The question comes up the moment you sell to your first customer outside your home country: who's responsible for collecting and remitting sales tax, VAT, and GST across every jurisdiction you sell into? With a payment processor, the answer is you. With a Merchant of Record, the answer is them — for a bigger cut of every transaction.
Here's what that trade-off actually looks like across the platforms solo founders reach for most.
What "Merchant of Record" actually means
A Merchant of Record (MoR) is a third party that becomes the legal seller of your product. They collect the payment, calculate and remit the correct tax in every region you sell into, handle chargebacks under their own merchant account, and pay you out the remainder. In exchange, they take a meaningfully larger cut than a plain payment processor — usually somewhere between 5% and 10% of revenue, versus roughly 3% for card processing alone.
A payment processor like Stripe or plain Stripe Billing, by contrast, moves money but leaves you as the legal seller — which means you're on the hook for registering, collecting, and filing sales tax and VAT in every country you have customers in, once you cross that country's economic nexus threshold. Stripe Tax can calculate what's owed; it doesn't file or remit it for you.
The main options
Stripe (payment processor, not MoR)
The baseline everyone compares against. Lowest fees, the most flexible billing engine on the market, and full control over checkout, invoicing, and subscription logic. The cost is tax compliance ownership — worth it once you have the volume (or the accountant) to justify it, riskier when you're moving fast solo.
Paddle
Positions itself as "billing infrastructure" as much as a MoR — subscription management, dunning, and checkout are all built in, not bolted on. Popular with B2B SaaS specifically because it handles invoicing and business-buyer flows well, not just consumer card payments.
Lemon Squeezy
The MoR most solo and indie SaaS founders reach for first, largely because the setup genuinely takes minutes: a hosted checkout page, license key generation for software products, and an affiliate program built in without extra tooling. Acquired by Stripe in 2024, which has made its long-term roadmap a common question in indie-hacker circles — still actively used and supported at the time of writing.
Gumroad
The simplest option and the most consumer-product-shaped: digital downloads, one-time purchases, and a built-in discovery audience through Gumroad Discover. Weaker fit for complex subscription billing logic than Paddle or Lemon Squeezy, strong fit for a single digital product with a straightforward price.
Side-by-side
| Platform | Type | Typical fee | Handles global tax | Best for |
|---|---|---|---|---|
| Stripe | Payment processor | ~2.9% + $0.30 | No (calculates only, via Stripe Tax) | Teams ready to own tax compliance |
| Paddle | Merchant of Record | ~5% + $0.50 | Yes | B2B SaaS with invoicing needs |
| Lemon Squeezy | Merchant of Record | ~5% + $0.50 | Yes | Solo SaaS, fastest setup |
| Gumroad | Merchant of Record | ~10% (or ~3.5% + $0.30 on subscriptions) | Yes | Single digital products, downloads |
How to choose
If you're selling B2B and invoices matter, Paddle's billing tooling earns its fee. If you're shipping a solo SaaS product and want to stop thinking about tax the same day you launch, Lemon Squeezy is the fastest path from zero to a working checkout. If you're selling one digital product with simple pricing, Gumroad's built-in audience can be worth more than the fee difference. And if you already have the volume to justify an accountant and Stripe Tax filing support, staying on Stripe alone keeps the most margin in your pocket.
None of these are permanent decisions — most teams can migrate later once volume changes the math. Pick the one that gets you charging customers this week, not the one that's theoretically optimal at revenue you don't have yet, and see our MVP toolkit guide for how billing fits alongside the rest of a lean stack.
Wherever the money lands, you still need to see it
Whichever platform you pick, revenue is one of the numbers you'll check daily — alongside uptime, error rates, and deploys. FounderOS pulls real MRR straight from your connected billing provider into the same Today view as everything else you run, so switching MoR platforms later doesn't mean rebuilding a revenue dashboard from scratch.