Payments Paid

Paddle

The complete payments infrastructure for SaaS

Merchant of record that handles payments, tax, subscriptions, and compliance. Sell globally with one integration, no tax headaches.

Visit Paddle →
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Paddle is a merchant of record (MoR) built specifically for B2B SaaS. They handle payments, tax compliance, fraud, invoicing, and subscription billing so you can focus on building your product.

Why Use Paddle

Enterprise-Grade MoR: Paddle is the merchant of record, meaning they're the legal seller. They handle all tax collection, remittance, and compliance across 200+ countries. You get a clean payout with zero tax paperwork.

Built for SaaS: While Lemon Squeezy targets digital products broadly, Paddle is laser-focused on SaaS subscriptions. The features are built for recurring revenue businesses.

Revenue Recovery: Paddle's dunning system recovers failed payments aggressively. They claim 15-20% recovery rate, which can save thousands in lost revenue.

Global from Day One: Accept payments in 25+ currencies, handle VAT/GST automatically, and sell to any country without setup. Paddle handles the complexity.

Key Features

  • Tax Compliance - Automatic VAT, GST, sales tax in 200+ countries
  • Subscription Billing - Recurring payments with smart dunning
  • Revenue Recovery - Recover failed payments automatically
  • Invoicing - EU-compliant invoices generated automatically
  • Risk Management - Built-in fraud detection
  • Price Localization - Show prices in local currency
  • Checkout Experience - Optimized, branded checkout
  • Customer Portal - Self-service subscription management
  • Retain - Tools to reduce churn
  • Analytics - Revenue metrics and cohort analysis

Pricing

5% + payment processing (similar to Lemon Squeezy):

  • 5% of gross revenue
  • Plus payment processing fees (~2-3%)
  • No monthly fees, no hidden costs
  • Volume discounts available at scale

Example:

  • Sell a $99/month SaaS subscription
  • Paddle fee: $4.95 (5%)
  • Payment processing: ~$2.97 (3%)
  • You receive: ~$91.08 (92%)

Perfect For

  • B2B SaaS products
  • Subscription-based businesses
  • Companies selling globally
  • Teams that want to focus on product, not billing
  • EU sales (VAT is automatically handled)
  • Growing businesses (Paddle scales well)
  • Products with high LTV

What Makes Paddle Different

vs Stripe: Paddle handles tax compliance and is the seller of record. Stripe is just payment processing.

vs Lemon Squeezy: Paddle is more focused on SaaS and recurring revenue. Better analytics, better dunning, more enterprise features.

vs Chargebee/Recurly: Paddle is MoR + billing platform. Others are just billing platforms (you still need Stripe and handle taxes).

Code Example

// Initialize Paddle
Paddle.Setup({ vendor: 12345 });

// Open checkout
Paddle.Checkout.open({
  product: 789,
  email: 'customer@example.com',
  passthrough: JSON.stringify({ user_id: '12345' }),
  successCallback: (data) => {
    // Handle successful payment
    console.log('Payment completed:', data);
  }
});

// Or use overlay checkout
<button class="paddle_button" data-product="789">
  Subscribe Now
</button>

Paddle vs Stripe + Tax Solution

Traditional Setup (Stripe + Quaderno/Taxjar):

  • Stripe: Payment processing
  • Quaderno: Tax calculation and invoices
  • You: Still file tax returns
  • Total fees: ~3-4% + $200-500/month
  • Your time: 5-10 hours/month

Paddle:

  • Everything in one platform
  • Total fees: ~8% all-in
  • Your time: 0 hours (they handle everything)

Trade-off: Pay more in fees, save all the time and complexity.

Paddle vs Lemon Squeezy

Both are merchants of record, but:

Choose Paddle if you:

  • Build B2B SaaS specifically
  • Need sophisticated subscription features
  • Want better revenue analytics
  • Need enterprise features (SSO, custom contracts)
  • Sell primarily to businesses
  • Want aggressive dunning/recovery

Choose Lemon Squeezy if you:

  • Sell digital products (courses, ebooks)
  • Have simpler billing needs
  • Prefer more modern developer experience
  • Want pay-what-you-want pricing
  • Have smaller transactions
  • Prefer indie-friendly brand

Paddle is more corporate/professional. Lemon Squeezy is more indie/friendly.

Subscription Management

Paddle handles:

  • Upgrades and downgrades
  • Proration automatically
  • Trial periods
  • Coupons and discounts
  • Quantity-based pricing
  • Add-ons and features
  • Annual vs monthly billing
  • Pausing subscriptions

All without you writing billing logic.

Revenue Recovery (Dunning)

When a payment fails:

  1. Paddle automatically retries with smart timing
  2. Sends email reminders to customer
  3. Updates payment method if possible
  4. Continues retrying for weeks
  5. Recovers 15-20% of failed payments

For a $10K MRR business, that's $1,500-2,000/month saved.

The Tax Compliance Value

Selling SaaS globally means:

  • VAT in EU (27 countries, different rules)
  • GST in Australia, India, Singapore, etc.
  • Sales tax in US (50 states)
  • Tax thresholds and registration requirements
  • Quarterly/annual filing in each jurisdiction

Cost to do it yourself:

  • International tax accountant: $3,000-10,000/year
  • Tax software: $2,000-6,000/year
  • Your time: Months of learning and ongoing work
  • Risk of non-compliance: Fines and penalties

With Paddle: They handle all of it. You get clean payouts.

Customer Experience

Customers see:

  • Paddle as the seller (not your company name)
  • Professional checkout with your branding
  • Invoices with Paddle as merchant
  • Paddle support for billing questions

The Trade-off: Your brand isn't the seller of record. Some companies dislike this. Others love outsourcing support.

Integration With Other Tools

Works with:

  • Zapier - Connect to thousands of apps
  • Segment - Send events to analytics tools
  • Slack - Get notifications for events
  • Webhooks - Real-time event notifications
  • CRMs - Integrate with Salesforce, HubSpot, etc.

Common Setup

Typical SaaS flow:

  1. Create products/plans in Paddle dashboard
  2. Add checkout button to your site
  3. Handle webhook for subscription activation
  4. Grant access in your app
  5. Paddle handles billing, invoices, tax, everything

Webhook example:

// Handle subscription created
if (event.alert_name === 'subscription_created') {
  const userId = event.passthrough; // Your user ID
  const planId = event.subscription_plan_id;

  // Activate subscription in your database
  await activateSubscription(userId, planId);
}

Limitations

What Paddle doesn't do well:

  • Flexible payment flows (less customizable than Stripe)
  • Very small transactions (high percentage fee)
  • Non-subscription products (better options exist)
  • Instant payouts (they batch them)
  • Full control over customer data

Payouts

  • Monthly payouts (1st week of each month)
  • Minimum payout: $500
  • Bank transfer or PayPal
  • Net settlement (after refunds)

When to Use Paddle

Use Paddle if:

  • You're building a subscription SaaS
  • You sell globally (especially EU)
  • You're solo or small team
  • You hate accounting and taxes
  • Revenue recovery matters to you
  • You want one integration

Skip Paddle if:

  • You need super flexible billing
  • You want lowest possible fees
  • You need instant payouts
  • Your finance team can handle taxes
  • You need Stripe-level customization

Migration from Stripe

Paddle offers migration support:

  1. Keep existing Stripe customers
  2. New customers go through Paddle
  3. Gradually migrate if desired
  4. Or run both (not ideal but possible)

Tips for Solo Builders

  • Start with Paddle if you're selling globally
  • Use their checkout (don't build custom)
  • Set up webhooks properly (critical)
  • Enable customer portal for self-service
  • Use their analytics to track MRR
  • Let them handle support for billing questions
  • Review their suggestions for pricing/positioning

Price Localization

Paddle shows prices in local currency automatically:

  • US customers see USD
  • EU customers see EUR
  • UK customers see GBP

This increases conversion vs showing only USD.

The 5% Fee Decision

"5% seems high compared to Stripe's 2.9%"

True at face value, but:

At $10K MRR:

  • Stripe fees: $290/month

  • Tax software: $200/month

  • Accountant: $300/month

  • Total: $790/month (7.9%)

  • Paddle fees: $500/month (5%)

  • Everything included

  • Total: $500/month (5%)

Plus your time saved is worth thousands per month.

The Verdict

Paddle is expensive but worth it for B2B SaaS selling globally. The 5% fee pays for itself in time saved and peace of mind.

If you're a solo founder building subscription software and selling to multiple countries, Paddle removes massive complexity. You won't become a tax expert or waste weekends on compliance.

The developer experience isn't as smooth as Stripe, and you give up some control. But for most solo builders, outsourcing billing/tax to Paddle means more time building product and acquiring customers.

If your SaaS grows to $100K+ MRR, you might revisit and migrate to Stripe with a finance team. But many companies stick with Paddle at $1M+ ARR because it just works.