currencies for international expansion.
Webhook Reliability
Stripe webhooks were processed through a queue to ensure:
- At-least-once processing - failed handlers retried
- Ordering - events processed in sequence per booking
- Idempotency - duplicate events handled gracefully
Lessons Learned
- Test with Stripe's test mode extensively - edge cases in payments are expensive to discover in production
- Build reconciliation from day one - matching Stripe records to internal state saves debugging time
- Plan for disputes - have evidence collection built into the booking flow
- Consider payout timing - provider and venue cash flow expectations matter to business relationships
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