Buyer guide · Payment Processors
Every platform in this piece sells your software in its own name. The buyer's statement shows Paddle or Lemon Squeezy or Gumroad, the platform charges and remits the tax, it carries the chargeback, and it pays you what is left. The service is real and the rate reflects it: where a card processor takes 2.9% plus 30 cents, a merchant of record takes 4% to 7% on a subscription, and Gumroad takes closer to 13%. This piece puts the seven merchant-of-record platforms this site has reviewed on one basis and then looks at what the headline number does not include.
The market has moved this year. Polar, which built its reputation on a 4% plus 40 cent rate, restructured on 27 May 2026 into a free plan at 5% plus 50 cents and paid plans that buy the rate back down. Stripe, which bought Lemon Squeezy in July 2024, now sells a merchant-of-record product of its own, Managed Payments, at 3.5% on top of standard processing. And Lemon Squeezy's chief executive wrote in January that his team had been building that product and would give Lemon Squeezy's own users an easy way to move to it. Figures below are from the platforms' pricing and help pages as read on 17 September 2026.
Five of the seven publish a number. Two do not.
Take a $29 monthly plan paid with a US-issued card, priced in dollars, and apply each platform's published percentage and cents. Where a platform adds a subscription surcharge it is included; where it adds an international one it is not, because the card is domestic.
For scale, doing it yourself on Stripe without a merchant of record — 2.9% + 30¢, plus Stripe Tax at 0.5% to calculate the tax, plus Stripe Billing at 0.7% to run the subscription — costs $1.49, or 5.1%. The 40 to 90 cents a month between that and a merchant of record is the price of not being the legal seller: not registering for VAT in the EU and GST in Australia, not filing, not answering the chargeback. Whether it is worth it depends entirely on how many jurisdictions you would otherwise have to register in.
Polar's paid plans need a volume check. Moving from Starter to Pro saves 1.2 points and 10 cents a transaction for $20 a month, which pays for itself at roughly $1,300 of monthly sales at a $29 ticket. Scale saves 1.6 points and 20 cents for $400 a month and breaks even somewhere above $17,000 a month. Below those lines, the free plan is cheaper despite the higher rate.
Now a single $99 purchase, priced in dollars, paid with a card issued outside the US. The subscription surcharges fall away and the international ones apply. Paddle publishes no international surcharge, Gumroad publishes none either, and Stripe's page says its 3.5% Managed Payments fee is charged in addition to its Payments fees, which include 1.5% for international cards.
Stripe on its own, with Tax but no Billing, is 4.9% + 30¢, or $5.15. The order changes: Paddle, which was mid-table on the domestic subscription, is the cheapest published merchant of record for an international one-off because it is the only one that does not add 1.5% for the card's country. If most of your buyers are outside the US, that is worth more than the half-point Dodo saves on the domestic rate.
One caveat on Paddle. Its master services agreement converts a sale taken in a currency other than your balance currency at the mid-market rate plus a margin of 2% for US dollars, euros and pounds and up to 3% for other currencies, and its help centre reserves a further margin of up to 1.5% if you take the payout in a third currency. A dollar sale into a dollar balance triggers neither. A euro sale into a dollar balance triggers the first, and at that point Paddle's 5.5% becomes 7.5%, level with Lemon Squeezy. Price your buyers in the currency you hold your balance in, or accept the margin knowingly.
The pitch of a merchant of record is that it carries the chargeback, and it does carry the liability. It does not necessarily carry the fee. Paddle's help centre puts the chargeback fee at 20 dollars, pounds or euros, or 40 Canadian or Australian dollars, deducted from your balance with the transaction amount, and states that if Paddle wins the dispute it returns the transaction amount but not the fee, because the payment provider's own charge is not refundable. The same fee applies when Paddle receives a pre-chargeback alert and refunds to head the dispute off. Polar charges $15 per dispute regardless of outcome. Dodo charges $30. Lemon Squeezy's refunds and chargebacks page says it will usually refund the buyer on your behalf and deduct the refund, less its platform fee, 'plus a $15 dispute fee from your next payout'. Gumroad charges no penalty: the creator loses the sale and the processing fee, and Gumroad returns its own share. For comparison, Stripe's dispute fee is $15, and our survey of dispute fees at nine processors found $15 to $25 typical, with only some returning it on a win.
Every platform also watches your rate. Paddle treats anything above 0.65% of transaction volume as needing remediation. Polar's terms let it suspend an account whose chargeback rate reaches about 0.7%. Dodo's master agreement lets it terminate a seller whose chargeback, cancellation or refund rate exceeds 0.5% of orders in a month, and hold a reserve sized to the seller's risk. Gumroad pauses payouts automatically above 1%. A merchant of record is pooling its sellers' risk under its own merchant account, and it manages that pool by cutting off the sellers who raise it.
Paddle pays once a month: it processes payouts on the first and sends them by the fifteenth, then up to three working days to arrive, against a threshold you set from a minimum of $100. Lemon Squeezy pays on the 14th and 28th with a $50 minimum, free to a US bank account and 1% per payout to one outside the US. Dodo pays twice a month by default with a $50 threshold. FastSpring's default is twice a month with a 14-day settlement delay on every transaction and a 45-day monitoring hold before a new account's first payout. Gumroad pays weekly after a seven-day hold, once the balance reaches $100. Polar is the exception: you withdraw manually to a Stripe Connect account, at Stripe's pass-through fees of $2 for any month with a payout plus 0.25% and 25 cents per withdrawal, and organisations created on or after 12 May 2026 wait seven days for settlement first.
Set against a card processor that pays out daily, a monthly cycle is a working-capital cost as well as a fee. A seller doing $30,000 a month through Paddle is, on average, waiting on roughly half a month's revenue at any time. That is not in the 5%, and it is the single biggest operational difference between a merchant of record and a processor.
Polar's fee page says its initial transaction fees are not refunded when an order is, because card networks and processors charge them regardless. Lemon Squeezy's help page says 'the refunded amount (minus our platform fee) will be deducted from your next payout', which leaves you level rather than out of pocket. Dodo charges $1 per refund on top. Gumroad returns its own 10% on the refunded portion and keeps only the processing part. Paddle's developer changelog says its payout API now reports a 'retained fee' on refunds and chargebacks, but we did not find a published statement of how much of its fee it keeps on a refund, so ask. On a product with a 30-day money-back guarantee and a 5% refund rate, the difference between a platform that keeps its fee and one that returns it is a quarter of a point on your blended rate.
FastSpring is the oldest company here — founded in Santa Barbara in 2005, with a BBB A- rating and the highest grade of the seven on this site, a B+ — and it publishes no rate. Its pricing page was returning a 502 error when we tried to read it on 17 September; a capture from 12 August says pricing is 'based on transaction type and your volume of business', that there is no subscription fee and no minimum volume, and that custom rates 'can be negotiated in conversation with our Sales team'. Third-party reviewers, several of them competitors, cite a baseline near 5.9% plus 95 cents, rising toward 8.9% for low-volume or higher-risk accounts. We could not corroborate that from FastSpring and present it only as reported. Its documentation does list a 2.5% currency conversion charge where your store currency and payout currency differ.
Xsolla is a merchant of record for video games specifically, the dominant option for a direct-to-player web shop that routes around a 30% app-store cut. Its marketing says a revenue share 'as low as 5%', and independent reviewers put the all-in cost between 7% and 10% once individual payment methods, currency handling and optional modules are added — again reported, not established. Its payout schedule and minimum are set per contract, and its own FAQ tells publishers who see no payout date that they have not reached the minimum in their agreement. If you are selling a game, Xsolla belongs on the list; if you are selling anything else, it does not.
Stripe Managed Payments, listed on Stripe's pricing page at 3.5% per successful transaction 'in addition to Payments fees', covers global indirect tax, fraud prevention, dispute responses and transaction-level support. It is the most expensive option on both of our bases — $2.36 on the $29 subscription, $8.12 on the $99 international sale — because it is priced as a layer on top of Stripe's full rate card rather than as a replacement for it. What it buys is staying on Stripe: the same account, the same Billing, the same dashboard, and no migration when you outgrow the merchant of record and want to become the seller yourself. Lemon Squeezy's January note that its users would be given an easy way to migrate to Managed Payments tells you where Stripe expects that platform's customers to end up.
Start from where your buyers are. If they are mostly in the US, the international surcharges are noise and Dodo's 4% or Polar's Early Member rate is the floor among published prices, with Paddle and Polar's Starter plan a point behind. If they are mostly abroad, Paddle's absence of an international surcharge makes it the cheapest published rate, provided you price in the currency you hold. If you are already on Stripe and your volume is modest, Managed Payments costs more per sale and less in switching. If you are large enough to negotiate, FastSpring and Paddle both will. And if the rate is the only thing you are looking at, read the reviews first: the cheapest published rate belongs to the youngest company here, Dodo, founded in 2024 and carrying a C+ on this site, and our explainer on who actually holds your merchant agreement sets out what you are giving up when a platform becomes the seller of record — your customers' billing relationships, stored credentials and subscriptions sit with it, and leaving is a migration, not a cancellation.
