Picking a payment processor for SaaS in 2026 hinges on one decision:do you want to be the merchant of record (MoR)?Stripe says yes (you handle tax). Paddle and Lemon Squeezy say no (they handle it). The choice has compounding effects.
Quick Picks
- Want full control + global flexibility→Stripe
- Don't want to handle global VAT/sales tax→PaddleorLemon Squeezy
- Complex subscription billing (B2B)→Chargebee
- Indie SaaS, simple needs→Lemon Squeezy
The MoR Question Explained
If YOU are the merchant of record:
- You collect sales tax / VAT in every jurisdiction you sell in
- You file tax returns in each (or hire someone to)
- You handle chargebacks and disputes
- You get lower payment processing fees (~2.9% + 30¢ with Stripe)
If a MoR (Paddle, Lemon Squeezy) sells on your behalf:
- They collect, file, and remit tax everywhere
- They handle chargebacks (with you splitting some risk)
- Higher fees (~5% + 50¢)
- Less brand control on customer receipts
Pricing Reality (May 2026)
| Provider | Type | Per Transaction | Monthly Min |
|---|---|---|---|
| Stripe | Gateway | 2.9% + 30¢ | $0 |
| Paddle | MoR | 5% + 50¢ | $0 |
| Lemon Squeezy | MoR | 5% + 50¢ | $0 |
| Chargebee | Subscription | $0 (free up to $250K ARR), then 0.75-3% | $249/mo (Performance) |
Real-World Cost Math
For a $50/mo SaaS subscription with 1,000 customers:
- Stripe:1000 × $50 × (2.9% + 30¢ /$50) × ~30% tax = ~$1,750 in fees + tax compliance ($500-2K/year for tax software like Stripe Tax or TaxJar)
- Paddle/Lemon Squeezy:1000 × $50 × (5% + 50¢/$50) = $3,000 — but no tax software needed
So MoR adds ~$15K/year in fees BUT removes tax compliance burden. Worth it if your team can't handle 50+ countries' tax filings.
What Each Does Best
Stripe — Maximum Power, Maximum Responsibility
Stripe is the developer's dream — extensible, flexible, every feature you can imagine. Stripe Tax 2.0 calculates and files taxes in 60+ countries (extra 0.5% fee). Best for: SaaS willing to invest in tax expertise; startups going global with finance teams.
Paddle — Enterprise MoR
Paddle handles VAT, sales tax, and global compliance. Better fraud protection than Lemon Squeezy. Subscription management, dunning automation, and revenue recognition built-in. Best for: SaaS at scale ($1M+ ARR) wanting to outsource tax.
Lemon Squeezy — Indie's MoR
Lemon Squeezy targets indie creators and SaaS founders. Polished UI, modern API, fair pricing. Built-in license keys, affiliates, marketplace. Best for: bootstrapped SaaS, info products, digital downloads.
Chargebee — B2B Subscription Mastery
Chargebee is the subscription management layer that sits on top of Stripe (or other gateways). Handles complex billing scenarios: usage-based, tiered, hybrid, contract management. Best for: B2B SaaS with custom enterprise contracts.
Hidden Costs to Plan For
- Currency conversion:Stripe charges 1% on top of card network fees. Paddle/LemonSqueezy bake conversion into their 5%.
- Disputes/chargebacks:Stripe charges $15 per dispute. Paddle absorbs them up to certain limits.
- Tax software:Stripe Tax adds 0.5% per transaction. Avalara/TaxJar are alternatives but more complex.
