Payment Architecture
for OneSummer

Strategic Overview

OneSummer is free for parents — always. This is a deliberate strategic choice: eliminating friction on the demand side maximizes application volume, which is the core value proposition the platform sells to camps. Monetization lives entirely on the supply side (camps) and within the transaction itself.

The fundamental architectural implication of this model is that OneSummer must function as a payment marketplace, not a simple payment processor. Money flows from parent to platform and then from platform to camp. This two-sided flow requires infrastructure built specifically for marketplace payouts — most notably Stripe Connect or an equivalent.

Core Principles

• Free for parents, forever. No paywall, no subscription, no hidden fee on the parent booking flow beyond the disclosed booking convenience fee.
• Camps are the merchants of record. The camp sets the tuition price. OneSummer facilitates but does not own the transaction.
• Platform takes a cut before camps are paid. The take rate is deducted at the time of payout — camps see net proceeds, not gross.
• Refund policy is camp-defined, not platform-defined. OneSummer enforces the camp's stated policy; the platform does not absorb refund risk.

Revenue Model

OneSummer has four near-term revenue streams, with two additional future streams. All streams are camp-side or transaction-side — never parent-side in a way that increases the cost of applying.

Unit Economics at Scale

At a hypothetical 10,000 bookings per season with average tuition of $2,000 and a 12% take rate:

Revenue Stream Maturity

Marketplace Payment Model

The defining capability of the OneSummer payment stack is split payments with connected accounts. Unlike a standard merchant accepting payment for its own goods, OneSummer must accept payment on behalf of third-party merchants (camps) and route net proceeds to them after deducting the platform fee.

Why Standard Stripe Checkout Is Insufficient

A standard Stripe integration would collect 100% of tuition into OneSummer's bank account, then require the platform to manually wire or ACH money to each camp. This is:

• Operationally unsustainable at scale (manual reconciliation for every camp payout).
• A potential money transmitter liability (holding funds on behalf of third parties without a money transmitter license in many states).
• A trust problem for camps (no programmatic guarantee of payout timing).

Required Capabilities

Processor Recommendation

Three processors offer first-class marketplace / platform payment capabilities at the scale OneSummer needs for launch. The recommendation is Stripe Connect.

Stripe Connect Account Types

Payment Flow Diagrams

Flow A — Standard Tuition Payment

The primary flow: a parent pays tuition for a confirmed camp session. Money moves from parent's card through Stripe's systems, with OneSummer's take rate deducted at source and net proceeds routed to the camp's connected account.

Flow B — Parent Booking Fee (Separate Charge)

The booking fee is charged to the parent as a separate, non-refundable convenience fee at the point of application submission. It is not routed to the camp — it goes directly to the OneSummer platform account.

Flow C — Full Session Application-to-Payout Timeline

Flow D — Refund Flow

Camp Onboarding & KYC

Before a camp can receive payouts, it must complete identity and business verification via Stripe Connect's onboarding flow. This is a regulatory requirement (Bank Secrecy Act / USA PATRIOT Act) and Stripe's own terms. OneSummer does not need to build this — Stripe provides a hosted onboarding link.

Onboarding Steps

KYC Requirements by Entity Type

Take Rate Implementation

The take rate is implemented via Stripe Connect's application_fee_amount parameter on the PaymentIntent. This is the cleanest technical implementation: the fee is defined in cents at the time of charge creation, Stripe atomically routes it to the platform account, and it appears as a separate line item on Stripe's reporting dashboard.

Stripe API Implementation

const paymentIntent = await stripe.paymentIntents.create({
  amount: 200000,             // $2,000.00 in cents
  currency: 'usd',
  payment_method_types: ['card'],
  application_fee_amount: 24000, // $240.00 = 12% take rate
  transfer_data: {
    destination: 'acct_camp_connected_account_id',
  },
  metadata: {
    camp_id: 'camp_abc123',
    application_id: 'app_xyz789',
    session: '2026-summer-wk2',
    take_rate_bps: 1200,        // 12% = 1200 basis points
  }
});

Take Rate Tiers

The take rate can vary by camp tier (linked to their listing subscription) and by volume. Higher-paying camps get a lower take rate as a negotiated incentive.

Parent Booking Fee

The parent booking fee is a separate, standalone charge that funds the platform for the cost of processing applications — regardless of whether the camp accepts the applicant. It is not a deposit on tuition. It is a non-refundable convenience and processing fee.

Pricing and Positioning

UX Disclosure Requirements

The booking fee must be presented clearly at multiple points in the flow. Failure to disclose upfront is a regulatory and reputational risk (CFPB junk fee scrutiny, app store review policies).

• Camp detail page: Small disclosure: "Applications processed through OneSummer include a $4.99 processing fee."
• Application checkout screen: Explicit line item before payment confirmation — fee cannot be hidden in fine print.
• Email receipt: Both the booking fee and tuition (if charged simultaneously) itemized separately.
• Refund policy display: Explicitly state "Application processing fees are non-refundable."

Technical Implementation

The booking fee is a separate PaymentIntent with no transfer_data or application_fee_amount. It routes entirely to the OneSummer platform account.

const bookingFee = await stripe.paymentIntents.create({
  amount: 499,               // $4.99 in cents
  currency: 'usd',
  payment_method_types: ['card'],
  // No transfer_data — stays in platform account
  description: 'OneSummer Application Processing Fee',
  metadata: {
    fee_type: 'booking_fee',
    application_id: 'app_xyz789',
    camp_id: 'camp_abc123',
    refundable: 'false',
  }
});

Refund & Cancellation Policy

OneSummer does not own the refund policy. Camps set their own cancellation and refund terms — the platform enforces and automates them. This is both a product principle (camps retain tuition ownership) and a liability management strategy (platform is not responsible for camp closures, session cancellations, or waitlist outcomes).

Policy Architecture

Each camp configures a refund policy at the listing level. The platform offers a set of configurable policy templates plus a custom option:

Example: Flexible Policy Timeline

Platform-Level Protections

• Booking fee is always non-refundable (parent-initiated cancellations).
• Chargebacks are disputed on behalf of the camp. Chargeback disputes reference the camp's stated refund policy.
• OneSummer does not guarantee refund outcomes in chargeback scenarios — the camp's connected account bears the liability.
• Platform maintains a small operational reserve (see Risk section) to cover edge case refund scenarios.

Tax & Compliance

The tax treatment of OneSummer transactions turns on a single principle: camps are the merchants of record, not OneSummer. OneSummer is a payment facilitator and marketplace — it does not sell camp sessions; it enables camps to sell sessions to parents.

Merchant of Record Implications

Sales Tax on Camp Tuition

Camp tuition is generally not subject to sales tax in most US states because overnight camps and educational programs qualify for exemptions. However, this is not universal:

1099 Reporting for Camps

IRS regulations require payment platforms (payment settlement entities) to issue Form 1099-K to sellers who receive payments above the reporting threshold. As of 2024, the threshold is $5,000 (transitional threshold; eventually moving to $600 under the American Rescue Plan). OneSummer must file 1099-Ks for qualifying camps.

Filing Mechanics

1099-K Thresholds Reference

Camp Pricing Tiers

The following is the camp-facing monetization structure. Camps choose a listing tier that determines their visibility, features, and transaction take rate. All tiers include free application processing for parents.

Add-On: Featured Listing Boosts

Camps on any paid tier can purchase time-limited placement boosts:

Future Capabilities

Buy Now, Pay Later (BNPL) for Parents

Summer camp tuition is a high-ticket item — often $1,500–$8,000+ for multi-week overnight programs. BNPL meaningfully expands the addressable market by making these amounts accessible to families who budget monthly. This is a Season 2 feature due to integration complexity and regulatory considerations.

Early Payout for Camps

Camps often have significant upfront costs (staff hiring, facility prep) months before the season starts. Early payout allows camps to access their earned deposits before standard T+2 settlement.

Risk & Open Questions

Key Risks

Open Questions for Legal / Finance Review

• Should first-season camp payouts be held in escrow until session begins? (Consumer protection vs. camp cash flow tension)
• Is the parent booking fee a "junk fee" under current CFPB guidance? Does it need to be included in the advertised tuition price?
• Which states require summer camp deposits to be held in trust accounts? (New York has specific camp deposit laws.)
• Does the 501(c)(3) exemption from 1099-K apply to all nonprofit camps, or only those with no unrelated business income from the sessions?
• At what GMV level should OneSummer engage a dedicated payments counsel and begin evaluating a proprietary money transmitter license?
• For BNPL: does offering parent financing require OneSummer to register as a credit service organization or credit broker in any state?