Polar vs Stripe
Pricing
Polar: Free plan at 5% + 50c per transaction; Pro $20/mo at 3.8% + 40c
Stripe: 2.9% + 30c per transaction
Description
Polar: Open-source merchant of record for selling software, subscriptions and usage-based billing, handling sales tax for you
Stripe: Payment processing platform with APIs for online businesses
Pros
- 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
- Working payment flow in under an hour with Checkout or Payment Links
- Handles 135+ currencies so you can sell globally from day one
- Fraud protection (Radar) included at no extra cost
Cons
- 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
- 2.9% + 30c adds up. Paddle and LemonSqueezy handle taxes but Stripe does not
- Account holds happen without warning and can freeze your revenue for weeks
- No built-in tax compliance: you need Stripe Tax ($0.50/transaction) or handle it yourself
Details
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.
Stripe lets you start accepting payments in an afternoon: no merchant account, no bank meetings, no weeks of paperwork. Copy a few lines of code (or use no-code Payment Links), and you have a working checkout. That is why almost every solo founder starts here.
The documentation is genuinely excellent: it is one of the best developer docs on the internet, payments company or not. The dashboard shows you revenue, subscriptions, and customer data clearly. The catch: Stripe is a payment processor, not a merchant of record. That means you are still responsible for sales tax, VAT, and invoicing compliance. If selling internationally scares you, look at Paddle or LemonSqueezy instead.
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