Stripe vs Paddle for Solo Developers

Quick Comparison

Stripe Overview

Stripe is the payment platform every developer recommends for a reason. The API documentation is the gold standard of the industry. Every endpoint is explained with examples in multiple languages, and the test mode lets you simulate any scenario before going live.

Stripe handles everything: one-time payments, subscriptions, invoicing, payment links, and checkout sessions. The Stripe Checkout product gives you a hosted payment page that you can set up in an hour. For more control, the Elements library lets you embed payment forms directly in your app.

I've integrated Stripe into multiple projects. The webhook system is robust, the dashboard gives you clear visibility into payments, and the developer experience is exceptional. The downside is that Stripe is a payment processor, not a merchant of record. That distinction matters a lot for solo developers selling globally.

Paddle Overview

Paddle is a Merchant of Record (MoR), and that single difference changes everything about how you sell software. When a customer buys through Paddle, Paddle is the legal seller. They handle sales tax, VAT, GST, and compliance in every country. You receive a single payout with all tax obligations already handled.

For a solo developer, this means you don't need to register for VAT in the EU, collect state sales tax in the US, or figure out GST in Australia. Paddle does it all. You focus on building your product. They handle the global tax nightmare.

Paddle's checkout is clean and supports credit cards, PayPal, Apple Pay, and wire transfers. The subscription management handles upgrades, downgrades, prorations, and cancellations. The dashboard shows revenue, MRR, churn, and tax collected in one view.

Key Differences

Merchant of Record vs. payment processor. This is the fundamental difference. Stripe processes payments on your behalf. You are the merchant, which means YOU handle tax collection, VAT compliance, invoicing, and refund policies. Paddle is the merchant. They collect taxes, issue invoices, handle chargebacks, and comply with local regulations. For a solo developer selling globally, this is a massive operational burden that Paddle removes entirely.

Transaction fees. Stripe charges 2.9% + $0.30. Paddle charges 5% + $0.50. On a $50 subscription, Stripe takes $1.75 and Paddle takes $3.00. That's significant. But factor in the cost of tax compliance: tools like TaxJar ($99/month), accounting time, and the risk of getting it wrong. Paddle's higher fee often costs less than handling taxes yourself.

API flexibility. Stripe's API is vastly more flexible. Custom payment flows, metered billing, usage-based pricing, marketplace payouts, Connect for platforms, and hundreds of other features. Paddle's API is focused on subscriptions and one-time purchases for software. If you need complex payment flows, Stripe is the only option.

Checkout experience. Stripe Checkout is fast and customizable with support for dozens of payment methods. Paddle's checkout overlay appears on top of your site, which some customers find jarring. Paddle has improved this with inline checkout, but Stripe's checkout flexibility is still superior.

Subscription management. Both handle subscriptions well. Stripe gives you granular control over billing cycles, prorations, trials, and invoicing. Paddle provides similar features with less configuration. For standard subscription SaaS, Paddle's simpler approach is actually an advantage. Less configuration means fewer bugs.

Payout timing. Stripe pays out on a rolling basis (typically 2-7 days after a transaction). Paddle pays on a fixed schedule (monthly by default, with options for more frequent payouts). Stripe's faster access to funds is better for cash flow. Paddle's batched payouts simplify accounting.

Global selling. Paddle handles localized pricing, currency conversion, and regional payment methods automatically. With Stripe, you configure all of this yourself. If you're selling to customers worldwide, Paddle's approach is significantly simpler.

When to Choose Stripe

• You want the lowest transaction fees (2.9% + $0.30)
• You need complex payment flows beyond simple subscriptions
• You're comfortable handling tax compliance yourself or using tools like TaxJar
• You're building a marketplace, platform, or usage-based billing model
• API flexibility and customization are priorities

When to Choose Paddle

• You're selling SaaS or digital products globally
• Tax compliance sounds like a nightmare you want to avoid entirely
• You prefer paying a higher fee over managing VAT/GST/sales tax
• Your payment flows are standard (subscriptions + one-time purchases)
• You want invoicing and tax receipts handled automatically

The Verdict

For solo developers selling SaaS globally, Paddle is the smarter choice. The 5% + $0.50 fee is higher than Stripe, but the cost of handling global tax compliance yourself (tools, time, risk of penalties) almost always exceeds the fee difference. Paddle lets you focus on building while they handle the legal and financial overhead.

Stripe is the choice when you need maximum flexibility. Complex billing models, marketplace payments, usage-based pricing, or custom payment flows all require Stripe's API. If your payment needs go beyond subscriptions and one-time purchases, Stripe is the only realistic option.

My recommendation: if you're a solo developer launching a SaaS with subscription pricing, start with Paddle. The tax compliance alone is worth the fee premium. If your product grows and you need billing flexibility that Paddle can't provide, migrate specific payment flows to Stripe. Many successful SaaS products have made exactly this transition.