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Paddle

A merchant of record that resells your software so it collects and remits global sales tax and handles billing on your behalf.

5% + $0.50 per transaction, no monthly feeFree tier
Visit PaddleSee all payments & billing

What it actually does

Paddle acts as the reseller of your product, which makes it the legal merchant of record. It registers for, collects, and remits VAT and sales tax worldwide, and it handles chargebacks, fraud checks, dunning, and buyer support emails.

A single flat rate of 5% + $0.50 covers processing, subscription billing, tax compliance, and chargeback defense with no add-on stack. Its billing engine handles proration, upgrades and downgrades, trials, and failed-payment recovery natively.

It suits a founder selling internationally who would rather pay a flat premium than register for tax in a dozen jurisdictions. Onboarding review is strict and can take several days, and products priced under $10 are pushed to custom sales pricing.

Paddle vs its main rivals

The tools people actually weigh against Paddle: FastSpring, Verifone (2Checkout), Digital River, Lemon Squeezy. Same criteria for every column, including where Paddle loses.

Paddle logoPaddleFFastSpringVVerifone (2Checkout)DDigital River
Pricing & access
Free tierYesNo monthly feeYesNo monthly feeYesNo monthly feeNoEnterprise only
Starting price5% + $0.50Custom quote3.5% + $0.35Custom
Tax & compliance
Merchant of recordYesYesYesYesYesYesYesYes
Tax remitted for youYesYesYesYesYesYesYesYes
Billing & checkout
Subscription billingYesDeepYesYesYesYesYesYes
Sub-$10 self-serveNoSales reviewYesYesYesYesNoEnterprise
Developer & API
REST APIFreeFreeFreeFree
WebhooksFreeFreeFreeFree
Open sourceNoNoNoNoNoNoNoNo
Scaling & support
Payout frequencyMonthlySemi-monthlyVariesMonthly
Countries supported200+200+200+240+
Worth it for
  • Full merchant of record: registers, collects, and remits sales tax and VAT globally
  • One flat 5% + $0.50 covers processing, billing, fraud, chargeback defense, and dunning
  • Mature and stable with 10+ years of operation and low platform risk
Watch out for
  • 5% + $0.50 on a $9 subscription is about 10.5% of revenue, roughly double a US-only Stripe setup
  • Products under $10 require custom sales pricing and onboarding review can take days
  • Monthly payouts are slower than FastSpring's semi-monthly schedule

Pay less for it

4 ways found
No monthly fee

You pay only when you make a sale, so there is no fixed cost at zero revenue

High-volume custom rates

Paddle negotiates rates below 5% for larger sellers through its sales team

Bill annually

Charging yearly instead of monthly cuts the number of $0.50 fixed fees you pay across a year

Cheaper swap

Creem — Same merchant-of-record tax handling at a 3.9% + $0.40 headline rate with no sub-$10 sales gate

See this for your whole stack, with your real numbers

StackTracker tracks what you actually pay for Paddle and every other tool, flags overpayment, and shows the dollars you would save by switching.

See plans

Is it the right tool for you

Pick it if
  • You sell globally and want tax and billing support fully off your plate
  • You need deep subscription logic like proration, upgrades, and dunning
  • You can absorb the 5% rate on typical price points
Skip it if
  • You sell mostly to one country and want the lowest fees → use Stripe
  • Your product is priced under $10 and you want instant self-serve onboarding → use Lemon Squeezy or Creem

Track what Paddle and the rest of your stack cost

StackTracker adds up every subscription, plus your hours, so you see the real number.

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Prices and limits last verified 2026-07-20.