Paddle vs Stripe
Both are finance tools. Here is what separates them.
What Paddle is
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.
What Stripe is
Stripe is a payments platform that businesses use to take card payments online and in person, and to run the billing, invoicing, tax and payout work that sits around them. It accepts payments in more than 135 currencies and supports more than 125 payment methods, including Apple Pay, Google Pay, PayPal, Klarna, Affirm, iDEAL, Pix, UPI, Boleto and OXXO. Its prebuilt payment surfaces are named Checkout, Payment Links, Elements and the Payment Element. The rates that follow are taken from Stripe's UK pricing pages and are quoted in pounds, so they are UK figures rather than global ones. A standard UK-issued card costs 1.5% plus 20p per successful charge. A premium UK card costs 2.8% plus 20p, a card issued elsewhere in the European Economic Area 2.5% plus 20p, and a card issued outside it 3.15% plus 20p. Currency conversion adds 2%. A dispute costs 20.00 GBP and the fee is returned if the merchant wins, while Smart Disputes charges 30% of the disputed amount for each dispute won. Around the core payment, Stripe sells a set of separate products. Billing is 0.7% of billing volume on pay as you go pricing, or from 450.00 GBP a month on an annual plan. Invoicing is 0.4% per paid invoice. Tax calculates for more than 100 countries and every US state across more than 600 product tax categories, and files returns through TaxJar in the US and through Taxually, HOST and Marosa elsewhere. Radar, the fraud screening layer, has four tiers named Lite, Standard, Plus and Pro, with Lite carrying no extra charge for businesses on standard payments pricing and the paid tiers starting at 8 GBP a month. Connect is the part built for platforms and marketplaces that pay out to other people. Its onboarding flow covers more than 46 countries in 14 languages, payouts cost 0.25% plus 10p, and instant payouts cost 1% of the amount sent. Issuing creates cards, at 10p for a virtual card and 3.50 GBP for a standard physical one, with no per-transaction fee on the first 500,000 GBP of card transactions. Terminal covers payments taken in person, at 1.4% plus 10p on EEA cards and 2.9% plus 10p on non-EEA cards, with readers priced from 49 GBP for a BBPOS WisePad 3 to 229 GBP for a Stripe Reader S700 or S710, excluding VAT.
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