Question 1

What are Paddle's payment processing fees as a Merchant of Record?

Accepted Answer

Paddle charges 5% + $0.50 per transaction as their standard rate. As of December 2024, transactions under $10 incur a 10% fee instead. Unlike traditional payment processors, this all-inclusive rate covers payment processing, tax collection, fraud protection, chargeback handling, and subscription management. There are no additional fees for international payments, currency conversion, or tax compliance. While higher than Stripe's base 2.9% + $0.30, Paddle eliminates the hidden costs of managing global tax compliance, which can easily exceed the difference for SaaS companies selling internationally.

Question 2

How does Paddle handle sales tax, VAT, and GST globally?

Accepted Answer

Paddle is registered in over 100 tax jurisdictions worldwide and automatically calculates, collects, files, and remits sales tax, VAT, and GST on your behalf. As of December 2024, Paddle covers all EU member states, the US (including state-level complexity), Australia, India, and many other countries. Because Paddle acts as the Merchant of Record, they become the legal seller and assume full tax liability. B2B customers with valid VAT IDs can complete cross-border transactions tax-free. This eliminates the need for startups to register for VAT in multiple countries or hire tax specialists.

Question 3

How does Paddle compare to Stripe for SaaS businesses?

Accepted Answer

Paddle and Stripe serve different needs. As of December 2024, Stripe charges 2.9% + $0.30 but requires you to manage tax compliance, chargebacks, and fraud separately. Adding Stripe Tax (0.5%), Stripe Billing (0.7%), and international card fees (1-1.5%) can bring total costs to 5%+ for global SaaS. Paddle's 5% + $0.50 includes everything with zero tax compliance burden. Stripe offers superior developer flexibility and customization, while Paddle provides a simpler, hands-off approach. Choose Stripe if you have engineering resources and want full control; choose Paddle if you want to focus on product instead of payments infrastructure.

Question 4

Does Paddle offer any programs or discounts for startups?

Accepted Answer

Yes, Paddle runs the SaaS Launchpad program for early-stage founders. As of December 2024, the program offers $10,000 in funding for selected startups, along with mentorship, live masterclasses from industry leaders, and access to partner benefits including up to $350,000 in Google Cloud credits. The AI Launchpad specifically targets AI-focused startups, running for six weeks with a $20,000 cash prize for finalists. To qualify, startups need a minimum viable product, international customer base, and clear signs of market traction. Applications open periodically throughout the year at paddle.com/launchpad.

Question 5

When and how does Paddle pay out earnings to sellers?

Accepted Answer

Paddle pays out monthly on a fixed schedule. As of December 2024, your balance converts to a payout on the 1st of each month if it exceeds your threshold (minimum $100), with payment sent by the 15th and arriving within 3 business days. Payout methods include wire transfer (ACH for US, SEPA for Eurozone) and Payoneer. ACH and SEPA payments in matching currencies incur no fees, while international SWIFT transfers may cost $15. Paddle now supports payouts in USD, EUR, GBP, AUD, and CAD. To change payout settings, update them at least one week before month-end for the changes to apply.

Question 6

What payment methods and currencies does Paddle support?

Accepted Answer

Paddle supports all major credit and debit cards including Visa, Mastercard, American Express, Discover, JCB, UnionPay, and regional cards like Cartes Bancaires and Dankort. As of December 2024, digital wallets include Apple Pay, Google Pay, and PayPal (where currency is supported). Paddle also supports local payment methods like iDEAL and Alipay. Customers can pay in 20+ currencies including USD, EUR, GBP, AUD, CAD, JPY, and BRL. The checkout automatically displays valid payment methods based on customer location and transaction type, with no additional merchant account setup required.

Question 7

What does it mean that Paddle is a Merchant of Record?

Accepted Answer

As a Merchant of Record, Paddle becomes the legal seller of your product. As of December 2024, this means Paddle's name appears on customer invoices and credit card statements, not yours. Paddle assumes full liability for chargebacks, fraud, and tax compliance in 200+ countries. You receive net payouts after Paddle handles all payment routing, disputes, refunds, and regulatory requirements. This model differs from payment processors like Stripe where you remain the seller and bear all compliance obligations. The trade-off is reduced control over the checkout experience and customer communication, but significantly less operational overhead for global SaaS sales.

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