"Stripe is 2.9%. Paddle is 5%. Stripe is cheaper. End of discussion."
I hear this all the time. And it's wrong ā or at least, it's incomplete. The break-even point where Paddle actually becomes cheaper than Stripe is lower than most founders think.
The Hidden Costs of Stripe
Stripe's 2.9% + $0.30 is only the processing fee. Here's what you're actually paying when you sell globally:
CostStripePaddleProcessing fee2.9% + $0.305% + $0.50International cards+1.5%IncludedCurrency conversion+1%IncludedStripe Tax (VAT)+$0.50/transactionIncludedChargeback fee$15 eachIncludedVAT filingYour accountantIncluded
A European customer paying with a non-USD card on Stripe actually costs you: 2.9% + 1.5% + 1% + $0.30 + $0.50 = 5.4% + $0.80 per transaction.
That's already more expensive than Paddle's 5% + $0.50.
The Real Break-Even Math
I modeled this across different MRR levels with realistic assumptions (40% international customers, 2% chargeback rate, monthly VAT filing cost of $200 if you handle it yourself):
At $5K MRR:
Stripe total effective cost: ~$340/mo (6.8%)
Paddle: ~$300/mo (6.0%)
Winner: Paddle by $40/mo
At $25K MRR:
Stripe total: ~$1,450/mo (5.8%)
Paddle: ~$1,375/mo (5.5%)
Winner: Paddle by $75/mo
At $100K MRR:
Stripe total: ~$5,200/mo (5.2%)
Paddle: ~$5,050/mo (5.05%)
Winner: Paddle by $150/mo ā but it's close
The surprise: Paddle is cheaper than "real" Stripe (with tax handling) at almost every scale for global SaaS.
So Why Does Anyone Use Stripe?
Because cost isn't everything. Here's the honest trade-off:
Choose Stripe if:
Your customers are mostly US/domestic (no international card surcharge)
You want full control over your checkout experience
You need Stripe Connect for marketplace payments
You're B2B and invoicing, not card payments
You already have a tax solution (Avalara, TaxJar)
Choose Paddle if:
You sell to consumers or small businesses globally
You don't want to deal with VAT registration in 30+ countries
You're a solo founder and "merchant of record" sounds like a nightmare
You want to launch in the EU without an EU entity
Choose Lemon Squeezy if:
Same reasons as Paddle, but you prefer their UI/UX
You're selling digital products, courses, or subscriptions
Pricing is identical to Paddle (5% + $0.50)
The Merchant of Record Advantage
This is the part most comparisons skip. Paddle and Lemon Squeezy are "Merchants of Record" ā they're legally the seller. This means:
They handle VAT/sales tax in 100+ countries. You don't register, you don't file, you don't worry about EU VAT thresholds.
Chargebacks are their problem. You never see the $15 fee.
Refunds are cleaner. They handle the tax reversal.
You don't need an EU entity to sell in Europe without triggering VAT obligations.
For a solo founder selling a $29/mo SaaS globally, this saves 5-10 hours/month in tax compliance. What's your hourly rate?
Calculate Your Exact Fees
I built a calculator where you plug in your MRR and transaction count to see exact fees across Stripe, Paddle, Lemon Squeezy, and PayPal:
š Payment Processor Fee Calculator
It shows raw fees only ā but now you know to add the international/tax costs for Stripe mentally.
What I Use
I started with Stripe (because everyone says "just use Stripe"), hit my first EU VAT registration requirement at $10K MRR, panicked, and switched to Lemon Squeezy in a weekend. My effective fee went from ~6.2% to 5.5%, and I stopped spending 3 hours/month on tax spreadsheets.
No regrets. The 2.1% headline difference between Stripe and Paddle is a mirage once you factor in the real costs of global payments.
Top comments (2)
Good breakdown, but there's a third category missing: open banking payments. No card network, no interchange, no chargebacks. Total processing cost is 0.1ā0.3% depending on volume, instant bank-to-bank settlement, and no merchant-of-record complexity because there's no card issuer in the chain.
The caveat: it only works where open banking infrastructure is mature ā UK is there, EU is catching up, US is early. If you're a UK/EU SaaS founder selling to businesses, this row is missing from your comparison table.
Great point ā open banking is a blind spot in most payment comparisons
and you're right that 0.1-0.3% with no chargebacks changes the math
completely for UK/EU SaaS.
I'm actually planning to add an open banking row to the payment
calculator. Do you have experience with any specific providers
(GoCardless, Plaid, TrueLayer)? Would help me get the pricing
tiers right.
Thanks for the follow too!