12 tools that do a similar job, and what makes each one different.
Paddle is a merchant of record for software and other digital products. Rather than acting as a payment gateway that sits alongside your own legal entity, it becomes the seller in the transaction, which moves responsibility for sales tax, VAT and local payment rules from the company selling the software to Paddle. The model suits businesses selling across borders, where registering for tax in each jurisdiction would otherwise be the thing that decides whether you sell there at all. In practice, the service covers payment infrastructure, subscription billing, invoicing and the tax side. Paddle handles subscription setups and global payments, issues invoices for international sales, and provides reporting for finance and management. Fraud protection is automated and chargebacks are handled as part of the service, alongside a separate risk prevention feature. Pricing is a single per-transaction rate: 5% plus 50 cents per checkout transaction, with no monthly fee, no migration fee and no separate charges layered on top. Large businesses can negotiate custom pricing. Because that rate covers tax handling and fraud cover as well as processing, it is not directly comparable with a card processor's headline percentage. Paddle works with over 10,000 digital businesses and has processed more than $6 billion in transactions. It reports an average payment acceptance rate of 94%, a 38% reduction in churn, and a 93% customer satisfaction score against 24/7 support. Those last three are the vendor's own figures and are worth reading as such. There is an API and an SDK for building the checkout into a product, and an integration with ProfitWell Metrics for subscription reporting. Setting up an account requires verification before it can go live. If you later move away, Paddle states that data can be migrated out with no retention periods or restrictions attached, which is the sort of commitment worth confirming in the contract before you depend on it, since a merchant of record arrangement puts your customer and billing relationships in someone else's name.
