Trying to choose between Stripe and Paddle? It's not just about who processes payments faster. These two platforms take wildly different approaches to how they handle global commerce, developer needs, chargebacks, and tax headaches. Here's a breakdown of what actually matters in 2025.
Stripe vs Paddle: A Side-by-Side Breakdown
1. Business Model and Structure
- Stripe operates as a payment processor. You, the merchant, are the seller of record. This means you're responsible for handling taxes, compliance, chargebacks, and everything that comes with selling globally.
- Paddle, on the other hand, is a merchant of record (MoR). That means Paddle sells on your behalf. You're technically selling to Paddle, and they resell to the customer. This setup makes them responsible for tax collection, payment compliance, and dispute handling.
Bottom line: If you want full control and flexibility, Stripe gives it to you. If you want to offload complexity, Paddle's MoR model does it for you.
2. Developer Tools and Customization
- Stripe is known for its developer-first approach. Its APIs are flexible, well-documented, and allow deep customization for payments, subscriptions, invoicing, and more.
- Paddle has improved its developer experience, but it's still more plug-and-play than customizable. Their SDKs and APIs are serviceable but limited compared to Stripe's ecosystem.
Verdict: Stripe wins for teams that want to build, extend, and fully own the payment stack.
3. Chargeback Handling and Dispute Management
- Stripe leaves chargeback handling to the merchant. You get notified and submit evidence. They act as a middleman between you and the issuing bank. Stripe also offers "Chargeback Protection" for a fee, but coverage is limited to certain use cases.
- Paddle handles chargebacks directly, since they are the merchant of record. They respond to disputes, gather evidence, and appeal if necessary, without you lifting a finger. You never directly deal with the dispute process.
Edge: Paddle takes the pain out of chargebacks. Stripe makes you own it or pay extra to limit your exposure.
4. Pricing and Transparency
- Stripe has standardized pricing (typically 2.9% + 30¢ per transaction) and charges extra for things like advanced fraud detection, international payments, and currency conversions. There can be hidden costs if you're not careful.
- Paddle bundles everything like payment processing, tax handling, fraud protection, and chargebacks into one fee (usually around 5–7%). While it looks more expensive, it can be cheaper when you factor in all the Stripe add-ons you'd otherwise need.
Note: Paddle doesn't always offer granular pricing details upfront. You usually have to contact sales for a final quote.
5. Global Tax and Compliance
- Stripe provides tax tools like Stripe Tax, but you still need to configure, monitor, and file returns yourself or work with a tax service.
- Paddle, as the merchant of record, automatically calculates, collects, and remits VAT, GST, and other sales taxes globally. You don't need to register in multiple jurisdictions or file tax returns.
Advantage: Paddle takes a huge compliance load off your plate.
6. Support for Different Business Models
- Stripe supports everything from e-commerce to SaaS, marketplaces, and in-person POS setups. It's a generalist.
- Paddle is laser-focused on SaaS and digital products. If you're selling software, subscriptions, or downloads, it's built for that use case specifically.
Result: Stripe is broader, but Paddle is tailored.
Conclusion: Which Platform Wins?
There's no universal winner in the Stripe vs Paddle battle. It comes down to how much control and responsibility you want.
Choose Stripe if:
- You want full control over payments, UI, and back-end systems.
- You have engineering resources to build and manage it all.
- You're comfortable managing taxes and chargebacks.
Choose Paddle if:
- You'd rather not worry about international tax compliance or fraud.
- You want a hands-off approach to chargebacks and disputes.
- You're a SaaS company selling digital goods or subscriptions.
For developers and control freaks, Stripe is still the top dog. For global SaaS sellers tired of playing tax attorney and fraud investigator, Paddle might be the cleaner solution.
FAQ: Stripe vs Paddle
What's the biggest difference between Stripe and Paddle?
Stripe is a payment processor. Paddle is a merchant of record. With Stripe, you handle taxes, chargebacks, and compliance. With Paddle, they do.
Can I use Paddle and Stripe together?
Not directly. Their models conflict. Stripe expects you to be the seller of record, while Paddle requires that role itself. Most businesses choose one or the other based on their needs.
Who handles taxes better: Stripe or Paddle?
Paddle handles taxes automatically. Stripe offers tools like Stripe Tax, but you still have to file returns and manage compliance in each jurisdiction.
Which one is better for SaaS?
Paddle was built for SaaS and subscription-based businesses. Stripe supports SaaS too, but it's more generic and requires more manual setup and maintenance.
Is Stripe or Paddle cheaper?
Stripe appears cheaper upfron, but can get expensive with add-ons. Paddle's pricing is higher, but it bundles in tax, fraud, and chargeback handling. Actual cost depends on your volume, setup, and international footprint.
What if I need recurring billing?
Both support recurring billing. Stripe has more flexibility if you want to build custom billing flows. Paddle is easier to set up for standard SaaS subscriptions.
Chargebacks Are Still Your Problem, Unless You Solve Them at the Root
No matter which platform you choose, chargebacks will cost you money, customers, and time if you're not prepared. At Chargeblast, we help high-risk and SaaS merchants prevent chargebacks before they escalate without forcing you to change processors or add friction for real buyers.
Let us handle the heavy lifting while you stay focused on growing revenue.
