Stripe vs Paddle

I've been using FastSpring for more than 10 years. I chose them because I'm located in EU I didn't want to deal with all the tax complexities.
They work exactly like Paddle, and they have the exact same fees. Their API is good.
But obviously, there are things I'm not happy with, and that's why I found this thread by looking at alternatives.
I've got 3 SaaS using FastSpring, so switching would be a real pain. However, there are things they have never improved over the years, like their integration with other products.
For affiliates, they are a real nightmare. They have integrated with Impact, which is a behemoth of complexity. This creates a huge friction.
Their integration with GA4 is broken. They haven't fixed it in nearly 1 year. This is not acceptable.

I'm long-time Paddle user and it's worth every cent for me. Especially if you're located in EU. Dealing with VAT is a nightmare. I want to just sleep well. Yes, it's a bit more expensive but for me it doesn't matter because it gives me real value for the money.

Hey Robert,

Great post. I actually wrote up a comparison of a few different services based around the hassle of VAT just after you posted this: https://www.ianwootten.co.uk/2021/02/23/comparing-vat-solutions-for-bootstrapped-uk-businesses/

Included in that post is a spreadsheet where you can adjust your prices and see how your revenue is affected with one of the payment providers: https://docs.google.com/spreadsheets/d/1gwPkVYfPAxfCSPyjamtdKemSJZ3T5V3hzH4GeYNti9A/edit?usp=sharing

If you start, Paddle is great. The worse thing about Paddle is that it took me a couple of purchases before I realised that they didn't create those services.

VAT is not that difficult. You need to add a dropdown to pick a country, and add relevant multiplier to the price. That's it.

In general, it's an amazing problem to have. It means that you have sales.

Two things: Stripe has VAT handling in beta; and pick your long term relationship wisely!

My major concern with Paddle is being locked in. They'll own the customer relationship for recurring payments. Given the choice, I'd rather be locked in with Stripe.

And Stripe has VAT handling in beta to basically do what Quaderno does (charge VAT when appropriate, handle invoicing, generate a sales report for you to file to the EU bodies).

But Stripe don't have immediate plans to actually do the EU filing for you (see my other comment about costs there, but it's ballpark £600/year to totally hand over to accountants). This is where Paddle still has an advantage - their pitch is basically "don't ever have to think about payments ever again" - which is crazy powerful, except for some reason I don't trust them (for all the reasons you mentioned - mystery pricing, quality, random account lockdowns).

Use Stripe and getrevin.com - then you have access to Stripe but still with an MoR model like paddle

Thanks for sharing this Robert. The only thing I would add is that I think most countries have thresholds before VAT registration and collection is required. For example, I think if you're in Spain and selling into the UK, the threshold is £85,000. I think for most EU countries VAT threshold is €35,000.

So you have to get reasonably big (at least for an indie hacker) before it becomes a problem.

Caveat that I am not a tax attourney or accountant, so please don't take this as tax advice.

I'm personally torn between the two choices... I haven't made up my mind yet.

Are you happy with Paddle so far?

A couple of extra things about Paddle:

• You can sell digital products as an individual without a company (I asked this a couple years back from their customer service)
• Not just for SaaS but also for one-off digital products like books, games etc

Edit: Great comparison, thank you a lot Robert!

Thanks Robert, it's been 3 years since the article but it seems to be still very useful.

Something that maybe was not possible before but now it is... is that Paypal accepts card payments without the need to have a Paypal account.

i.imgur(DOTCOM)/JL9ztDQ.png

Wouldn't it also be a good option to use Paypal directly as a payment gateway, since it also supports card payments?

And in that case, would we have to calculate taxes or it would not be necessary?

Thanks again

this is a really great post thank you for sharing.

Lots of insight, thanks for sharing!

Thanks for sharing. Really helpful!

Really helpful, thanks for the breakdown!

The best option here would be PayPro Global.

Now stripe has tax feature, does anyone still prefer paddle?
https://stripe.com/en-in/tax#pricing

thank a lot for sharing
really helpful

Hi Robert, what is your feedback on Paddle now almost a year later? Very good article btw, thank you!

Little late in the discussion. Is this same for both B2B and B2C. If I'm selling SaaS for Business customers, do i need to file the tax at origin country of customer?

One thing I would like to add is that Paddle has referral system built-in with the payment system. Currently we are using Chargebee + Stripe setup. Chargebee handles all the recurring plans and makes one-time payment calls to Stripe. Which means we can switch to any payment gateway like paypal anytime we want. But I am missing the referral system payments in chargebee that paddle already offers.

Thanks for sharing this.

On the face of it Paddle looks a no-brainer to me in terms of outsourcing tax management for what is a small cost so it is useful to understand practical sticking points.

Do you have any view on these possibles:

1. Countries/states have tax thresholds so until your sales become significant you are not liable for tax. When using Paddle your sales are "bundled up" with other Paddle sales in that country, so your product is liable from first sale. So without Paddle => no tax to pay until significant volume. With Paddle => tax to pay from first sale.

2. Paddle are (understandably) selective with their clients and are increasingly targeting ever-bigger / ever-less-risky customers in-part to fight fraud that will leave a gap regarding support for smaller operators.

Selling in multiple countries is complex. I have not found any solution that I am 100% satisfied with.

This keeps bugging me from time to time. I'm sure there could be a better approach.

But clearly providers are evolving and it will be interesting to see how support for global tax evolves.

I recently contacted Paddle about changing customer emails and they confirmed there is no API now in the near-term. There is however a button in the online portal that they can activate for you on request, depending on that user's history with Paddle the button may just put a request in for someone at Paddle to amend the email.

FastSpring (older & more expensive incumbent) does have an API to change customer email and largely works quite similarly to Paddle with a little more flexibility here and there. One thing they don't have is something akin to Paddle's new "inline" checkout, it's either a full-blown checkout page or a (somewhat ugly) popup overlay.

I would love to know more about other options that don't involve a Merchant-of-Record like Paddle. I understand that Taxamo can remit taxes for you and works with Stripe, but how expensive is it? Are there other options that will do that too? What works best for early-stage startups with no cashflow who want to keep monthly costs down (so % fee works well)?

Hi Robert, thank you for sharing. This is really helpful. I had to make the decision between Stripe and Paddle last week for my time tracker sideproject https://getbillable.com/

I decided to go with Paddle for now. The extra service they provide (with the taxes) save me time. At the current stage of my project that time allows me to add more valuable features to the app. I might switch to Stripe in the future. The connection with Indiehackers is nice ;)

This is really helpful! Thanks for posting!

Been down this road too!

As an EU person I'm gonna use either Paddle or Gumroad for my SaaS. :)