Choose Stripe if it is available in your country and you are prepared to handle sales tax and VAT yourself. Choose Paddle or Lemon Squeezy if you want someone else to be the legal seller of your product and deal with tax in every country for you, at about 5% plus 50 cents a sale. The headline fees matter less than that one question: who is the merchant of record?
Most comparisons line up the percentages and stop there. That misses the part that actually costs a solo founder time, which is tax registration in countries you have never been to. This post covers that, what each option costs at the small prices indie products charge, who can open an account at all, and where Lemon Squeezy stands now that Stripe owns it.
The real difference: who is the merchant of record
When you sell through Stripe, you are the seller. Stripe moves the money, but the sale is between your business and the customer, and so is the tax obligation that comes with it.
When you sell through Paddle or Lemon Squeezy, they are the seller. They are the merchant of record: legally, they buy the right to sell your product and resell it to the customer. The receipt carries their name, they work out and charge the sales tax or VAT, and they file and pay it.
That matters more than it sounds. Digital products are taxed where the customer is, not where you are. In the EU, for example, a seller based outside the EU owes VAT on digital sales to consumers from the first sale, with no minimum. One customer in Finland is enough to create the obligation. A merchant of record takes that off your desk entirely.
What each one costs at small scale
These are the public list prices, checked in October 2026. All three negotiate at volume, which is not the situation this post is about.
| Stripe (you are the seller) | Paddle | Lemon Squeezy | |
|---|---|---|---|
| Per transaction | 2.9% + 30¢ (US domestic cards) | 5% + 50¢ | 5% + 50¢ |
| International cards | +1.5%, +1% if currency is converted | No surcharge listed | "May encounter small additional fees" |
| Subscriptions | Billing: +0.7% of billed volume | No separate fee listed | No separate fee listed |
| Tax calculation | Stripe Tax: +0.5% per transaction (no-code) | Included, and they file | Included, and they file |
| Monthly fee | None on pay-as-you-go | None | None |
Sources: Stripe pricing, Paddle pricing, Lemon Squeezy pricing. Stripe's page shows your own country's rates, so check what it shows you.
Run it on a real price
Say you charge $10 a month, the customer is in the US, and the card is domestic.
- Stripe with Billing and Stripe Tax: 59¢ + 7¢ + 5¢ = about 71¢, or 7%. Registering and filing is still yours.
- Paddle or Lemon Squeezy: 50¢ + 50¢ = $1.00, or 10%. Tax handled.
At $5 a month the fixed 50¢ starts to bite: $5 at 5% + 50¢ is 75¢, which is 15% of the sale. Paddle's pricing page says to contact them about products under $10. If your price is low, the fixed part of the fee matters more than the percentage, and that is a pricing decision as much as a payments one. How to price a SaaS as a solo founder goes into that.
At $50 a month the gap is the other way round in practice: the percentages dominate, and the question is simply whether 3 points of margin is worth not thinking about tax.
Stripe now has its own merchant of record
Stripe sells a merchant of record service of its own called Managed Payments. It makes Stripe the legal seller and handles sales tax, VAT and GST in more than 80 countries, plus fraud, disputes and customer support for the transaction.
It costs 3.5% per successful transaction on top of standard processing fees, and subscriptions still need Stripe Billing. On the $10 example that is roughly 59¢ + 35¢ + 7¢, so about $1.01: the same ballpark as Paddle and Lemon Squeezy.
The limits are worth reading before you plan around it:
- It only works with Stripe Checkout and Payment Links, not custom payment forms built with Elements.
- It is for digital products only: software, SaaS, games, digital media, online courses. Professional services such as consulting, design or development are explicitly excluded.
- Your business has to be in a supported location. In October 2026 that list covered the US, Canada, most of Europe including the UK, Australia, Hong Kong, Japan and Singapore.
Can you even open the account?
For a lot of indie makers this decides it before fees come into it.
Stripe lists the countries where it supports businesses on its global availability page. In October 2026, Pakistan and Turkey were not on it, and India was marked "Preview" with a link to contact sales. If you are based somewhere Stripe does not support, the comparison is over.
Lemon Squeezy pays out by bank transfer to a listed set of countries (Pakistan, India and Turkey were on it when checked) and by PayPal to many more. Its own docs note that Indian merchants without an approved Stripe account have to use PayPal for payouts.
Paddle says it works with software businesses anywhere except a list of sanctioned or restricted countries.
Where Lemon Squeezy stands now
Stripe acquired Lemon Squeezy in July 2024. In January 2026 the Lemon Squeezy team published an update saying their goal is to give Lemon Squeezy users an easy way to migrate to Stripe Managed Payments.
What that post does not say is just as important: no shutdown date, and no statement about existing stores. So Lemon Squeezy works today, takes payments today, and is clearly not where the investment is going. If you choose it, do it knowing a migration is likely at some point, and keep the parts you control portable: your own customer list, your own record of who is on which plan, and prices you could recreate somewhere else in an afternoon.
You can see it listed with Gumroad and the others in the business tools category, alongside its product page.
How to choose
| Your situation | Start with |
|---|---|
| Stripe works in your country and you sell mostly at home | Stripe, with Stripe Tax when you need it |
| You sell a digital product worldwide and never want to think about VAT | Paddle or Lemon Squeezy, or Stripe Managed Payments if you are eligible |
| Stripe is not available where you live | Paddle, or Lemon Squeezy with PayPal payouts |
| You sell a service, not a product | Stripe or plain invoices: merchant of record services exclude it |
| Your price is under about $5 | Check the fixed fee first, on all of them |
| It is an iOS or Android app selling in-app | Apple and Google handle that payment, not any of these |
That last row deserves its own post: in-app purchases go through the stores, and tools like RevenueCat sit on top of them. RevenueCat and Superwall: what each one actually does covers it.
Whichever you pick, the decision is not permanent. Switching payment providers is a week of tedious work and some customer emails, not a rewrite. Pick the one that lets you launch this month, and revisit it when the fees are a number worth an afternoon of your time.