Stripe vs Paddle vs Lemon Squeezy — merchant of record, compared

Affiliate disclosure. Some services on this page are ones Wolfix refers customers to, and Wolfix may earn a commission when you sign up through a Wolfix referral link — at no extra cost to you. A service gets a link here only once its referral is live; the rest are named and compared without one. Commission does not decide what is covered: every service is reviewed with its downsides, and good options Wolfix earns nothing from are named too. It is not a ranking.

What is a merchant of record, and what is a subscription platform?

A merchant of record (MoR) is the company that legally sells your product to the customer. It charges the card, and it — not you — is responsible for calculating, collecting and paying sales tax and VAT in every country and state you sell into. You receive the proceeds minus its fee. A payment processor such as Stripe on its own only moves the money; the tax obligations stay with you.

A subscription platform for mobile apps is a different layer: it sits on top of Apple's and Google's in-app purchase systems, keeps track of who is subscribed across platforms, and gives you paywalls and analytics. The app stores are already the merchant of record for in-app purchases.

Where Wolfix raises it. The Operations department's sales tax and VAT readiness check applies when a scan sees you charging customers, and its recommendation names a merchant of record — or turning on your payment provider's tax product and registering where you owe tax — as the two ways to close it.

When you need one — and when you don't

You need a merchant of record now if you sell software or digital products to consumers in several countries, especially the EU and UK, and you do not want to register for VAT and file returns yourself.

You don't need one yet if you sell mainly to businesses in your own country, or your volume is small enough that your payment provider's tax tooling plus your own registration is simpler and cheaper. You need a subscription platform like RevenueCat if you sell subscriptions inside an iOS or Android app — for a web-only product it adds little.

The options, one by one

Two of these, Lemon Squeezy and RevenueCat, are services Wolfix refers customers to. Stripe, Paddle and Polar are not Wolfix partners and are included because a fair comparison needs them. Lemon Squeezy, Paddle and Polar are merchants of record; Stripe is a payment processor that also sells a merchant-of-record service; RevenueCat manages in-app subscriptions and is not a payment processor at all.

Lemon Squeezy

What it is. A merchant of record for software and digital products — checkout, subscriptions, licence keys and global sales-tax handling. Stripe acquired Lemon Squeezy, and Lemon Squeezy's 2026 update says the team is now building Stripe Managed Payments (as of 2026-10-04, [S2]).

Pricing (as of 2026-10-04). 5% plus 50¢ per transaction, with no monthly fee [S1].

Pros

It is the merchant of record, so sales tax and VAT are calculated, collected and remitted for you (as of 2026-10-04, [S1]) — a compliance job you would otherwise run yourself in every country where you register.
No monthly fee; you pay only when you sell (as of 2026-10-04, [S1]).

Cons

5% plus 50¢ (as of 2026-10-04, [S1]) is noticeably more than a payment processor alone charges, and on a low-priced product the fixed 50¢ is a large share of each sale.
The product is in transition: its own 2026 update says slower support responses and less frequent product updates were the tradeoff while the team builds Stripe Managed Payments (as of 2026-10-04, [S2]), so a new integration may need to move again.

Who it suits. A solo founder or small team selling software to consumers internationally who wants tax handled rather than learned.

RevenueCat

What it is. An SDK and backend for in-app subscriptions on iOS, Android and the web: it wraps the app stores' purchase systems, tracks entitlements across platforms, and adds paywalls, experiments and subscription analytics.

Pricing (as of 2026-10-04). Free up to $2,500 in monthly tracked revenue (MTR), then 1% of the revenue it tracks [S3].

Pros

Free until $2,500 a month in tracked revenue (as of 2026-10-04, [S3]), so an app pays nothing while it is finding its market.
One subscriber record across iOS, Android and the web (as of 2026-10-04, [S3]).

Cons

It is not a merchant of record and does not process payments on the stores: Apple and Google still take their commission, and RevenueCat's 1% is charged on the revenue it tracks, measured before the platform's cut (as of 2026-10-04, [S3]), so you pay it on money you never receive.

Who it suits. A mobile app selling subscriptions through the App Store or Google Play, especially on both.

Stripe

Not a Wolfix partner. Named for comparison; Wolfix earns nothing from it.

What it is. A payment processor with subscription billing, tax calculation and, for digital products, a merchant-of-record service called Managed Payments [S4], [S7].

Pricing (as of 2026-10-04). Domestic cards are 2.9% + 30¢, plus 1.5% for international cards and 1% when currency conversion is needed [S4]. Billing adds 0.7% of billing volume on pay-as-you-go [S5]. Stripe Tax Complete, with registrations and filings, starts at $90 a month on a 1-year contract [S6].

Pros

Domestic cards cost 2.9% + 30¢ (as of 2026-10-04, [S4]), against 5% + 50¢ at Lemon Squeezy and Paddle (as of 2026-10-04, [S1], [S9]) — though those two also handle the tax.
Managed Payments makes Stripe the merchant of record for digital products in 80+ countries (as of 2026-10-04, [S7]), so you can start as the seller and switch later without changing processor.

Cons

Without Managed Payments you are the seller: Stripe Tax calculates the tax, but registering and filing is yours unless you pay for Tax Complete from $90 a month (as of 2026-10-04, [S6]).
Managed Payments requires an eligibility review and excludes services with human intervention, such as live coaching (as of 2026-10-04, [S8]), and it adds 3.5% per successful transaction on top of standard Stripe processing fees (as of 2026-10-04, [S7]), so check it before you plan around it.

Who it suits. A company that wants full control of payments and billing, or that will grow into handling its own tax registrations.

Paddle

Not a Wolfix partner. Named for comparison; Wolfix earns nothing from it.

What it is. A merchant of record for software and SaaS companies, handling checkout, subscriptions, global tax and fraud protection [S9].

Pricing (as of 2026-10-04). 5% + 50¢ per checkout transaction, with no monthly or migration fees [S9]. High-volume, low-value transactions are on custom pricing [S9].

Pros

Tax compliance and fraud protection handled as the merchant of record, with no monthly or migration fees (as of 2026-10-04, [S9]).
Sends invoices internationally with the sales tax handled (as of 2026-10-04, [S9]), which suits selling to businesses.

Cons

The same 5% + 50¢ as Lemon Squeezy (as of 2026-10-04, [S9], [S1]), and on a low-priced product the fixed 50¢ is a large share of each sale.
Before Paddle acts as your merchant of record it verifies your account in three phases — domain review, business identification and identity verification (as of 2026-10-04, [S11]) — so selling waits on that review.

Who it suits. A SaaS company selling internationally, including to businesses, that wants a merchant of record.

Polar

Not a Wolfix partner. Named for comparison; Wolfix earns nothing from it.

What it is. A merchant of record for software, subscriptions and digital products, with its rates published and optional monthly plans that lower the per-transaction fee [S10].

Pricing (as of 2026-10-04). Starter is free at 5% + 50¢ per transaction; Pro is $20 a month at 3.8% + 40¢, Growth $100 at 3.6% + 35¢ and Scale $400 at 3.4% + 30¢ [S10]. International cards add 1.5%, and payouts carry the underlying Stripe payout fees [S10].

Pros

Four published tiers, from free at 5% + 50¢ down to 3.4% + 30¢ on Scale (as of 2026-10-04, [S10]); by Polar's own figures the $20 Pro plan pays for itself at about $1,379 a month in sales.

Cons

International cards add 1.5% and payouts carry fees of up to 0.25% + $0.25 plus a $2 monthly charge (as of 2026-10-04, [S10]), so the headline rate understates the real cost.

Who it suits. A developer selling software or subscriptions who wants merchant-of-record cover and transparent, lower rates as sales grow.

Still undecided: the app stores' own billing

For in-app subscriptions, you can use Apple's and Google's billing libraries directly and skip RevenueCat; you give up the cross-platform subscriber record and analytics.

Side-by-side comparison

Service	What it is	Fee	Handles sales tax and VAT	Checked
Lemon Squeezy	Merchant of record [S1]	5% + 50¢ per transaction [S1]	Yes, as merchant of record [S1]	2026-10-04
RevenueCat	In-app subscription SDK and backend [S3]	Free to $2,500 MTR, then 1% [S3]	No — the app stores do for in-app sales	2026-10-04
Stripe	Payment processor and billing [S4]	2.9% + 30¢ domestic cards; Billing 0.7% [S4], [S5]	Calculates with Stripe Tax; merchant of record only with Managed Payments [S6], [S7]	2026-10-04
Paddle	Merchant of record [S9]	5% + 50¢ per checkout transaction; custom for high-volume, low-value [S9]	Yes, as merchant of record [S9]	2026-10-04
Polar	Merchant of record [S10]	5% + 50¢ free; from 3.8% + 40¢ on $20/month [S10]	Yes, as merchant of record [S10]	2026-10-04

Frequently asked questions

Stripe, Paddle or Lemon Squeezy?

Stripe if you want its 2.9% + 30¢ domestic card fee and will handle tax yourself or through Managed Payments, which adds 3.5% per transaction (as of 2026-10-04, [S4], [S7]); Paddle or Lemon Squeezy if you want a merchant of record to take the tax off your hands at 5% + 50¢ (as of 2026-10-04, [S9], [S1]).

What is a merchant of record?

The company that legally sells your product to the customer. It takes on sales-tax and VAT collection and filing, and pays you what is left after its fee.

Do I need a merchant of record to sell software in the EU?

Not legally — you can register for VAT yourself — but for a small seller a merchant of record is usually the simpler route, because it removes the registrations and returns.

Is RevenueCat a payment processor?

No. For in-app purchases, Apple and Google process the payment; RevenueCat manages the subscriptions on top and charges 1% of tracked revenue above $2,500 a month (as of 2026-10-04, [S3]).

What does Lemon Squeezy charge?

5% plus 50¢ per transaction, with no monthly fee (as of 2026-10-04, [S1]).

Sources

Prices were read from each provider's public pages on the date shown.

[S1] Lemon Squeezy pricing — lemonsqueezy.com/pricing, checked 2026-10-04.
[S2] Lemon Squeezy, 2026 update on Stripe Managed Payments — lemonsqueezy.com/blog/2026-update, checked 2026-10-04.
[S3] RevenueCat pricing — revenuecat.com/pricing, checked 2026-10-04.
[S4] Stripe pricing — stripe.com/pricing, checked 2026-10-04.
[S5] Stripe Billing pricing — stripe.com/billing/pricing, checked 2026-10-04.
[S6] Stripe Tax pricing — stripe.com/tax/pricing, checked 2026-10-04.
[S7] Stripe Managed Payments — stripe.com/managed-payments, checked 2026-10-04.
[S8] Stripe Managed Payments eligibility — docs.stripe.com, checked 2026-10-04.
[S9] Paddle pricing — paddle.com/pricing, checked 2026-10-04.
[S10] Polar pricing — polar.sh/resources/pricing, checked 2026-10-04.
[S11] Paddle help centre, account verification — paddle.com/help/start/account-verification, checked 2026-10-04.

Last reviewed

Last reviewed on 2026-10-04. Payment fees and terms change; confirm them on the sources above before you choose.