Paddle alternatives in 2026

Paddle's 5% + $0.50 Merchant-of-Record fee buys you global tax compliance. That trade gets expensive fast. Here's when to stay, when to switch to Stripe, and what the real cost looks like at every stage.

Pricing checked June 2026 · Last updated June 15, 2026

Merchant of Record vs. direct PSP — the only decision that matters

A Merchant of Record (MoR) like Paddle, Lemon Squeezy, Polar, or FastSpring becomes the legal seller of your product. They collect VAT and sales tax everywhere on earth, remit it, and hand you a clean payout. You hand them ~5%.

A direct payment processor like Stripe charges ~2.9% + $0.30 and gives you the money. You are the seller of record. Crossing a sales-tax threshold in Germany, Texas, Australia, or one of 40+ US states means registering, filing, and remitting in each. Most teams pay Stripe Tax (+0.5%), an accountant, or both.

Total cost of ownership by revenue stage

Modeled on typical SaaS mixes. Stripe column assumes Stripe Tax (+0.5%) so the comparison is apples-to-apples on compliance.

MRR	Txns/mo	Paddle	Stripe + Tax	Monthly savings	Annual savings
$1,000	50	$75	$49	$26	$312
$10,000	400	$700	$460	$240	$2880
$50,000	1,500	$3250	$2150	$1100	$13200
$250,000	6,000	$15500	$10300	$5200	$62400

Break-even rule of thumb: Stripe + Stripe Tax saves ~2% of revenue vs. Paddle. If a fractional accountant or compliance tool costs less than that 2%, switch. Below roughly $8k–$10k MRR, the compliance overhead usually eats the savings — stay on Paddle.

The five real options

Paddle

Merchant of Record

Fees: 5% + $0.50 per transaction (digital products)
Setup: Minutes — checkout, subscriptions, invoicing included
Tax handling: Paddle is the seller of record. They collect & remit global sales tax / VAT.
Best for: Solo founders & small SaaS selling globally who do not want to touch tax compliance.
Caveat: Higher per-transaction cost. Less flexibility in checkout UX vs. Stripe Elements.

Lemon Squeezy

Merchant of Record

Fees: 5% + $0.50 per transaction
Setup: Minutes — hosted checkout, license keys, affiliates built in
Tax handling: Lemon Squeezy is the seller of record. Global sales tax / VAT handled for you.
Best for: Indie hackers selling digital downloads, licenses, or low-volume SaaS.
Caveat: Same headline rate as Paddle; fewer enterprise features (SCA edge cases, complex tax docs).

Stripe (direct)

Direct PSP

Fees: 2.9% + $0.30 per transaction (US cards)
Setup: Hours-to-days — you build checkout, subs, invoices
Tax handling: You are the seller of record. Add Stripe Tax (+0.5% on taxed txns) or your own compliance stack.
Best for: Companies with $100k+ ARR where 2–3 points of margin pays for tax tooling and an accountant.
Caveat: You register for VAT/sales tax in every jurisdiction you cross a threshold. Real legal and ops overhead.

Polar

Merchant of Record

Fees: 4% + $0.40 per transaction
Setup: Minutes — developer-first MoR built on Stripe
Tax handling: Polar is the seller of record. Handles global tax.
Best for: Developer tools and open-source maintainers who want a lower-fee MoR.
Caveat: Newer, smaller catalog of integrations than Paddle/LemonSqueezy.

FastSpring

Merchant of Record

Fees: Custom (typ. 5.9% + $0.95, negotiable at volume)
Setup: Days — sales-led onboarding
Tax handling: FastSpring is the seller of record. Global tax included.
Best for: Established SaaS/desktop software businesses doing $1M+ ARR who want to negotiate rates.
Caveat: Opaque pricing. Sales call required. Overkill for indie scale.

Our recommendation by stage

$0–$10k MRR: Stay on Paddle or Lemon Squeezy. The 2% premium is cheaper than your time.
$10k–$50k MRR: Evaluate Polar (4%) or move to Stripe + Stripe Tax + a part-time accountant.
$50k+ MRR: Stripe direct, Stripe Tax, and a finance lead. You'll save $10k+/year vs. any MoR.
$1M+ ARR: Negotiate FastSpring or run Stripe with a dedicated compliance stack (Anrok, Numeral, or in-house).

Common gotchas when leaving Paddle

Existing subscriptions don't migrate automatically. Paddle holds the card-on-file. You'll need to re-collect payment methods.
Backdated tax registration. If you've been past a threshold without filing, you may owe back taxes once you become the seller of record.
Chargebacks. MoRs absorb most disputes; on Stripe, every chargeback is $15 plus your time.
Invoicing in EU. EU B2B customers expect VAT-compliant invoices with your VAT ID. Stripe Tax handles this; raw Stripe does not.

Prices change often — verify on the vendor's site before switching.