When a customer challenges a charge, the process they go through matters. It shapes how likely they are to ask for a refund, contact support, or file a dispute straight through their bank. Stripe and Paddle take two very different approaches, and those differences show up fast in your dispute numbers.
This comparison looks at how Stripe vs Paddle handle the customer-facing side of disputes, how it impacts buyer behavior, and what it means for your risk level as a merchant.
Stripe: The Bank Leads the Conversation
On Stripe, disputes usually begin with the cardholder contacting their bank. The bank files the dispute directly with the card network, and Stripe passes it along to the merchant. At that point, it's already considered a chargeback.
There's no Stripe-hosted page where customers are asked if they want a refund before filing. There's no built-in warning for merchants, either. Disputes come in fully escalated. You can submit evidence through Stripe's dashboard, but the damage is already done. It counts toward your dispute ratio, and if you're using Stripe as your main processor, that ratio matters.
Stripe does support Early Fraud Warnings (EFW) and Real-Time Disputes in some cases, but those alerts are limited. Most of the time, merchants are left responding after the fact.
How it plays out:
- The buyer goes straight to their bank
- The dispute hits without a heads-up
- It's up to the merchant to fight or refund after it's escalated
- Each one affects your account's dispute stats
Paddle: Refund First, Dispute Later
Paddle handles things differently. When a customer has a problem, they're routed through a Resolution Center hosted by Paddle. That's where they're asked to explain the issue, request a refund, or get help before going to their bank.
This flow delays or prevents disputes. Paddle reviews refund requests on the merchant's behalf, and many never reach the card network. If a chargeback does happen, it goes through Paddle's system, not the merchant's own account. Paddle acts as the Merchant of Record, meaning it owns the risk.
Because Paddle manages billing, taxes, and refunds as part of the checkout flow, customers are more likely to recognize the charge. That also cuts down on "I didn't recognize this" disputes.
How it plays out:
- Buyer is guided to a refund request page
- Paddle support steps in before it escalates
- If refunded, no dispute is filed
- If disputed, Paddle absorbs the chargeback risk
Which One Reduces Chargebacks Better?
Paddle lowers chargebacks by removing the need for a customer to call their bank. Stripe doesn't offer that type of redirect. Its dispute path starts with the issuer and ends with the merchant trying to win it back.
For sellers in categories with high friendly fraud, subscriptions, digital products, or software, Stripe's approach can lead to frequent disputes. Buyers don't always email first. They often go to their bank. Paddle short-circuits that pattern by catching refund requests early.
But that also means you give up some control. Paddle makes final refund decisions. Stripe lets you decide on a case-by-case basis, but that freedom brings higher risk.
At a Glance: Stripe vs Paddle Dispute Flows
Final Thoughts
If you use Stripe, you're expected to manage your own dispute ratio, keep it under network thresholds, and respond quickly. If you use Paddle, much of that gets handled for you, but you lose some control along the way.
The decision depends on how much risk you're willing to carry, how many disputes you're seeing now, and how involved you want to be when a customer pushes back.
FAQ: Stripe vs Paddle
Do Stripe disputes always go through the card network first?
Yes. Stripe does not offer a hosted dispute resolution page for customers. Disputes typically begin with the cardholder contacting their bank, which then files the dispute directly.
Does Paddle completely block chargebacks?
No. Customers can still contact their bank if they're unhappy, but Paddle's Resolution Center lowers the chance of that happening by offering refunds upfront.
Does Stripe notify merchants before a chargeback hits?
Sometimes, through Early Fraud Warnings or Real-Time Disputes, but not always. Many disputes show up fully escalated and already count toward your ratio.
Can I use both Stripe and Paddle?
Yes, but Paddle must handle the entire checkout flow to act as Merchant of Record. You can't mix dispute models within the same transaction.
Does Paddle's Resolution Center affect customer experience?
It usually improves it. Customers get an option to explain their issue and request a refund directly, which avoids back-and-forth with the bank and prevents escalation.
Let Chargeblast Handle What Stripe Doesn't
Stripe gives you data and a dashboard, but no early warning system. Chargeblast adds that missing layer. It flags disputes before they hit, automates your responses, and gives you options to refund at the right time. For Paddle merchants, it's less urgent. But for anyone using Stripe, Chargeblast helps keep your ratios in check and your account stable.
Don't wait for the chargeback to show up. Stay ahead with Chargeblast.
