Paddle vs Polar
Pricing
Paddle: 5% + 50c per transaction
Polar: Free plan at 5% + 50c per transaction; Pro $20/mo at 3.8% + 40c
Description
Paddle: Payment platform that handles global taxes for you: they are the seller, you get paid net
Polar: Open-source merchant of record for selling software, subscriptions and usage-based billing, handling sales tax for you
Pros
- Merchant of record means they handle VAT, sales tax, and invoicing worldwide
- Built-in subscription management with dunning and recovery
- You never have to file taxes in foreign countries
- Acts as merchant of record: it collects and remits sales tax and VAT on your sales
- Usage billing, subscriptions and credits can be combined on one product, which suits AI products billed by tokens
- Open source under the Apache 2.0 licence
Cons
- 5% + 50c is nearly double Stripe's rate
- Approval process required: they review your business before you can start
- Less flexibility than Stripe for custom checkout flows
- Fees are higher than a plain payment processor: 5% + 50c per transaction on the free plan, plus 1.5% for non-US cards
- Disputes cost $15 each whatever the outcome, and transaction fees are not returned when you refund
- Payouts carry Stripe's charges: $2 a month while payouts are active, plus 0.25% + 25c per payout
Details
Paddle takes the scariest part of selling software internationally (tax compliance) and makes it someone else’s problem. They act as the merchant of record, which means they are legally the seller. They collect the payment, handle VAT/sales tax in every country, and pay you a net amount. You never file a foreign tax return.
The price for this peace of mind is real: 5% + 50c per transaction versus Stripe’s 2.9% + 30c. For many SaaS founders selling to customers in the EU, UK, and beyond, the math still works out: hiring an accountant or using a tax service would cost more. Paddle requires approval before you can start, so apply early.
Polar is a billing platform and merchant of record. It meters usage, runs subscriptions and invoicing, and sells to your customers as the merchant of record, so sales tax is collected and remitted for you and the rest settles to your bank account. A hosted checkout and a single link are enough to start selling.
It is built for developers selling software, and especially for AI products that charge by tokens or agent runs: you send one event per model call, and Polar meters it, prices it and puts it on the invoice.
The free Starter plan charges 5% + 50c per transaction. Paid plans swap part of that for a monthly fee: Pro is $20/month at 3.8% + 40c and, by Polar’s own numbers, pays off above about $1,379 a month in sales. Organisations created before 27 May 2026 keep an Early Member rate of 4% + 40c, plus 0.5% on subscription payments.
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