Launching a SaaS project on the international stage is like starting a new business in each country. Different currencies, tax systems, laws, and payment habits. A mistake in choosing a payment gateway can cost not only money but also months of work and reputation. In this guide, we will not just compare providers but explore two fundamentally different philosophies of building payment infrastructure, so your choice is strategic, not momentary.
Two Paradigms: PSP vs. MoR - Who Are You in This World?
The first and main choice is not between brands but between business models.
1. PSP (Payment Service Provider) / PayFac: You Are the Seller
In this model, you (your company) are the merchant. The provider (PSP) is your tool for accepting payments, but all legal and tax responsibility lies with you.
Examples: Stripe, Braintree (by PayPal), Adyen, Checkout.com
Pros:
Full Control: You manage everything, the payment funnel, and customer data.
Economies of Scale: At high volumes, the commission is lower than with MoR.
Flexibility: You can create a highly customized payment process, integrate any tools, and build complex billing systems.
Cons:
Tax Responsibility: You must track, calculate, collect, and pay VAT, GST, sales tax in each country where you have clients. Stripe offers the Stripe Tax tool for automating calculations, but registration and payment are still your tasks.
Fraud and Chargeback Management: You must independently build protection and dispute unjustified returns.
Compliance: You are required to comply with standards such as PCI DSS, which requires additional effort and resources.
Legal Risks: You are responsible to clients and regulators worldwide.
2. MoR (Merchant of Record): Provider Is the Seller
In this model, the Merchant of Record legally becomes the seller of your product to the end customer. MoR takes on all the "headaches" associated with the transaction.
Examples: Paddle, Lemon Squeezy, FastSpring.
Pros:
Speed and Simplicity: Launch takes days, not months.
Zero Tax Burden: MoR automatically calculates, collects, and pays taxes in over 100 countries, taking on all responsibility.
Fraud Protection and Chargeback Handling: The provider handles disputes and protects you from financial losses.
Relief from Legal Complexities: MoR ensures compliance with PCI DSS, GDPR, and other standards.
Cons:
Higher Commission: The service fee includes all operations, so the transaction fee is higher (for example, Paddle — 5% + $0.50).
Less Control: You cannot endlessly customize the payment process.
Branding on the Receipt: The client's payment documents will show the MoR brand (e.g., Paddle), not yours. In B2B, this may raise questions.
Detailed Analysis of Players: Their Strengths and Niches
To make a decision, you need to understand what distinguishes each provider from the rest.
Stripe: "The Gold Standard" for Developers
Model: PSP.
Strengths: Incredibly rich and convenient API, which has become the industry standard. Support for 135+ currencies and operations in 50+ countries. Powerful ecosystem: Stripe Billing for subscriptions, Stripe Tax for tax calculations, Stripe Radar for fraud prevention. Perfectly integrates with popular frameworks through ready-made libraries.
For Whom: For teams with strong developers who value control, flexibility, and plan to build their own, perfectly tuned billing system. This is the choice for those ready to delve into the tax laws of Germany or the USA for better economies of scale.
Paddle: A Powerful MoR Partner for SaaS
Model: Merchant of Record.
Strengths: A complete "all-in-one" solution designed specifically for SaaS. The 5% + $0.50 commission includes all functions: high-conversion and localized checkout, subscription management, global tax compliance, fraud prevention, and analytics. Paddle acts as your strategic partner, relieving you of all operational burdens.
For Whom: For growing SaaS companies, especially B2C and SMB B2B, who want to focus on product and marketing, not on legal and tax issues. Ideal for rapid global market entry.
Braintree: The Power of PayPal's Ecosystem
Model: PSP.
Strengths: Deep and seamless integration with PayPal. If your target audience actively uses PayPal, Braintree offers one of the best payment experiences. Also supports Apple Pay, Google Pay, and has its own tools for subscription management. Being part of PayPal ensures a high level of reliability and security.
For Whom: For businesses whose audience is loyal to PayPal, especially in regions where this payment method dominates (e.g., USA, Germany). A good option if you want PSP flexibility but with a focus on integration with major payment systems.
Comparative Table of Key Parameters
| Parameter | Stripe | Paddle | Braintree |
|---|---|---|---|
| Main Model | PSP (Payment Service Provider) | MoR (Merchant of Record) | PSP (Payment Service Provider) |
| Key Advantage | Maximum control and flexibility for developers | Complete removal of operational and tax burdens | Deep integration with PayPal and its ecosystem |
| Transaction Fee | ~2.9% + $0.30 (payments only) + separate fees for subscriptions, taxes, etc. | 5% + $0.50 (all-inclusive) | 2.59% + $0.49 (for cards and online wallets) |
| Tax Compliance (VAT/GST) | Tools for calculation (Stripe Tax), but registration and payment are on you | Fully on the provider: automatic calculation, collection, and payment | Requires independent solution and integration of third-party services |
| Fraud Prevention | Stripe Radar (often for an additional fee) | Included in the commission | Built-in risk management tools |
| Global Reach | 195+ countries, 135+ currencies | 200+ countries, 30+ currencies | 45+ countries, 130+ currencies |
What to Choose? A Practical Guide to Action
Answer the key question about your priorities:
👉 Choose MoR (Paddle or Lemon Squeezy) if:
Your motto: "I want to launch in a week and not worry about taxes and legal entity."
You lack resources (lawyers, accountants, developers) to create and maintain a complex payment infrastructure.
You are focused on global expansion from day one and do not want to delve into the intricacies of each country's tax laws.
You are a startup or a growing team, and your main goal is to focus on the product, not operations.
👉 Choose PSP (Stripe or Braintree) if:
Your motto: "I need full control, the best economies of scale, and my own processes."
You have the technical and administrative resources to manage tax and legal responsibilities.
Your business model requires extremely complex and non-standard billing scenarios that "boxed" MoR solutions do not support.
You are ready to pay less per transaction but invest time and money in building and maintaining your own payment stack.
Continuation: Implementation Plan and Pitfalls
The choice is made. What's next? Here are step-by-step implementation plans and critical nuances that many projects stumble upon.
Implementation Plan: Two Scenarios
Option A: Launch with MoR (Paddle/Lemon Squeezy) in a Week
Registration: Create an account with the chosen MoR. It's quick and doesn't require a foreign legal entity.
Product Setup: In the control panel, create your products, subscriptions, and pricing plans.
Integration: Set up webhooks (e.g.,
payment_succeeded,subscription_cancelled) on your backend. These are notifications that will inform your application about events.Subscribe
No spam — only new posts and an occasional digest.
Leave a comment
Comment