Compare merchant-of-record providers and direct payment processing before deciding who should handle payments, tax, invoices, and buyer support.
A merchant of record can sit between your software business and the buyer. Depending on provider and plan, it may handle payment acceptance, tax calculation, tax remittance, invoices, refunds, disputes, fraud controls, and buyer support.
MoR fees usually look higher than direct processing fees because they bundle more work. The practical question is whether the higher fee is cheaper than building and operating those workflows yourself.
Paddle, Lemon Squeezy, and Polar are common merchant-of-record candidates for SaaS, developer tools, digital downloads, and software products. Stripe-style processing can still win when you want more control and can own the surrounding operations.
Compare order size, customer geography, refund rate, chargeback rate, support needs, tax complexity, and migration risk. If customer geography is uncertain, run conservative and aggressive scenarios before choosing.
The main calculator compares merchant-of-record and direct processing economics from one set of SaaS assumptions.
Open the calculatorIt is most useful for global SaaS, digital products, developer tools, and small teams that do not want to run tax and payment operations themselves.
No. It is often easier operationally, but direct processing can still be better if you have the right tax, finance, and support workflows in place.
Check subscription migration, customer records, invoices, taxes, payout timing, webhooks, failed payment recovery, and how refunds and disputes are handled.