What is the main purpose of using separate charges and transfers in Stripe Connect?

The main purpose of using separate charges and transfers in Stripe Connect is to create charges on the platform account on behalf of connected accounts. This approach allows platforms to retain control over the payment process while ensuring that funds are routed appropriately to connected accounts.

By creating a charge on the platform's account, the platform can manage the transaction lifecycle, including payment processing, risk assessment, and output reporting. Following the charge, a separate transfer is initiated to move the funds to the connected account, allowing for flexibility in configuring how much of the charge goes to the connected account and how much is retained by the platform.

This separation maintains compliance with payment regulations while also providing detailed control over fund distribution. It helps in strategically managing fees, revenue sharing, and payouts without combining all transactions into a single point of execution. The focus on distinct charges and transfers makes the entire transaction system more robust and easier to monitor, improving the overall payment experience for all parties involved.