Dodo Payments vs Lemon Squeezy
Both are finance tools. Here is what separates them.
| Dodo Payments | Lemon Squeezy | |
|---|---|---|
| Category | Finance | Finance |
| Pricing model | paid | paid |
| Price from | Paid | Paid |
| Upvotes | 6 | 16 |
| What it does | Merchant-of-record billing for AI products, with usage and credits built in. | A merchant of record, so sales tax stops being your problem. |
What Dodo Payments is
Dodo Payments is a billing and payments platform that acts as the merchant of record, which means it assumes legal responsibility for the sale and handles VAT, GST and sales tax worldwide rather than leaving those registrations with you. That is the same arrangement Paddle, Lemon Squeezy and Polar offer, and the reason to reach for any of them is the same: selling software internationally otherwise means registering for tax in countries you have never visited. What separates this one is who it was built for. The platform is aimed at AI-first and SaaS companies, and token metering and API call tracking are billing features rather than something you assemble yourself. The billing models reflect that. Alongside one-time payments and subscriptions there is usage metering and credit-based billing with rollover and overage controls, subscriptions can carry add-ons, and the models can be combined. Credits with rollover are the part generic subscription billing handles worst, and they are how a growing number of AI products actually charge. What a sale costs is assembled from parts rather than quoted as one rate. A domestic United States card or wallet transaction costs 4 percent plus 40 cents, and there are no setup fees, monthly charges or minimum commitments. Surcharges stack from there. Cards and alternative payment methods outside the United States add 1.5 percent. Klarna and Afterpay add 3 percent, as does PayPal. Subscriptions and usage-based billing add 0.5 percent. A domestic India transaction is 4 percent plus 15 cents. Direct debit is cheaper and capped: ACH in the United States and SEPA in Europe both cost 1.5 percent, capped at 15 US dollars and 15 euros per transaction. Bringing your own processor costs 0.5 percent. A refund costs 1 US dollar and a dispute costs 30 US dollars. Standard payouts are free, a USD SWIFT payout costs 25 US dollars, and currency conversion costs the seller nothing because the 2 to 4 percent foreign exchange fee is charged to the customer instead. The integration surface is wide for a platform this young. There is a complete REST API with an OpenAPI reference and full webhook support, official SDKs for TypeScript, Python, Go, PHP, Java, Kotlin, C sharp, Ruby and Rust, and adapters for Next.js, SvelteKit, Nuxt, Remix, Express, Fastify, Hono, Astro, TanStack, Better Auth, Supabase and Convex. Checkout can be a no-code payment link, an overlay, or an inline embed, with React Native for iOS and Android. Coverage is 190 or more countries, 80 or more currencies and 30 or more payment methods, and the platform is PCI DSS Level 1 certified. The trade is the one every merchant of record asks for. You pay a higher percentage than a bare processor charges, and in exchange you never file a tax return in a jurisdiction you have never visited. Worth comparing against Polar and Paddle on the billing model you actually need rather than on the headline rate, because the surcharges are where the real difference sits.
What Lemon Squeezy is
Lemon Squeezy is a hosted checkout and storefront for selling digital products, software licences and subscriptions. Its defining feature is that it acts as the merchant of record, meaning it takes on the liability for calculating, collecting and paying sales tax and VAT on the seller's behalf rather than leaving that to you. That service is paid for out of each sale. There is no monthly charge for the ecommerce features, and the headline rate is 5% plus 50 cents per transaction, calculated on the total order value and taken when the order is placed. The headline is seldom the whole cost, because surcharges are added on top of it. Transactions made outside the United States add 1.5%. PayPal transactions add a further 1.5%. Subscription payments add 0.5%. A subscription bought through PayPal by a customer outside the United States picks up all three, so the rate on that sale is 8.5% plus 50 cents. Further charges sit outside that rate. A sale that came through an affiliate referral costs the merchant an extra 3%, and the affiliate's payout carries 2%. A payment recovered by an abandoned cart email costs an extra 5%. Payouts are priced separately again: free to a United States bank account through Stripe, 1% per payout to a bank outside the United States, a flat 50 cents for PayPal payouts to United States accounts, and 3% capped at 30 dollars for PayPal payouts elsewhere. Sellers with high transaction volume, fast growth, or products priced below 10 dollars can approach the sales team for custom pricing, which is the route worth taking when the fixed 50 cents is a meaningful share of the price. The selling tools themselves are conventional but complete. Checkout can be embedded on any website or shared as a hosted link, and there is a hosted store front that a custom domain can be attached to. Up to 21 payment methods are accepted, PayPal among them. Licence keys are issued automatically after a sale and can be deactivated and reissued, and download links for digital files are signed and throttled against abuse. Subscriptions bill weekly, monthly or yearly, with upgrades, downgrades, cancellations, free trials and discounts handled by the platform, and per seat and usage-based billing are both available. Card retries and failed payment recovery are built in, and the dashboard reports monthly recurring revenue, refunds and average order value. Email marketing is a separate product with its own pricing: free for up to 500 subscribers, then charged by total subscriber count.
We are not affiliated with either product. Upvote counts come from the published formula and neither position was paid for.