Question 1

Which payment processor has the lowest fees?

Accepted Answer

For US domestic cards, Braintree (2.59% + $0.49) and Stripe (2.9% + $0.30) typically have the lowest per-transaction fees among gateways. Among Merchants of Record, 2Checkout (3.5% + $0.35) and Dodo Payments (3.9% + $0.30) are most competitive. However, fee alone is not the only factor — tax handling, compliance, and chargeback protection change the real cost.

Question 2

What is a Merchant of Record?

Accepted Answer

A Merchant of Record (MoR) is a company that legally sells your products to customers on your behalf. They handle global tax collection (VAT/GST), sales tax remittance, payment fraud liability, and chargeback disputes. Paddle, Lemon Squeezy, Dodo Payments, PayPro Global, and FastSpring are popular MoR providers for SaaS companies.

Question 3

Should I use Paddle or Stripe for my SaaS?

Accepted Answer

Stripe charges 2.9% + $0.30 with full flexibility but requires you to handle tax compliance and fraud. Paddle charges 5% + $0.50 but acts as merchant of record, managing all taxes and compliance globally. For international sales with minimal operational overhead, Paddle is often worth the higher fee. For US-focused businesses with engineering resources, Stripe gives more control at lower cost.

Question 4

What are Dodo Payments fees?

Accepted Answer

Dodo Payments charges 3.9% + $0.30 per transaction. It's a Merchant of Record platform positioned as a lower-cost alternative to Paddle (5% + $0.50) and Lemon Squeezy (5% + $0.50), while still providing MoR benefits like tax handling and chargeback protection.

Question 5

What are PayPro Global fees?

Accepted Answer

PayPro Global charges 5.9% + $0.95 per transaction as a Merchant of Record platform. It focuses on software and SaaS companies needing global compliance, localized checkout, and subscription management.

Question 6

Are international card fees higher?

Accepted Answer

For payment gateways like Stripe and Braintree, international cards incur an additional 1.5% surcharge. Merchants of Record generally include international card processing in their standard rate since they already price in global compliance overhead.

Question 7

What happened to Lemon Squeezy?

Accepted Answer

Lemon Squeezy was acquired by Stripe in 2024. It continues to operate as a standalone Merchant of Record platform with fees of 5% + $0.50. It's popular with indie developers selling software licenses, digital downloads, and SaaS tools due to its simple setup and built-in affiliate tools.

Question 8

How is the net revenue calculated after payment processor fees?

Accepted Answer

Net = Amount − (Amount × fee%) − fixed fee. For a $100 Stripe transaction: $100 − ($100 × 2.9%) − $0.30 = $100 − $2.90 − $0.30 = $96.80 net received. For Paddle at $100: $100 − ($100 × 5%) − $0.50 = $100 − $5.00 − $0.50 = $94.50 net received.

	#	Provider	Rate	Fee / txn	Net / txn	% fee	Monthly fees	Monthly net	Annual net
Payment Gateways
		Braintree (PayPal)Gateway	2.89% + $0.29	−$3.18	$96.82	3.2%	−$318.00	$9,682.00	$116,184.00
	2	StripeGateway	2.9% + $0.30	−$3.20	$96.80	3.2%	−$320.00	$9,680.00	$116,160.00
Merchant of Record (MoR)
	1	2Checkout (Verifone)MoR	3.5% + $0.35	−$3.85	$96.15	3.9%	−$385.00	$9,615.00	$115,380.00
	2	Dodo PaymentsMoR	4% + $0.40	−$4.40	$95.60	4.4%	−$440.00	$9,560.00	$114,720.00
	3	Polar.shMoR	4% + $0.40	−$4.40	$95.60	4.4%	−$440.00	$9,560.00	$114,720.00
	4	FreemiusMoR	4.7% + gateway	−$4.70	$95.30	4.7%	−$470.00	$9,530.00	$114,360.00
	5	PayPro GlobalMoRCustom	% + $	−$5.40	$94.60	5.4%	−$540.00	$9,460.00	$113,520.00
	6	PaddleMoR	5% + $0.50	−$5.50	$94.50	5.5%	−$550.00	$9,450.00	$113,400.00
	7	Lemon SqueezyMoR	5% + $0.50	−$5.50	$94.50	5.5%	−$550.00	$9,450.00	$113,400.00
	8	FastSpringMoRCustom	% + $	−$6.85	$93.15	6.9%	−$685.00	$9,315.00	$111,780.00
	9	GumroadMarketplace	10% + $0.50	−$10.50	$89.50	10.5%	−$1,050.00	$8,950.00	$107,400.00

Feature	BraintreeGateway	StripeGateway	2CheckoutMoR	DodoMoR	PolarMoR	FreemiusMoR	PayProMoR	PaddleMoR	LemonSq.MoR	FastSpringMoR	GumroadMarketplace
Tax handling (VAT/GST)
US sales tax
Chargeback liability
Fraud protection
Subscription management
License key delivery
Affiliate tools
Revenue recovery (dunning)
Localized checkout
Multiple payment methods
Developer APIs
Setup difficulty	Complex	Complex	Medium	Easy	Easy	Easy	Medium	Easy	Easy	Medium	Easy
Best for	Enterprise	SaaS / High-growth	Global SaaS	Indie / SaaS	OSS / Indie devs	SaaS / WP plugins	Enterprise SaaS	SaaS / Indie	Indie devs	Enterprise	Creators

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