The Invoice That Ruins Your Week
You ship the product. The first payments land. Someone in Berlin buys a seat, then emails you asking for a proper VAT invoice with your VAT number on it. You do not have one. You go looking, and you find out that a digital product sold to a consumer in the EU is taxed where the buyer lives, not where you live. Then you read the same thing about the UK, Australia, Canada, Japan, and about half the US states.
That is the moment every founder hits. And it is the moment the merchant of record pitch starts to sound very good.
In 2026 that market got a new player: Stripe itself. Stripe Managed Payments is Stripe selling the thing that Paddle, Polar, and Creem were built to sell. So the question is no longer "should I use a merchant of record." It is "which one, and how much is it really taking."
I ran the numbers. They are worse than the pricing pages suggest.
What You Are Actually Buying
A merchant of record (MoR) is the legal seller of your product. The customer buys from them, not from you. They collect the money, they charge the right sales tax or VAT, they file the returns in every country, and they wire you the rest.
You are not buying a payment processor. You are buying someone else's tax registrations and someone else's liability. That is the whole product. Everything else (checkout, subscriptions, invoices) is table stakes.
The price of that is a percentage of every sale, forever. So the only honest way to judge these tools is to work out what percentage you actually pay, not what the headline says.
Stripe Says 3.5%. That Is Not The Price.
Here is the part that catches people. Stripe Managed Payments charges 3.5% per successful transaction, and Stripe's own docs are clear that "the Managed Payments fee is in addition to the standard Stripe payment processing fees." It is a surcharge, not a replacement.
So on a US card at the standard 2.9% + 30 cents rate, your real cost is 6.4% + 30 cents.
One more detail from the same page: the 3.5% is "calculated based on the full transaction amount, including any indirect taxes." You pay Stripe a cut of the VAT you collected for a government. On a German sale at 19% VAT, that is a fee on money that was never yours.
If you sell from Europe the base rate is friendlier (Stripe lists 1.5% + 0.25 EUR for standard EEA cards), so Managed Payments lands near 5% + 0.25 EUR for local buyers. Non-EEA cards are 3.15% + 0.25 EUR before the surcharge, plus 2% if the currency has to be converted. Your blended rate depends entirely on where your buyers are.
The 2026 Price List
| Provider | Headline fee | What it really means |
|---|---|---|
| Stripe Managed Payments | 3.5% add-on | 6.4% + $0.30 on a standard US card, charged on the amount including tax |
| Paddle | 5% + $0.50 | Flat and all-inclusive. Products under $10 need custom pricing |
| Polar | 5% + $0.50 on Starter | Drops to 3.8% + $0.40 (Pro), 3.6% + $0.35 (Growth), 3.4% + $0.30 (Scale). Add 1.5% for non-US cards |
| Creem | 3.9% + $0.40 | Lowest flat rate of the four. Payout fees are separate |
Put a real business through it. Say you run a $29 per month product with 1,000 paying subscribers, so $29,000 a month:
- Stripe Managed Payments: about $2,156 a month (7.4%)
- Paddle: about $1,950 a month (6.7%)
- Polar on Starter: about $1,950, plus 1.5% on every non-US card
- Creem: about $1,531 a month (5.3%)
- Plain Stripe plus Stripe Tax: about $1,286 a month (4.4%), but the filings are yours
The gap between the most expensive MoR and the cheapest is roughly $625 a month. That is $7,500 a year for the same job. At that size it is a hire, or your entire ad budget.
The Fees That Are Not On The Pricing Page
Headline rates are marketing. Payout terms are the product. This is where the four of them separate.
Polar passes Stripe's payout costs through to you: $2 for any month with an active payout, 0.25% + $0.25 per payout, and cross border conversion of 0.25% inside the EU and up to 1% elsewhere. Disputes are $15 each no matter who wins. And organizations created on or after May 12, 2026 now sit behind a 7 day settlement delay before funds become available. Accounts older than that kept instant payouts.
Creem pays out twice a month, on the 1st and the 15th. You need a $50 balance to get paid at all, and each transfer costs "7 USD/EUR or 1% of the payout amount, whichever is higher." Stablecoin payouts through Polygon cost 2%. On a small monthly payout, that flat $7 is a real percentage.
Paddle is the boring one, which at this level is a compliment. One rate, no payout surcharge on the pricing page. If your product sells for under $10, you are in custom pricing territory and should get the terms in writing before you migrate.
Stripe Managed Payments rides on your existing Stripe account, so your payout schedule is the one you already know. That is the strongest argument for it. You are not adding a new company between you and your bank.
Plain Stripe Is Still Fine For Some Of You
Nobody selling a merchant of record wants to say this, so I will.
If your buyers are almost all in one country, you do not need an MoR. Register at home, use Stripe Tax to calculate the right rate (pay as you go pricing starts at 0.5% per transaction), and file your own returns. You will pay something like 3.4% all in instead of 6.4%, and your accountant will handle the rest for a few hundred a year.
The MoR premium is insurance against forty registrations you do not want to own. If you only need one registration, you are buying insurance for a house you do not live in.
Cross the border seriously, though, and the math flips fast. Registering for VAT OSS, UK VAT, Australian GST, and a dozen US states, then filing all of them quarterly, is not a weekend of work. It is a permanent tax on your attention.
Pick One In Sixty Seconds
- Most of your revenue is domestic: stay on plain Stripe with Stripe Tax. Revisit when foreign sales pass a quarter of your revenue.
- You want the lowest MoR rate and can live with two payouts a month: Creem at 3.9% + $0.40, with the payout fee priced in.
- You are already deep in Stripe and value one dashboard over one point of margin: Stripe Managed Payments, knowing you are paying the highest rate on this list for that comfort.
- You are scaling and want to negotiate down: Paddle for the flat all-inclusive rate, or Polar if your volume gets you onto Growth or Scale, where 3.6% starts to beat everyone.
The Fee Is Not The Risk
Here is the hard part, and it is the part I would think about longest.
When you use a merchant of record, that company holds your revenue. Not you. Every one of these platforms has public reviews from sellers describing held funds, delayed payouts, or closed accounts after a compliance review. Some of those sellers were probably doing something they should not have. Some were not. You will not know which side you land on until it happens.
So read the payout section of the terms before you read the pricing page. Ask what triggers a reserve. Ask how long a review takes and who you email. Keep enough runway that a 30 day hold is annoying rather than fatal. And do not let one platform own both your billing and your only bank relationship.
A single point of fee difference costs you a few thousand a year. A frozen account costs you the company.
Run Your Own Numbers Today
Take last month's revenue. Split it into domestic and foreign. Count your transactions, because the fixed 30 to 50 cents per sale is what quietly destroys low priced products. Then put your real numbers through the four rates above.
Most founders I talk to are surprised by two things: how much the per transaction fee matters at low prices, and how little the headline percentage told them about their actual bill.
Twenty minutes in a spreadsheet, once a year. That is the whole job. Go do it.