Paddle vs. Stripe
Paddle vs Stripe: which is better?
Paddle and Stripe solve different problems. Paddle is a Merchant of Record: it becomes the seller and handles sales tax for you. Stripe is a payment processor with billing and tax products you add, and you stay the merchant unless you use its Managed Payments. We compare them using each vendor’s own documentation.
Billing
Usage-based billing
Private preview in 2027
100M events a month
Tax calculation
Yes
Stripe Tax, 0.5%
Payments
Failed payment retries
Paddle Retain
Smart Retries
Bring your own processor
No
Through your own integrations
Multi-processor routing
No
Private preview
Revenue and reporting
Platform
Where they differ.
1. Merchant of Record or payment processor.
Paddle is a Merchant of Record. It’s the legal seller, so it calculates, collects and remits taxes for you, takes on payment liabilities and handles buyer billing support. Your name appears on card statements alongside Paddle’s.
Stripe is a payment processor, so you stay the merchant and handle tax registration and filing yourself. Stripe Tax calculates and collects tax, and Stripe Managed Payments acts as Merchant of Record for digital products sold through Checkout or Payment Links.
Paddle
Paddle is the legal seller: it remits tax and handles buyer billing support.
VS
Stripe
You stay the merchant. Stripe Tax and Managed Payments are optional extras.
2. Pricing.
Paddle’s single rate is 5% + 50¢ per transaction, covering tax compliance, fraud protection and buyer support. On Stripe, you pay card processing fees plus 0.7% for Billing and 0.5% for Tax on its no-code plan, or 3.5% on top of processing for Managed Payments.
Which costs less depends on your volume, where you sell and how much tax work you’d otherwise take on. On our maths, at $1M a month in transactions, Paddle’s percentage alone is $50,000 a month.
Paddle
5% + 50¢ per transaction, all-inclusive. Custom pricing for high volume.
VS
Stripe
Processing fees plus 0.7% for Billing and 0.5% for Tax, or 3.5% more for Managed Payments.
3. Payments and portability.
Paddle processes every payment itself, routing across its own acquirers, with no documented option to bring your own processor. If you leave, it transfers card details to your new provider’s vault on request, within two weeks.
Stripe is the processor. Stripe Billing can manage subscriptions on other processors if you build the integrations, and Stripe exports card data to another PCI DSS Level 1 processor on request.
Paddle
Paddle’s own acquirers. Card details transferred out on request within two weeks.
VS
Stripe
Stripe processing, with other processors through your own integrations. Card export to PCI Level 1 processors.
4. What you can sell.
Paddle is built for software companies, including SaaS, consumer software and games, and lists physical products as prohibited.
Stripe’s processing and Billing work for physical and digital goods. Its Managed Payments option, like Paddle, covers digital products only.
Paddle
Software, apps and games. Physical products prohibited.
VS
Stripe
Physical and digital goods. Managed Payments covers digital products only.
Pricing.
Paddle pricing.
Paddle charges 5% + 50¢ per checkout transaction, with no monthly fees, according to Paddle’s pricing page (checked 11 November 2026). That covers payments, checkout, billing, global tax compliance, fraud protection, chargebacks and buyer support.
Custom pricing for high-volume businesses is available through sales, and Paddle may add a currency conversion margin of up to 1.5% on payouts.
Stripe pricing.
Stripe’s card processing fees vary by country and are listed on Stripe’s pricing page. Stripe Billing adds 0.7% of Billing volume on pay-as-you-go, or 0.67% above each tier on annual plans.
Stripe Tax costs 0.5% per transaction on its no-code plan. Stripe Managed Payments, its Merchant of Record option for digital products, adds 3.5% per transaction on top of processing fees.
The real cost comparison.
Neither price tag tells the full story. Paddle’s fee includes tax compliance, while on Stripe you add Billing and Tax to processing fees. Both leave a help desk, marketing and reporting to separate tools, and that combined cost is the number to compare with OpenByte.
When Paddle is the better choice.
You want sales tax handled for you.
As the legal seller, Paddle calculates, collects and remits sales tax and VAT, so you don’t register in each country yourself.
You want one all-in fee.
Paddle’s 5% + 50¢ covers payments, billing, tax compliance, fraud protection, chargebacks and buyer support.
You want dunning and cancel flows alongside billing.
Paddle Retain handles failed payments and cancel flows as part of Paddle’s billing.
When Stripe is the better choice.
You want to stay the merchant.
With Stripe you own the payment relationship and customer data, and add Tax or Managed Payments only where you need them.
You sell physical goods.
Stripe’s processing and Billing work for physical products, which Paddle prohibits.
Your engineers want to build billing themselves.
Stripe Billing is API-first, with Smart Retries, up to three recovery automations and 100M usage events a month included.
Why teams choose OpenByte instead.
Both answer a narrower question.
Paddle vs Stripe is a choice between handing off the sale and assembling it yourself. For high-volume subscription brands, the harder problem comes next: billing in one tool, support in another, marketing in a third, and a failed renewal pieced together across all of them.
OpenByte keeps you as the merchant and puts payments, billing, support, marketing and customer data in one system.
What changes with one platform.
Recovery that sees the whole customer. Retries, card updates, cancel flows and win-back campaigns draw on billing, support and marketing history, so a loyal customer isn’t treated like a stranger.
Renewals that can change provider. Payment orchestration routes and retries renewals across several providers, Stripe included. Paddle routes payments across its own acquirers, and Stripe’s own multi-processor Orchestration is in private preview.
Support with billing context. Every ticket shows payment history, entitlements and account status, with no integration to build or maintain.
Built for volume. OpenByte manages 350M+ customer records for high-volume subscription brands, from antivirus to wellness apps.
Frequently asked questions.
Is Paddle or Stripe better?
Is Paddle a Merchant of Record and Stripe not?
Which is cheaper, Paddle or Stripe?
Does Stripe handle sales tax?
Can I sell physical products with Paddle?
Can I move from Paddle to Stripe?
Do Paddle or Stripe include customer support tools?
Is there an alternative to both Paddle and Stripe?
About this comparison: all information about Paddle and Stripe comes from each company’s website and documentation, checked on 11 November 2026. Pricing calculations are our own, from published rates. Features and pricing change, so check each company’s website. Both are trademarks of their owners, and OpenByte isn’t affiliated with either. Spotted something out of date? Let us know.
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