Stripe vs Paddle
Stripe and Paddle solve the same problem from opposite directions. Stripe gives you the best payment API and leaves sales tax and VAT compliance to you. Paddle charges more per transaction but becomes the legal seller and handles tax in every country automatically. Pick Stripe if you want full control and are comfortable with tax compliance yourself. Pick Paddle if you are selling globally as a solo founder and do not want to register for VAT in dozens of countries.
Two products, side by side.
Payment processor with the best API and ecosystem, you are the merchant of record
- Best-in-class API, docs, and developer ecosystem
- Supports the widest range of payment methods and currencies
- Flexible custom billing logic (Stripe Billing)
- Full control over the checkout experience
- Massive community, most third-party integrations built for it first
- You are the merchant of record: sales tax and VAT compliance is your responsibility
- Stripe Tax (automated tax handling) is a separate paid add-on
- Chargeback and fraud risk sits with you
- Selling globally means registering for tax in each jurisdiction yourself
Merchant of Record: Paddle becomes the legal seller and handles tax for you
- Merchant of Record: Paddle collects and remits sales tax/VAT in every country automatically
- One flat rate, no separate tax product to configure
- Built-in checkout, subscriptions, dunning, and localized pricing
- No VAT registration paperwork for you to file
- Good fit for a solo founder selling globally from day one
- Higher all-in take rate than Stripe's base processing fee
- Less flexibility for complex, custom billing logic
- Smaller third-party integration ecosystem
- Less control over the exact checkout UI
Stripe vs Paddle on the specs.
| Feature | Stripe | Paddle |
|---|---|---|
| Merchant of record | No, you are the seller | ✓Yes, Paddle is the seller |
| Sales tax / VAT handling | Manual, or Stripe Tax (paid add-on) | ✓Included, handled automatically |
| Take rate | ✓2.9% + 30¢ (US card, base rate) | ~5% + 50¢, all-inclusive |
| Subscription billing | Built in (Stripe Billing) | Built in |
| Global payment methods | ✓Extensive, 135+ currencies | Good, narrower than Stripe |
| Checkout customization | ✓Full control (Elements, custom UI) | Templated, less flexible |
| Chargeback handling | Your responsibility | ✓Paddle handles it |
| Setup for global sales | High effort, tax registration needed | ✓Low effort, Paddle is the seller |
| Developer ecosystem | ✓Massive | Smaller but solid |
What you will actually pay.
| Tier | Stripe | Paddle |
|---|---|---|
| Standard | 2.9% + 30¢ per transaction (US) | ~5% + 50¢ per transaction, all-inclusive |
| Tax handling | Stripe Tax: ~0.5% additional per transaction | Included in the standard rate |
| International | Varies by country, typically +1% for international cards | Same flat rate globally |
Which one should you pick?
You want full control over checkout and billing logic, you are comfortable handling sales tax and VAT yourself (or paying separately for Stripe Tax), or you already depend on Stripe-specific integrations.
You are a solo founder or small team selling a SaaS product globally and do not want to think about VAT registrations, or you want one predictable rate instead of assembling tax compliance yourself.
For a US-only SaaS with simple monthly subscriptions and no international customers yet, either works, and Stripe will usually come out cheaper. The moment EU or UK customers start showing up, Paddle's merchant-of-record model starts paying for itself in saved compliance work.
Related matchups.
Common questions.
What is a merchant of record and why does it matter?
A merchant of record is the legal entity that sells to your customer and is responsible for collecting and remitting sales tax and VAT. With Stripe, that entity is you. With Paddle, that entity is Paddle, which is why Paddle can handle tax compliance in every country you sell to, at the cost of a higher take rate.
Is Paddle more expensive than Stripe?
On paper, yes, Paddle's all-in rate (roughly 5% plus 50 cents) is higher than Stripe's base rate (2.9% plus 30 cents). But Stripe's rate does not include tax handling, once you add Stripe Tax and the time cost of managing VAT registrations yourself, the real gap narrows considerably for a SaaS with international customers.
Can I switch from Stripe to Paddle later?
Yes, but it means migrating subscription billing and customer payment methods, which is disruptive to existing customers. Most founders decide upfront based on whether they expect meaningful international sales in the first year.
Which one is better for a US-only SaaS?
Stripe, in most cases. Without international VAT complexity to manage, Stripe's lower base rate and more flexible billing tools are the better fit. Revisit the decision if you start getting meaningful traction outside the US.
Does Paddle support one-time purchases, or only subscriptions?
Both. Paddle supports one-time purchases, recurring subscriptions, and usage-based billing, similar in scope to Stripe, just wrapped inside the merchant-of-record model.
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