solobuild
Picking a payment processor feels like a reversible decision right up until you try to reverse it. Your checkout links are sitting inside old emails, your subscription records live in one system, and the stored card details for your paying customers are not something you can export on a whim. For a solo founder, switching later usually costs a week you did not plan for, which makes the choice worth an hour of real thought now. The three names that come up most often are Stripe, Lemon Squeezy, and Paddle, and the honest comparison between them looks different than it did a year ago.
Two things changed the picture. Stripe acquired Lemon Squeezy in July 2024, and in February 2026 Stripe pushed its own merchant of record product, Stripe Managed Payments, into public preview. That means the company that owns the friendliest indie option now also sells a competing product at a higher price. Anyone comparing these tools in 2026 is really comparing four options, not three, and the cheapest one on paper is rarely the cheapest one in practice.
Who owes the tax is the question that actually decides this
Almost every comparison of these platforms leads with transaction fees, which is the least interesting difference between them. The real split is legal. With standard Stripe, you are the seller of record. That means you are the one responsible for figuring out where you owe sales tax, VAT, or GST, registering in those places, collecting the right amount, and filing returns on whatever schedule each authority expects.
Paddle, Lemon Squeezy, and Stripe Managed Payments work differently. They act as the merchant of record, which means they are legally the seller and your customer's receipt has their name on it. They calculate the tax, collect it, remit it, and file the returns. You get paid a net amount and you never register anywhere.
For a US founder selling to US customers, that difference might not matter much for a while. The moment you sell a digital product to someone in Germany, the UK, or Australia, it starts to matter quite a bit. Rules for digital goods sold to consumers tend to kick in at very low volumes, and for sellers based outside those regions there is often no minimum threshold at all. This is worth confirming with an accountant who knows your situation, because the answer depends on where you are based and what exactly you sell.
The extra two to three percentage points a merchant of record charges is the price of never thinking about that again. Whether that price is fair depends entirely on how much revenue you are running through it, which is a calculation worth doing rather than guessing at.
Stripe is the cheapest way to take money and the most work to stay compliant
Stripe's headline rate in the US is 2.9% plus 30 cents per successful domestic card charge. International cards add 1.5%, and if a currency conversion is involved, add another 1%. Disputes cost $15 each. Standard payouts are free on a rolling, weekly, or monthly schedule, and Instant Payouts cost 1.5% with a 50 cent minimum if you want the money faster.
Those numbers are only part of the bill for a subscription business. Stripe Billing, which handles recurring charges, plans, proration, and dunning, runs 0.7% of billing volume on the pay-as-you-go option. Stripe Tax costs 0.5% per transaction on the no-code integration, or you can move up to Tax Complete starting at $90 per month if you want automated registrations and filings included. Stack those together and a US subscription business is closer to 4.1% plus 30 cents than to the 2.9% on the marketing page.
What you get for that is the best developer experience in the category by a wide margin. The documentation is genuinely good, nearly every tool you might want to connect to already has a Stripe integration, and the webhook system is reliable enough that you can build real automation on top of it. If you want new payments to trigger onboarding emails, provision access, or drop a row in a spreadsheet, wiring Stripe webhooks into a tool like Make takes an afternoon rather than a sprint.
The catch is that Stripe Tax calculates and monitors, but it does not make the obligation disappear. It will tell you when you are approaching a registration threshold somewhere, and then registering is still your problem unless you pay for Tax Complete. For a solo founder selling globally, that ongoing administrative tail is the real cost, and it does not show up in any fee comparison table.
Stripe Managed Payments is the answer to that, and it is priced accordingly. It adds 3.5% on top of standard Stripe Payments fees, which puts a US domestic transaction at roughly 6.4% plus 30 cents. International cards and currency conversion push it higher, past 8% in some cases. It went into public preview in February 2026 and supports merchants in 35 or more countries, with expansion planned. On headline rate it is the most expensive merchant of record on the market, and what you are paying the premium for is staying inside the Stripe dashboard and API you already know.
Lemon Squeezy still works, and its future is the open question
Lemon Squeezy charges a flat 5% plus 50 cents per transaction with no monthly fee and no tiers. Every seller gets the whole platform from day one. Payouts run twice a month, standard payouts to a domestic bank are free with a five to seven day delay, and payouts to international bank accounts carry a 1% fee.
The reason it earned its reputation with indie builders is everything bundled around the payment. It includes a hosted storefront, digital file delivery, and built-in affiliate tools, which means a solo founder selling an ebook, a template pack, or a small app can go from nothing to accepting money in an afternoon. There is no separate cart, no separate delivery system, and no tax registration to sort out first. For a first product, that speed is worth a lot.
The complication is what happens next. Stripe bought the 13-person team in July 2024, and Lemon Squeezy has continued to run as its own product with its own dashboard and API since then. In January 2026, founder JR Farr confirmed the team is building migration paths from Lemon Squeezy to Stripe Managed Payments. The official line is that nothing is shutting down, and there is no announced end date, so an existing seller is not facing an emergency.
Community reports since the acquisition have been less reassuring. Builders have described a quiet roadmap, slower support response times, and occasional checkout and payout incidents. Treat those as reported experience rather than confirmed policy, because individual accounts vary and none of it is official. The structural concern is more concrete than the anecdotes anyway. Stripe Managed Payments does not include the storefront, the digital delivery, or the affiliate tools that make Lemon Squeezy useful for creators, since Stripe builds payment infrastructure and not creator storefronts. If you pick Lemon Squeezy specifically for those features, the eventual migration path may not carry them with you.
Paddle asks more of you before it will take your money
Paddle charges 5% plus 50 cents per checkout transaction with no monthly fee on the standard pay-as-you-go plan. Products priced under $10, and anything that needs invoicing rather than card checkout, go through custom pricing arranged on a call. The bundle includes global tax handling, fraud and chargeback management, subscription billing, revenue recovery, and 24/7 support that answers your customers' billing questions instead of routing them to you.
The friction shows up at the front door. Paddle manually reviews every account before approving it, and the process typically takes three to seven business days for a straightforward product and longer for anything unusual. Founders have reported rejections for reasons that are not documented anywhere public, including a legal entity name that does not exactly match what appears on the website, and a lack of prior payment processing history. Multiple builders have described going through two or three rejection cycles with generic feedback in between. If you are launching next week, that is a real scheduling risk.
There are cost details worth knowing before you commit. Currency conversion spreads are commonly reported in the 1.5% to 2% range, which is not visible in the headline number but shows up on every non-USD sale. Refunds return the customer's money without returning the original transaction fee, so a refund-heavy product costs more than the math suggests. Payouts run on a rolling schedule with a holding period, which is slower than Stripe's next-day option and matters if your cash flow is tight.
Where Paddle earns its place is durability and B2B. It has been doing merchant of record work for software companies far longer than the others, it handles invoicing and purchase orders that B2B buyers ask for, and its support team fields billing tickets you would otherwise answer yourself. For a solo founder whose product sells to businesses in a dozen countries, that is a meaningful amount of work handed off.
What each one actually costs at real numbers
| Tool | Best For | Free Tier | Starting Price |
|---|---|---|---|
| Stripe (standard) | US-focused sellers willing to manage their own tax registration | Yes, no monthly fee | 2.9% + $0.30 per domestic card charge |
| Stripe Managed Payments | Existing Stripe users who want tax handled without leaving Stripe | Yes, no monthly fee | 3.5% on top of standard Stripe fees, about 6.4% + $0.30 in the US |
| Lemon Squeezy | Solo sellers of digital products and small SaaS who want the fastest possible start | Yes, no monthly fee | 5% + $0.50 per transaction |
| Paddle | Established SaaS selling globally, especially with B2B invoicing | Yes, no monthly fee on pay-as-you-go | 5% + $0.50 per checkout transaction |
Percentages are abstract, so run them against a real number. Take a business doing $2,000 per month from 40 subscriptions at $50 each, all domestic US cards. On the standard Stripe stack, processing costs $58 plus $12 in per-transaction fees, Billing adds about $14, and Stripe Tax adds about $10, landing near $94 or 4.7% all in. On Lemon Squeezy or Paddle, the same month costs $100 in percentage plus $20 in per-transaction fees, so $120 or 6%. On Stripe Managed Payments it is roughly $140, or 7%.
The gap between running your own tax stack on Stripe and handing it to a merchant of record is about $26 a month at that revenue, which is a little over $300 a year. That is the number the decision actually turns on. If registering and filing in even one additional jurisdiction costs you more than $300 a year in accountant fees and your own time, the merchant of record is the cheaper option, not the expensive one. At $20,000 a month the same gap becomes roughly $3,100 a year, and the calculation starts to flip the other way.
International sales change this quickly. Once a meaningful share of your revenue comes from foreign cards, Stripe's extra 1.5% plus 1% conversion narrows the gap on its own, before you account for any VAT work. A founder selling mostly to Europe often finds the two options land within a point of each other, at which point the tax handling is free in practical terms.
FAQ
Is Lemon Squeezy shutting down? No shutdown has been announced. Lemon Squeezy continues to operate with its own dashboard and API, still processes payments, and still handles tax and subscriptions. The company has confirmed it is building migration paths to Stripe Managed Payments, which suggests eventual convergence rather than an abrupt end. Existing sellers have time, but new sellers should know that some Lemon Squeezy features, including the storefront and affiliate tools, do not exist on the Stripe side.
Do I need a merchant of record if I only sell in the United States? Probably not, at least at first. If your customers are US-based and your revenue is modest, standard Stripe with Stripe Tax handles the situation at a lower total cost. The calculation changes when international sales become a real share of revenue, since that is when registration obligations multiply and the merchant of record premium starts paying for itself.
Which is cheaper, Stripe or Paddle? Stripe is cheaper on headline processing and stays cheaper as long as you handle your own tax compliance. Once you add Stripe Billing and Stripe Tax, the effective US rate lands somewhere around 4.1% plus 30 cents against Paddle's 5% plus 50 cents. The remaining gap is small enough that the decision usually comes down to whether you want to own tax registration and filing, not to the fee difference.
Can I switch payment processors later? You can, but it costs more than people expect. Active subscriptions are the hard part, because stored card details generally cannot be exported freely and asking existing customers to re-enter payment information reliably loses some of them. Moving from a merchant of record to being your own seller of record also means taking on the tax registrations you avoided. Plan for a migration to take a week of work and some churn.
Will Paddle approve a solo founder without a registered company? The requirements are inconsistent and not fully documented, and multiple solo sellers have reported needing a business entity or tax ID to get through review. Approval typically takes three to seven business days when it goes smoothly, and rejection over small mismatches between your legal entity name and your website is a common complaint. If you have no company set up and want to sell this month, Lemon Squeezy or standard Stripe will be less painful.
What to pick
If your customers are mostly in the United States and you are comfortable using Stripe Tax and dealing with registrations as they come up, use standard Stripe. You will pay the least, you will get the best tooling, and you keep the option of adding Managed Payments later without changing platforms.
If you are selling a digital product or a small SaaS globally and you want to be live this week, Lemon Squeezy is still the fastest path. Go in knowing the platform's long-term shape is unsettled and that a migration is likely at some point. If you are building a simple product page around it, pairing it with something like Carrd keeps the whole setup to an afternoon. Course and info-product sellers who want checkout, email, and delivery in a single system may get further with an all-in-one like Systeme.io instead of assembling the pieces.
If you have a real SaaS business with international customers, B2B buyers who ask for invoices, and enough volume that the tax question is genuinely expensive, Paddle is the more durable choice. Budget a week for approval, make sure your entity name matches your website exactly, and do not schedule a launch before you have been approved.
Stripe Managed Payments makes sense in one specific case, which is when you are already deep in Stripe, you want the tax burden gone, and you would rather pay a premium than run a second platform. At 6.4% plus 30 cents in the US, it is the most expensive option here, and it is worth it only if that premium buys back more of your time than it costs.
The decision is smaller than it feels. Every option here works, none of them will lose your money, and the difference at solo-founder revenue is a few hundred dollars a year. Pick the one that removes the work you least want to do, then go back to building.