Choosing a payment provider looks like comparing two numbers: a percentage and a fixed fee. In practice, three other things decide what you pay: how cheap your product is, how many buyers are abroad, and whether the provider handles sales tax and VAT for you.
The published US rates
- Stripe: 2.9% + $0.30, plus 1.5% for international cards and 1% if Stripe converts currency. Stripe Tax adds 0.5% to calculate tax, but you still register and file.
- PayPal Checkout: 3.49% + $0.49, plus 1.5% for international payments.
- Paddle: 5% + $0.50, as merchant of record.
- Lemon Squeezy: 5% + $0.50, as merchant of record, plus 1.5% on international transactions.
- Gumroad: 10% + $0.50 plus card processing of 2.9% + $0.30.
What a merchant of record buys you
A merchant of record is the legal seller. Paddle and Lemon Squeezy charge the right VAT or sales tax in each country, file the returns and deal with tax authorities. With Stripe or PayPal, those jobs are yours. That work is why merchant-of-record rates are higher.
A worked comparison
Take a $49 product selling 200 times a month, with 40% of buyers outside the US, and Stripe Tax switched on.
Stripe rate
2.9% + 40% × 1.5% + 0.5% taxequals4%
Stripe per month
($49.00 × 4% + $0.30) × 200equals$452.00
Paddle per month
($49.00 × 5% + $0.50) × 200equals$590.00
Lowest
Stripeequals$452.00
Stripe is cheapest on fees, and Paddle, the cheapest merchant of record here, costs $138 more a month. Whether that is worth it depends on how many countries you sell into and what an accountant would charge for the tax filings you avoid.
Cheap products change the ranking
Fixed fees hurt small prices. A $0.50 fixed fee is 5% of a $10 sale but only 0.5% of a $100 sale. If you sell low-priced items, run the comparison at your real price before choosing.
Tip: Headline rates are for US sellers. Stripe's rates for European cards in Europe, for example, are much lower, so check each provider's pricing page for your own country.