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Stripe vs Paddle vs Lemon Squeezy: Which to Use for Selling Software

Stripe vs Paddle vs Lemon Squeezy: fees, merchant of record, sales tax, and Stripe Managed Payments as of September 2026. Which fits selling SaaS and software.

Mythex Team · 2026-09-29 · 7 min read

Choose Stripe if you want the lowest processing fee and full control, and you're prepared to handle sales tax and VAT yourself (or with Stripe Tax). Choose Paddle if you sell software or SaaS worldwide and want a merchant of record to take on tax, fraud and chargebacks for one all-in fee. Lemon Squeezy offers a similar merchant-of-record deal with built-in license keys, affiliates and email marketing, but its 2026 update points users toward Stripe Managed Payments, Stripe's own merchant-of-record product, which is now a fourth option to weigh.

At a glance

Check Stripe pricing, Paddle pricing and Lemon Squeezy pricing for the latest.

How we compared

We compared the publicly stated fees, features and eligibility rules on Stripe's, Paddle's and Lemon Squeezy's own websites and documentation as of September 2026. We did not process payments with any of them, and we left out anything we couldn't confirm on the vendors' pages. Paddle and Lemon Squeezy publish one headline fee; Stripe's fees depend on the country your business is based in, so we quote Stripe's fee only for the United States (from Stripe's support site) and note the United Arab Emirates rate where relevant. This isn't tax or legal advice; check local rules or ask an adviser.

The key idea: merchant of record

When you sell software to customers in many countries, each country may expect you to charge and file its sales tax, VAT or GST. Keeping track of that is real work.

A merchant of record (MoR) is the company that legally sells to your customer. If a provider is your MoR, it charges the right tax at checkout, files and pays it, and deals with refunds and chargebacks. You get paid out, minus its fee. That's what Paddle, Lemon Squeezy and Stripe Managed Payments offer.

With standard Stripe, you're the merchant of record. Stripe processes the payment, but tax registration, collection and filing are your job. Stripe Tax can help you manage it.

So the real comparison is: a lower processing fee plus your own tax work, or a higher all-in fee with tax handled for you.

Stripe (standard)

Stripe is a payments platform with hosted Checkout, Payment Links, Stripe Billing for subscriptions, Stripe Tax, and detailed developer documentation.

• Fees (as of September 2026): in the US, 2.9% + $0.30 per successful card payment. In the UAE, 2.9% + AED 1.00 for domestic cards, plus 1% for international cards and 1% when currency conversion is needed, with no setup or monthly fees on standard pricing. Stripe Billing adds a percentage of billing volume on pay-as-you-go pricing.
• Strengths: lowest headline fee of the options here; sells physical and digital goods; marketplaces and platforms via Stripe Connect; very flexible.
• Limits: you're responsible for tax compliance. As you sell into more countries, that can mean registrations and filings.
• Pick it if you mainly sell in one country, sell physical goods or services, run a marketplace, or already have tax handled.

Stripe Managed Payments

Managed Payments is Stripe's merchant-of-record product for digital goods. According to Stripe's documentation, it handles sales tax, VAT and GST compliance in more than 80 countries, plus fraud prevention, dispute management and transaction-level customer support.

• Fee (as of September 2026): Stripe says it adds 3.5% per successful transaction on top of standard Stripe processing fees. In the US, that's 6.4% + $0.30 on a standard card payment.
• What you can sell: digital products such as software, SaaS, video games, digital media and online courses. It doesn't support physical goods, professional services such as consulting or development, or live in-person events.
• Who can use it: businesses based in supported locations, which include the US, Canada, the UK, most of the EU plus Norway and Switzerland, Australia, Hong Kong, Japan and Singapore. Stripe also runs an eligibility review. The UAE isn't on the list as of September 2026.
• Limits: it works through Stripe Checkout and Payment Links; Stripe Connect platforms and some advanced integrations aren't supported.
• Pick it if you already like Stripe, sell a digital product, are based in a supported country, and want tax handled.

Paddle

Paddle is a merchant of record for digital product businesses: SaaS, software, apps and games. It covers payments, subscriptions, localised checkout, sales tax and regulatory compliance, fraud protection and failed-payment recovery.

• Fee (as of September 2026): 5% + 50¢ per checkout transaction, with no monthly fee. Paddle asks businesses selling products under $10, or needing invoicing, to contact it for custom pricing, and offers custom pricing for larger businesses.
• Strengths: one all-in fee including tax compliance; built for subscriptions and B2B billing; focused on software companies.
• Limits: higher fee per sale than standard Stripe; focused on digital products; the 50¢ fixed part hurts on very cheap products.
• Pick it if you sell SaaS or software internationally and want to hand off tax and payment compliance completely.

Lemon Squeezy

Lemon Squeezy is a merchant of record for software companies and digital creators. It supports subscriptions, one-off digital downloads, automatic software license keys, affiliate tools and email marketing.

• Fee (as of September 2026): 5% + 50¢ per transaction, with no monthly charges for ecommerce features. Lemon Squeezy notes that some payments may have additional fees, including small extra fees for transactions made outside the US.
• Strengths: license keys, affiliates and email marketing built in, which suits indie software and digital products.
• Status: Lemon Squeezy's 2026 update says the team has been building Stripe Managed Payments and talks about Lemon Squeezy users moving over to Stripe, with no fixed timeline. Sign-up is still offered on its site as of September 2026.
• Pick it if you want license keys and affiliates in one place, and you're comfortable that you may move to Stripe Managed Payments later. If you're starting fresh and eligible, compare Stripe Managed Payments directly.

What the fees look like on a $20 sale

Using the US figures above, for a single $20 card payment (before any international or currency extras):

With standard Stripe, remember to add the cost of doing tax yourself: your time, any tax software, and registrations where you're required to collect. On a $10 product, the fixed 50¢ makes Paddle and Lemon Squeezy relatively more expensive; Paddle asks you to contact it about pricing for products under $10.

Who each one suits

• Stripe (standard): businesses selling mainly in one country, anyone selling physical goods or services, marketplaces, and teams with tax already handled.
• Stripe Managed Payments: eligible digital-product businesses in supported countries that want Stripe's tools with tax handled.
• Paddle: SaaS and software companies selling worldwide that want a dedicated merchant-of-record partner, including for B2B billing.
• Lemon Squeezy: indie developers and creators who want license keys, affiliates and email marketing bundled, and who have read its 2026 update.

If you're pricing a new product, how to price a SaaS product helps you set plans before you pick a provider, and how to start a SaaS business covers the bigger picture.

Adding payments to an app you build with Mythex

Mythex doesn't include a built-in payment system: you bring your own provider and keys, and the AI agent wires it into your app. For Stripe, you add your keys as project secrets, ask the agent to add Checkout, test in Preview with Stripe's test cards, then publish. See the Stripe recipe. Paddle and Lemon Squeezy both offer checkouts and APIs you can integrate the same way; just ask the agent and give it their docs. Our guide on how to add payments to your app covers checkout, webhooks and test mode in plain terms.

Verdict

• Standard Stripe is the cheapest per sale and the most flexible, and the right call if tax is simple for you or you sell things a merchant of record won't cover.
• Stripe Managed Payments is the natural pick for eligible digital businesses that want tax handled but prefer to stay on Stripe.
• Paddle is the established choice for software companies selling globally that want to hand off tax and compliance for one fee.
• Lemon Squeezy still has useful built-in extras, but its future is tied to Stripe Managed Payments, so weigh that before you build on it.

For a simpler two-way comparison of payment processors, see Stripe vs PayPal.