For payments created using direct charges, which account's balance is debited for disputes?

When a payment is created using direct charges in the Stripe ecosystem, disputes (or chargebacks) are debited directly from the connected account's balance. This framework ensures that the financial implications of a dispute are appropriately managed by the account that processed the transaction, reinforcing compliance and accountability within the platform's architecture.

Connected accounts are essentially the merchant accounts under a platform account, and they handle their own funds and transactions. When a charge is disputed, it is the connected account that is responsible for the resulting fees and impacts on funds. This reflects Stripe’s model where the connected account retains the majority of control and responsibility over its transactions, including any disputes that may arise from them.

Understanding this mechanism is crucial for effective financial and operational management as it ensures proper allocation of risks and responsibilities between platforms and their connected accounts.