Stripe vs Paddle vs Lemon Squeezy: the indie SaaS comparison for 2026
Honest comparison of Stripe, Paddle and Lemon Squeezy for solo founders and small SaaS teams — covering pricing, MOR status, tax handling, payouts, and the hidden friction.
For a one-person SaaS, the payment processor choice is genuinely one of the top 5 decisions you make. Here is the comparison without the affiliate-link spin.
Stripe: cheapest, most work
Stripe is a payment processor, not a Merchant of Record. That means:
- Lowest fees (~2.9% + $0.30 standard).
- You're responsible for VAT in the EU, GST in 30+ countries, US sales tax in the states where you cross nexus thresholds.
- You need a separate tax tool (Stripe Tax adds ~0.5%, or use Quaderno / TaxJar) and you still file the returns.
- Best developer experience by a wide margin.
Use Stripe when: you have an accountant or a tax stack you trust, you sell mostly to one or two markets, or revenue is high enough to justify the overhead.
Paddle: highest fees, zero tax work
Paddle is a Merchant of Record. They are the legal seller. They collect, file, and remit tax everywhere — you just receive a clean payout.
- ~5% + $0.50 per transaction.
- They handle EU VAT, US sales tax, Brazilian invoices, all of it.
- Chargebacks and disputes go through them.
- API is fine but feels like an enterprise product. Lots of dashboards.
- Payouts are bi-weekly, with a holding period for new accounts.
Use Paddle when: you're selling to a global audience, you're a one-person team, you cannot stomach US sales-tax filings, or you sell digital goods at $20+ per month where the fee difference is small in absolute terms.
Lemon Squeezy: Paddle's friendlier sibling
Same MOR model as Paddle, indie-friendly UX, faster onboarding.
- Same ~5% + $0.50.
- Much better dashboard and developer docs.
- Built-in affiliate program, license keys for software downloads, customer portal.
- Subscriptions are good but less mature than Stripe at edge cases (mid-cycle plan changes, complex proration).
Use Lemon Squeezy when: you're an indie hacker, you're selling templates / digital downloads / one-shot products, or you want Paddle's MOR upside without the enterprise feel.
My default recommendation
- Solo founder, global SaaS, under $200k ARR: Lemon Squeezy. The mental overhead saved is worth the fee.
- Solo founder, US-only B2B SaaS: Stripe. Sales tax is manageable in a few states.
- Team of 3+, $200k+ ARR, global: Stripe with Stripe Tax or a dedicated compliance tool. The savings start to compound.
Switching providers later is painful but not catastrophic. Pick on the work you can absorb, not the rate that looks lowest in a comparison table.
Common questions
- What is a Merchant of Record (MOR)?
- A MOR is the legal seller of the product on the invoice. Paddle and Lemon Squeezy are MORs — they handle VAT, sales tax, and customer-facing invoices in every country. Stripe is a payment processor, not a MOR — tax compliance is your problem.
- Which has the lowest fees?
- Stripe (~2.9% + $0.30). Paddle (~5% + $0.50). Lemon Squeezy (~5% + $0.50). Stripe wins on raw rate, loses on the work it offloads to you.
- Can a non-US founder use Stripe?
- Yes via Stripe Atlas or local Stripe entities in 40+ countries. The downside is you become the tax agent everywhere you sell. For a one-person SaaS doing under ~$200k ARR, the time tax often outweighs the fee savings.
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