Choosing the Right Billing Platform for Your SaaS

The Core Decision: Processor vs Merchant of Record

Before comparing specific tools, understand the fundamental architectural choice: do you want a payment processor or a merchant of record service?

Payment processors like Stripe handle the technical aspects of collecting payments. They move money from customer cards to your bank account. But you remain the legal seller. You are responsible for taxes, compliance, and customer relationships.

Merchant of record services like Paddle become the legal seller. Customers technically buy from them, and they pay you. This means they handle VAT, sales tax, and compliance across jurisdictions. The trade-off is higher fees and less control.

When to Choose a Payment Processor

Most SaaS companies should start with a payment processor, specifically Stripe. Here is when this makes sense:

• You primarily sell in one country where tax requirements are manageable
• You have engineering resources to handle integration
• You want maximum control over customer relationships and branding
• You have or plan to have B2B customers who need specific invoicing
• Your pricing model requires flexibility the merchant of record services do not support

When to Choose a Merchant of Record

Merchant of record services make sense in specific situations:

• You sell globally and do not want to manage tax compliance across dozens of jurisdictions
• You are a small team without dedicated finance or legal resources
• You are selling to consumers (B2C) where per-customer invoicing matters less
• You want to simplify operations even at the cost of higher fees

Stripe: The Default Choice

For most SaaS companies, Stripe is the right starting point. Here is why:

• Developer Experience: Stripe's API is legendary. Clean documentation, intuitive design, and excellent SDKs make integration straightforward.
• Feature Completeness: Subscriptions, usage-based billing, invoicing, tax calculation (via Stripe Tax), revenue recognition, and more.
• Ecosystem: Every SaaS tool integrates with Stripe. Your email marketing (Sequenzy), analytics, and customer success tools all connect natively.
• Global Payments: Accept payments in 135+ currencies with dozens of local payment methods.

Stripe's pricing is 2.9% + 30 cents per transaction for cards, which is competitive. Additional features like Stripe Tax add their own fees.

Paddle: The Merchant of Record Alternative

Paddle handles payments, taxes, and compliance as your merchant of record. For companies selling globally to consumers, this simplification can be worth the premium.

Paddle charges 5% + 50 cents per transaction, significantly more than Stripe. But this includes VAT and sales tax calculation and remittance globally, compliance with local payment regulations, handling chargebacks and disputes, and simplified checkout that handles international complexity.

The main downside beyond cost is less control. Customer relationships technically go through Paddle. Invoicing options are more limited. And not all B2B customers are comfortable purchasing through a third party.

Integration with Your Stack

Whatever billing platform you choose, it needs to integrate with your broader stack. Critical integrations include:

Email Marketing: Billing events should trigger customer communication. When payments fail, when trials end, when subscriptions renew. Sequenzy integrates natively with Stripe and other billing platforms to automate these touchpoints.

Product: Your application needs to know subscription status, plan limits, and feature entitlements.

Analytics: Revenue data should flow to your analytics for lifetime value calculation and cohort analysis.

Our Recommendation

Start with Stripe. It handles most SaaS billing needs with excellent developer experience and universal integration support. Add Stripe Tax for global sales. Connect to Sequenzy for billing-triggered email automation.

Consider Paddle if you sell B2C globally and want to outsource tax complexity. Consider Chargebee if you have enterprise billing needs or complex pricing that outgrows Stripe Billing.