Title: Understand its limitations
Last modified: February 7, 2026

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# Understand its limitations

 *  [markfme](https://wordpress.org/support/users/markfme/)
 * (@markfme)
 * [2 months, 1 week ago](https://wordpress.org/support/topic/understand-its-limitations/)
 * If you want to sell in Europe you need 3DS2 and to avoid being caught by the 
   UK Employment Rights Act s36 – so you need your vendors to be the Merchant of
   Record. That means you cannot use Separate Charges and Transfers – because that
   makes you, the platform, the Merchant of Record.
   Instead you need to use Stripe’s
   Direct Charges model.Dokan will not do that.Dokan ‘senior engineers’ will do 
   everything they can to avoid telling you this – which either means they don’t
   understand their own software, or that they’ve more interested in sales than 
   in helping you.But eventually, if you waste enough of your time and theirs, they
   will say.Dokan cannot support BOTH direct charges and 3DS2.Which makes it unfit
   for selling from the UK (unless you want to take a huge regulatory risk!) and
   much of Europe – and likely other jurisdictions as their rules ‘catch up’.
 * In the context of the **Employment Rights Act 2025 (ERA 2025)** and its “Section
   36” expansion, the choice between Stripe’s payment models is no longer just a
   technical or financial decision—it is a **regulatory one**.
 * Section 36 essentially states that if a platform “participates in the arrangements”
   for labor (services), it can be classified as an **Employment Business**. Your
   payment flow is one of the most visible “fingerprints” of that participation.
 * 1. Separate Charges and Transfers (SCT)
 * _The “Control” Model_
 * In this flow, the customer pays your platform directly. You then “transfer” a
   portion of that money to the vendor/worker later.
    - **How it works:** You are the **Merchant of Record**. The money lands in your
      Stripe balance first, and you trigger the transfer to the vendor (often via`
      transfer_group`).
    - **ERA 2025 Risk:****HIGH.**
       * **Indicative of Control:** By holding the funds, you are seen as the “paymaster.”
         Section 36 specifically looks at platforms that handle the financial transaction
         as evidence of being an employment business.
       * **VAT Liability:** In many service sectors, this model forces the platform
         to be the “deemed supplier,” meaning you must account for 20% VAT on the
         _full_ transaction, not just your commission.
 *  -  This topic was modified 2 months, 1 week ago by [markfme](https://wordpress.org/support/users/markfme/).

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 * Last reply from: [markfme](https://wordpress.org/support/users/markfme/)
 * Last activity: [2 months, 1 week ago](https://wordpress.org/support/topic/understand-its-limitations/)