Paddle is a Merchant of Record (MoR) payment infrastructure platform for SaaS and software companies, founded in 2012 in London. As a Merchant of Record, Paddle legally takes on the responsibility for tax collection and remittance (VAT, GST, and sales tax in 200+ countries), payment processing, fraud protection, and customer billing support. This means software companies can sell globally without hiring an accountant or implementing a tax compliance stack. Following its 2023 acquisition of ProfitWell, Paddle includes subscription analytics as part of its core offering.
Paddle’s pricing is transaction-based with no monthly subscription fee on the standard plan: 5% + $0.50 per transaction. This fee covers payment processing, tax compliance, fraud screening, and billing support. No monthly fee applies for the standard tier. For SaaS businesses processing above $50,000 to $100,000 in monthly revenue, custom enterprise pricing with negotiated lower rates becomes available through the sales team.
The effective cost of Paddle’s 5% fee is meaningfully different from a payment processor like Stripe (2.9% + $0.30). The difference, however, is that Stripe does not handle tax compliance — companies using Stripe must separately implement Stripe Tax, file VAT returns across jurisdictions, and manage regulatory compliance, which can cost $500 to $5,000 or more per year depending on the complexity of the business. For global SaaS companies, Paddle’s all-in rate often competes favorably once compliance costs are factored in.
Paddle’s weaknesses are the higher base transaction fee, a checkout experience that shows “Paddle” rather than the merchant’s brand, less billing customization than Stripe Billing, and Capterra reviews noting approval friction for new businesses (some report requiring 3 months of processing history).