Paddle vs Stripe
Written by Mateus Rocha ·
Edited by Sebastiaan Smits ·
Fact-checked by Priya Nandakumar ·
Published September 30, 2026 · Updated September 30, 2026
Paddle becomes the legal seller of your software, collecting and remitting sales tax and VAT and handling chargebacks, for 5% plus 50 cents per transaction. Stripe is a gateway with a lower card rate, tax tooling sold separately, and its own merchant-of-record option at 3.5% on top of payment fees. Small software sellers choose Paddle; most other businesses choose Stripe.
Side by side
 Paddle |  Stripe | |
|---|---|---|
| What it is | Merchant of record for SaaS and software sellers | Developer-first payments, instant self-serve signup |
| Best for | Cross-border SaaS and software companies | Developer-led SaaS, marketplaces and online stores |
| Headquarters | United Kingdom | United States |
| Pricing model | Usage-based | Usage-based |
| Pricing | 5% + $0.50 per checkout transaction, all-inclusive: covers payment processing, global sales-tax and VAT compliance and remittance, fraud protection, and support; no monthly fee. | 1.5% + EUR0.25 for standard EEA cards, higher for UK and international cards, per Stripe's published Netherlands rate card; no monthly fee for core payments; add-ons such as Billing, Tax, Sigma and the Managed Payments merchant-of-record service are charged separately. |
| Free option | None | None |
| List price as listed on September 30, 2026 | 5% + 50¢ per checkout transaction, no monthly fee | 1.5% + €0.25 per successful charge for standard EEA cards, no monthly fee (as listed on Stripe's Netherlands pricing page) |
| Place in our payment processing software ranking | #3 of 15 | #4 of 15 |
| Website | paddle.com | stripe.com |
Both are reviewed in full in Best Payment Processing / Payment Gateway Software in 2026. Position in that ranking can be paid for; the wording of a review or of this comparison cannot. Placement disclosure.
Which one to choose
Choose Paddle if
you sell software or digital products to customers in many tax jurisdictions and would rather pay a higher all-inclusive rate than manage VAT and sales tax registration and remittance yourself.
Paddle, #3 in the ranking · Visit Paddle →
Choose Stripe if
you want the lower per-transaction rate, sell something other than software, or have the developers and finance help to handle tax yourself while building on a broad payments API.
Stripe, #4 in the ranking · Visit Stripe →
Where they differ
Who is liable for sales tax and VAT
As merchant of record, Paddle acts as the reseller of your product and is responsible for collecting and paying VAT and sales tax, in more than 100 jurisdictions. With Stripe Tax the business stays the seller: Stripe calculates the tax and can register for you, but you must file and remit wherever you are registered, yourself or through a filing partner. Paddle removes the larger burden.
Edge: Paddle
The per-transaction rate
Paddle charges 5% plus 50 cents per checkout transaction with no monthly fee, covering processing, tax compliance, fraud protection and support; products priced under $10 need custom pricing. Stripe's Dutch price list shows 1.5% plus EUR0.25 for standard EEA cards, 2.5% for UK cards and 3.15% for other international cards, with Stripe Tax from 0.5% per transaction. On processing alone Stripe is well below Paddle.
Edge: Stripe
Stripe's own merchant-of-record option
Stripe now sells Managed Payments, in which Stripe is the merchant of record for digital products and handles indirect tax in more than 80 countries, plus fraud, disputes and transaction support. It costs 3.5% per successful transaction on top of standard payment fees, works only through Checkout and Payment Links, and requires an eligibility review. Against Paddle's 5% plus 50 cents, the total depends on your card mix.
Edge: even
What kinds of business fit
Paddle's acceptable use policy limits it to software and digital products: physical goods are prohibited, as are human services such as consulting or coaching and marketplaces that sell for third parties. Stripe serves SaaS companies, marketplaces through Connect, and online stores, with in-person payments through Terminal. A company that may later add physical products or a marketplace can do that on Stripe only.
Edge: Stripe
Fraud and chargeback exposure
Paddle screens transactions and, as merchant of record, honors refunds and chargebacks, with fraud protection inside its rate. On a standard Stripe account a dispute is debited from your balance together with a dispute fee, EUR20 on the Dutch price list, and you gather and submit the evidence yourself; Radar fraud tooling is priced separately. If the aim is to stop handling chargebacks, Paddle's model goes further.
Edge: Paddle
Tally: Paddle 2, Stripe 2, even 1.
When neither fits
Neither suits a business that takes most of its money in person: Square's point-of-sale hardware and free software tier are built for that. And a company mainly collecting recurring invoices from known customers by bank debit should add GoCardless rather than rely on cards alone.
See Square and GoCardless among the 15 products in Best Payment Processing / Payment Gateway Software in 2026.
Questions and answers
Why is Paddle more expensive than Stripe?
Paddle's 5% plus 50 cents is an all-inclusive rate: it covers payment processing, sales tax and VAT compliance and remittance, fraud protection and support, with Paddle acting as merchant of record. Stripe's lower card rate covers processing only; Stripe Tax starts at 0.5% per transaction and its merchant-of-record service adds 3.5%.
Do both Paddle and Stripe handle subscription billing?
Yes. Paddle lists subscription billing, invoicing and dunning, and multi-currency pricing. Stripe has Billing and subscriptions along with multi-currency settlement. The difference is not whether each can bill recurring plans but who is the legal seller and who handles the tax that follows.
Does Stripe offer a merchant of record like Paddle?
Yes, for digital products. Stripe Managed Payments makes Stripe the merchant of record for software, games, digital media and online courses, for businesses based in supported locations including the US, Canada, the UK and most EU countries. It costs 3.5% on top of payment fees and excludes physical goods, professional services and Connect platforms.
Should a physical-goods store use Paddle or Stripe?
Stripe, of these two. Paddle's acceptable use policy prohibits physical products, and Stripe's Managed Payments excludes them too, so a standard Stripe account is the route. Stripe serves online stores directly, though a shop needing mature in-person hardware would be better served by Square than by either.
Sources
Prices, plan limits and product facts on this page were checked against the vendors' own pages on September 30, 2026. Vendors change both without notice, so treat the figures as of that date.
- Paddle pricing page: Paddle's 5% plus 50 cents rate, no monthly fee, what the rate includes, custom pricing under $10
- Paddle help: how Paddle takes on VAT and tax responsibilities: Paddle acts as reseller and is responsible for collecting and paying VAT and sales tax
- Paddle 101: tax handled in more than 100 jurisdictions; Paddle honors refunds and chargebacks
- Paddle help: what you may not sell: physical goods, human services and third-party marketplaces are prohibited
- Stripe pricing page (Netherlands): Stripe card rates, Stripe Tax, Managed Payments and dispute fees
- Stripe docs: file and remit tax: with Stripe Tax the business must still file and remit, itself or via a partner
- Stripe docs: Managed Payments: Stripe as merchant of record for digital products, tax in 80+ countries, Checkout and Payment Links only
- Stripe docs: Managed Payments eligibility: supported business locations, eligible digital products, exclusion of physical goods and services
- Stripe docs: how disputes work: disputed amount and dispute fee are debited from the business's balance