Why Stripe Connect matters for contractors
When a software platform processes customer payments, there are two ways to handle the money:
- Shared merchant account (pooled): The platform owns one Stripe account. All customer payments land there. The platform then pays each contractor on a delay (often weekly or monthly), minus its fee.
- Stripe Connect (contractor-owned): Each contractor connects their own Stripe account. Customer payments land directly in the contractor's account from the moment of payment. The platform takes a small fee, but the rest belongs to the contractor immediately.
For high-ticket home services like permanent lighting — where deposits are $2,000–$7,500 and installers need cash flow to order materials — Stripe Connect is significantly cleaner than pooled merchant accounts.
What contractors get with Stripe Connect
- Direct payment to their own account. No waiting for the platform to pay out.
- Real-time visibility into balance. The contractor sees what's pending and what's paid out at any time inside their own Stripe dashboard.
- Clean tax reporting. Stripe generates 1099-K forms based on what landed in the contractor's account.
- Chargeback protection. Disputes are handled through Stripe's standard processes, with the contractor having access to the same dispute tools any Stripe merchant would have.
- Refund control. The contractor can refund a deposit directly from their Stripe dashboard.
How Light Launch uses Stripe Connect
- During onboarding, the installer connects their own Stripe account (or creates one if they don't have one yet). Takes a few minutes.
- When a homeowner pays a deposit through the Light Launch customer portal, the charge runs through Stripe Connect.
- Funds land in the installer's Stripe account immediately, minus a small platform fee that Light Launch takes for facilitating the transaction.
- The installer's bank receives the deposit on their normal Stripe payout schedule (default: every 2 business days).
- Refunds, chargebacks, and reporting all flow through the installer's own Stripe dashboard.
What contractors need to set up Stripe Connect
- A business EIN (or SSN if operating as a sole proprietor).
- A bank account for payouts.
- Basic business info (legal name, address, business type).
If you don't have a Stripe account yet, Light Launch walks you through creating one as part of onboarding. If you do, you connect your existing account in a few clicks.
Common questions about Stripe Connect
What's the platform fee? Light Launch's platform fee on Connect transactions is small (in the low-single-digit percent range) and is clearly disclosed during signup. It covers payment processing and the platform infrastructure that handles the customer portal, deposit flow, and CRM updates.
Can I refund a deposit? Yes. Refunds flow through the installer's own Stripe dashboard — same as any other Stripe merchant.
What happens if there's a chargeback? Standard Stripe chargeback flow. The installer responds to the dispute through their Stripe dashboard with documentation (signed contract, install photos, etc.).
Get paid directly, instantly, on your own Stripe account.
Free account, Stripe Connect set up in a few minutes. Every homeowner deposit lands in your own bank.
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