Our judgment on Stripe vs Paddle: the real question is who legally sells to your customer. With Paddle, Paddle does, and it handles the tax and the disputes for a flat 5% + 50 cents. With standard Stripe, you do, and you pay less per transaction but own the VAT filings. Stripe now sells a merchant-of-record product too, called Managed Payments, which narrows the gap and adds restrictions.
Fees below were read from each vendor's pages on 25 October 2026. Stripe serves different prices by country, so what you see may differ. Billing is one of several stack calls a founder makes early, and Hire developers by tech stack: rates, vetting and interview guides covers the others.
Which one for your situation?
These picks are judgment, not measurements.
| Situation | Pick | Why |
|---|---|---|
| European B2B SaaS selling in a few countries, with an accountant who already handles VAT | Stripe, plus Stripe Tax | Lower per-transaction fees, and your invoices carry your own entity |
| Selling to consumers or small businesses in many countries, no finance team | A merchant of record | The seller handles tax registration, filings and disputes for you |
| You want a merchant of record but prefer to stay on Stripe | Managed Payments, if you're eligible | Stripe becomes the seller, with limits listed below |
| Consulting, services or a marketplace | Standard Stripe, or another route | Managed Payments is described for digital products only, and doesn't support Stripe Connect |
What is the difference between a payment processor and a merchant of record?
It's about who legally sells to the customer. Paddle's chargebacks page says "Paddle is the Merchant of Record (MoR) for all transactions processed through our platform", and its VAT help page says that "we act as the seller to them."
A payment processor moves the money and you remain the seller. Stripe's own comparison table in its Managed Payments docs makes the split visible: for Managed Payments the merchant of record is "Stripe", and for its other products it is "Your business".
That one row drives everything else in this article. The seller collects and remits VAT and answers the dispute. Pick the seller and you've mostly picked the workload.
What do Stripe and Paddle charge in 2026?
Paddle's pricing page shows one rate with no region split: 5% + 50 cents per Checkout transaction, with "No monthly fees, migration fees, or hidden extras". It lists tax and regulatory compliance, fraud protection, chargebacks and buyer support as included. For products under $10 in value, the page says to contact Paddle for bespoke pricing. The page lists no payout fees. That's not the same as saying there are none, so ask before you rely on it.
Stripe is harder to quote, because its pricing page depends on the country page you view. These are the figures the pages showed, each for its own locale.
| Stripe fee | US page | Spain (es-ES) page, EEA cards | UK (en-gb) page |
|---|---|---|---|
| Standard domestic cards | 2.9% + $0.30 | 1.5% + 0.25 EUR | 1.5% + 20p |
| Premium cards | not shown | 2.8% + 0.25 EUR | 2.8% + 20p |
| Other European cards | not shown | UK cards 2.5% + 0.25 EUR | EEA cards 2.5% + 20p |
| International cards | +1.5% on top of the domestic rate | 3.15% + 0.25 EUR | 3.15% + 20p |
| Currency conversion | +1% | +2% | +2% |
| Billing | 0.7% of Billing volume | 0.7% | 0.7% |
| Managed Payments | 3.5% on top of Payments fees | 3.5% | 3.5% |
Stripe Tax is priced separately. On the US page, no-code Tax is 0.5%, and the API option is $0.50 per transaction where you're registered. On the EEA-locale page, Tax Basic is 0.5% or 0.45 EUR. Tax Complete starts at $90 a month in the US and 80 EUR a month on the EEA-locale page, each on a one-year contract. Billing's monthly tier on the US page starts at $620 a month.
Don't treat any column as "the Stripe rate". At least one comparison page we read quotes only US rates.
A worked example, labelled as arithmetic from the tables above. Take a 100 EUR subscription paid by a domestic EEA standard card, on the EEA-locale Stripe page. Payments costs 1.5% + 0.25, which is 1.75 EUR. Billing adds 0.7%, which is 0.70 EUR. That's 2.45 EUR before any tax tooling. Add Managed Payments at 3.5% and you reach 5.95 EUR. Stripe's Managed Payments docs say tax calculation on those transactions is at no additional charge. Paddle on the same 100 EUR is 5% + 50 cents, which is 5.50 EUR if the 50 cents is read in the same currency. Paddle's page shows "50¢" only and doesn't say.
So Stripe with its own merchant-of-record product isn't cheaper than Paddle in this example. The saving only appears when you stay the seller and absorb the tax work yourself.
Is Stripe now a merchant of record too?
Yes, for some businesses. Stripe's Managed Payments overview says to use it "to sell digital products such as SaaS, software, and digital content or downloads". Stripe says it "handles sales tax, VAT, and GST compliance in more than 80 countries, along with fraud prevention, dispute management, and transaction-level customer support".
Your customers see it. The how-it-works page says "The customer sees Link as the merchant of record, and sees purchases as Sold through Link." The statement descriptor reads LINK.COM* followed by yours. If your brand on the bank statement matters for dispute rates, that's a change to plan for.
The limits are real, and they're what decides it for many teams. Stripe's overview lists unsupported integrations: Managed Payments doesn't support Stripe Connect, creating a subscription outside Checkout or Payment Links, or third-party tax integrations. The how-it-works page adds that custom domains aren't supported on its checkouts. You also can't update subscription.default_payment_method directly through the API. If your billing logic creates subscriptions server-side, that's a rewrite, not a toggle.
We haven't reproduced Stripe's eligibility rules here. Check them for your entity and product before you plan around it.
How do EU VAT, OSS and reverse charge work for each?
This is a general description from the vendors' documentation, not legal or tax advice. Ask your accountant.
On standard Stripe you're the seller, so the VAT obligations are yours. Stripe Tax calculates the tax, and registration and filing remain yours to arrange with an adviser. Whether the EU's One-Stop Shop scheme applies to your consumer sales, and which version, depends on where your business is established. Take that to your accountant.
B2B sales work differently, through reverse charge, where a VAT-registered business buyer accounts for the VAT in its own return. On standard Stripe, how your checkout and invoices handle the buyer's VAT ID is something to settle with your accountant.
On Paddle, Paddle is the seller. Its VAT help page says a buyer who enters a valid VAT ID "will not pay VAT to Paddle at the time of purchase" and accounts for it in its own return. Paddle describes itself as the seller to the buyer, so ask it what that leaves you to register for in your own case.
The invoice follows the seller. With Managed Payments, Stripe sends invoices via Link in the countries where it handles tax; elsewhere, check who invoices. On standard Stripe, the invoice is yours. With Paddle, ask which entity appears on the buyer's invoice before a procurement team asks you, since we couldn't confirm that from the pages read. Whether any of this affects how you recognise revenue is an accounting question we won't answer here.
Who owns invoices, disputes and chargebacks?
Paddle's chargeback help page is specific. A dispute "is raised against Paddle rather than you, the seller." Paddle deducts both the transaction amount and the fee from your seller balance. The fee is 20 in USD, GBP or EUR, or 40 in CAD or AUD, depending on the transaction currency. The page says "additional evidence submitted by sellers is not required or accepted", so you can't argue the case yourself. It also puts the chargeback rate threshold at "Below 0.65% of transaction volume".
That's a trade. You lose control over a contested charge, and you also lose the paperwork. Our judgment: if you sell cheap consumer plans, the fee and the 0.65% line matter more than if you sell annual contracts to businesses.
Stripe Managed Payments is closer to Paddle here: "With Managed Payments, Stripe handles disputes for you." Received disputes still incur a dispute received fee. On standard Stripe you're the merchant, so you respond to each dispute and carry the outcome.
What does it cost to switch between them?
Mostly engineering time, plus a card-data transfer that both vendors have to agree to. Neither pricing page covers it, so read each vendor's data-export terms before you plan a move. Our judgment: expect saved cards to be the hard part and subscriptions to be something you rebuild.
Our judgment on the engineering list, not a vendor claim: replace the checkout, map every Stripe customer, subscription and price to its new equivalent, rewrite the webhook handlers, revisit the logic that decides who has access to what, and plan a period where legacy subscribers still bill on the old system. Budget this as a project with an owner, not an afternoon.
From Paddle to Stripe, we don't have a source for how card data can be exported. Paddle is the seller, so check its export terms with Paddle before you commit. Don't assume a migration is possible on your schedule.
Stripe vs Paddle at a glance
| Criterion | Stripe (standard) | Stripe Managed Payments | Paddle |
|---|---|---|---|
| Seller of record | Your business | Stripe | Paddle |
| Headline fee | Region-specific; see table above | 3.5% on top of Payments fees | 5% + 50 cents per Checkout transaction |
| Recurring billing fee | Billing 0.7% (US, es-ES and en-gb pages) | As standard | No separate billing fee listed on the pricing page |
| VAT and tax filing | Yours; Stripe Tax calculates | Stripe handles tax in 80+ countries | Paddle handles tax and compliance |
| Disputes | You respond | Stripe handles them | Raised against Paddle; sellers can't add evidence |
| Customer sees | Your business as seller | "Sold through Link" | Paddle as the seller |
| Key limits | None specific | No Connect, no custom domain, subscriptions only via Checkout or Payment Links | Chargeback rate below 0.65% |
| Leaving | Check Stripe's export terms | Check Stripe's export terms | Check Paddle's export terms |
Who owns billing on your team?
Billing is one of the stickiest choices in a stack, in the same way Clerk against Auth0 on pricing and EU data is for logins: the customer records, subscriptions and invoices end up living in the vendor. For the same lock-in question on a backend, see Convex against Supabase on lock-in.
Judgment, not vendor data: on a merchant of record, the tax filings leave your plate in the countries it covers, but the engineering doesn't. Someone still maintains the webhook handlers, the dunning logic and the entitlement checks. On standard Stripe you keep all of that and you and your accountant also keep the filings. Decide who does each job before you pick the tool: the finance owner for VAT and invoices, a backend engineer for billing code. The people who wire up either one are typically Node.js or Python backend engineers.
What this means for choosing a billing stack
The decision is who owns tax compliance and billing engineering for the next two or three years: your own VAT registrations on a processor, or a merchant of record that sells on your behalf.
Our judgment: choose the merchant of record if you sell into many VAT regimes with no finance function. Stay on a processor if your invoices must carry your own entity, you sell services, or you need Connect. In the worked example above, the fee difference was small, so don't let price decide it.
Before you commit, ask three things. Which entity must appear on enterprise customers' invoices? Who files VAT, and who answers if it's wrong? And what does leaving cost, in saved cards and rebuilt subscriptions? To size who builds and maintains this, read what a European software team costs.
FAQ
Who is Stripe's biggest competitor?
We haven't ranked Stripe's competitors by size, so we won't name one. For a SaaS choosing a billing stack, Paddle is one merchant-of-record alternative, and the one compared here.
What are the downsides of using Stripe?
With standard Stripe you're the seller, so VAT registration and filing are yours. Stripe Tax calculates, but registration and filing remain yours to arrange. Fees also vary by country, so the US figure you see in a comparison may not be yours. Managed Payments takes tax off your plate, but it doesn't support Connect or custom domains, and it creates subscriptions only through Checkout or Payment Links.
How much is the Stripe fee for $1000?
On the US pricing page, domestic cards are 2.9% + $0.30. Arithmetic: 2.9% of $1,000 is $29.00, plus $0.30 gives $29.30. That excludes Billing, Tax, international card and currency conversion add-ons, and it may not be your rate outside the US.
Is Paddle cheaper than Stripe?
Not necessarily. Paddle's 5% + 50 cents includes tax compliance, chargebacks and fraud protection. Stripe's Payments rates are lower, but Billing and Tax are extra, and you do the filing. In our 100 EUR example, Stripe with Billing and Managed Payments came to 5.95 EUR against Paddle's 5.50 EUR, if its 50 cents is read as euro cents.
Does Stripe Managed Payments replace Paddle?
For some sellers it does the same job. Stripe becomes the merchant of record, handles tax in more than 80 countries and handles disputes. It has limits Paddle may not share, and we haven't compared Paddle's feature set line by line. If you create subscriptions through the API, test whether Managed Payments fits before you plan a move.