Stripe vs Paddle for SaaS: Which Should You Choose?

Most SaaS teams are not just choosing a payments API. You are choosing between being the merchant of record or outsourcing tax and compliance. That choice changes your time to launch, your legal exposure, and your margins.

TL;DR

• •Choose Paddle if you want to sell globally without tax overhead.
• •Choose Stripe if you want full control, lower fees at scale, or marketplace features.

Merchant of record in plain English

Stripe is a payment processor. You are the merchant. That means you own tax calculation, compliance, invoicing, and chargeback handling. Paddle is a merchant of record. They are the merchant. That means they handle tax compliance and most of the operational burden of selling software globally.

What you handle with Stripe

• •Registering for VAT, GST, and sales tax in multiple regions
• •Tax calculation and compliance tooling
• •Invoices and receipts under your legal entity
• •Chargebacks and dispute workflows
• •Local payment method coverage

What Paddle handles for you

• •Tax registrations and filings
• •Tax calculations and compliant invoices
• •Merchant of record liability
• •Local payment methods where supported
• •A simpler compliance surface area

Cost drivers that actually matter

Stripe can be cheaper per transaction, but you pay for tax tooling, accounting, and time. Paddle bundles those costs into the fee. Stripe usually wins on fee percentage at high volume. Paddle usually wins on total cost of ownership for small teams selling globally.

When Stripe wins

• ✅You sell in one country or already have global tax infrastructure
• ✅You need marketplace or platform payments
• ✅You want full control over checkout and branding
• ✅You have finance and legal support

When Paddle wins

• ✅You want to sell globally this month
• ✅You do not want to manage tax compliance
• ✅You are a solo founder or small team
• ✅You want a simple checkout and subscription flow

What about Lemon Squeezy?

Lemon Squeezy is another merchant of record option with a modern UI and strong digital product support. It can be a great fit if you sell downloads or licenses and want something lighter than Paddle. For global SaaS at scale, Paddle is still more mature.

Decision matrix

Implementation checklist

1. Decide where you will sell in the next 12 months.
2. Pick hosted checkout or embedded checkout.
3. Implement webhooks for subscriptions and lifecycle events.
4. Build dunning and retry logic for failed payments.
5. Test refunds, chargebacks, and cancellations before launch.

Final recommendation

If you are early stage or selling globally, start with Paddle. Switch to Stripe when fees materially impact margin or you need advanced payment workflows. Most teams that truly need Stripe already know why.

Last updated: February 2026