How indie makers take payments: Stripe, PayPal or a merchant of record

Every paid product makes the same first decision about money: take payments yourself through a payment processor, or let a merchant of record (MoR) sell on your behalf and deal with sales tax and VAT everywhere you have customers. We looked at the 1,171 makers' products we track that show which way they went — each with a source: the maker's own words, a customer story, the company's subprocessor list, or its website.

Most makers still use a processor

80% of these products use a payment processor (938) and 20% use a merchant of record (234). A few use both — often a processor for one market and an MoR for the rest.

Stripe891 · 76%PayPal101 · 9%Paddle79 · 7%Lemon Squeezy77 · 7%Polar50 · 4%Dodo Payments30 · 3%Razorpay19 · 2%Orb15 · 1%

Stripe alone appears in 891 of them. PayPal's 101 is higher than you might expect for a developer audience, but it's mostly an addition, not a replacement: 72 of those products (71%) use Stripe too. Among the merchants of record, Lemon Squeezy (77), Paddle (79) and Polar (50) lead.

These are products we can observe, not market share. Processors show up more easily — on websites and in subprocessor lists — than some MoRs, whose checkout lives on the MoR's own domain.

What the difference costs

The honest comparison isn't "which fee is lower". A processor's fee buys you payments; an MoR's larger fee also buys you tax registration, collection and filing in every country you sell to. Here is what each costs at list prices, from each vendor's pricing page:

At $10,000 a month the merchants of record cost $150–$290 more than Stripe's standard card rate. That's the price of not registering for VAT in the EU and UK, sales tax in US states, and GST elsewhere — and of not filing those returns every quarter. For a solo maker selling worldwide, that's usually cheap. For a product whose revenue is mostly in one country, it's often not worth it: Stripe plus Stripe Tax, or handling one jurisdiction yourself, keeps the difference.

International cards, currency conversion, subscriptions and payouts add fees on every option; the calculator lists them per vendor.

The merchants of record are growing fastest

Downloads of the payment SDKs tell a different story from the installed base. Measured against the typical package we track (installs are up across the board), the newer MoRs are growing far faster than Stripe:

• Dodo Payments: 4.3× the median package's growth over the last year
• Polar: 2.5× the median package's growth over the last year
• Paddle: 1.6× the median package's growth over the last year
• Lemon Squeezy: 1.4× the median package's growth over the last year
• Stripe: 1.4×

Part of this is a small base. But the products point the same way: among the 247 AI products that show how they take payments, 19% use a merchant of record, against 20% of the rest. AI products tend to sell to customers in many countries from day one and to charge by usage — and an MoR that also meters usage (Polar, Dodo) removes both problems at once.

How to choose

• Selling worldwide, solo, and you don't want a tax job: a merchant of record — Polar for software and digital products, Paddle once revenue is steady. Lemon Squeezy works, but Stripe (which owns it) is moving its sellers to Stripe Managed Payments, so check where that stands before you build on it.
• Mostly one country, or you already handle tax: Stripe, which most makers here use.
• AI product charging by usage: look at MoRs with usage billing built in, or Stripe with a billing layer — see metering and billing on top.