Merkava
The Stripe vs Paddle decision for B2B SaaS
Most B2B SaaS founders default to Stripe without considering Paddle. For specific company shapes, Paddle is meaningfully better. Here is the operator-side decision matrix.
Stripe is the default for B2B SaaS billing. It's the default for good reasons — best-in-class developer experience, fast payouts, robust API, near-universal integrations.
It is not the right choice for everyone. For specific shapes, Paddle (or Lemon Squeezy, or Chargebee on top of Stripe) is meaningfully better. Most operators don't run the comparison.
When Stripe is the right call
Most cases. Specifically:
- You're US-based, selling primarily to US customers
- Your customers expect to pay with cards, not invoices
- You're comfortable handling sales tax compliance yourself (Stripe Tax helps; you're still the merchant of record)
- You want maximum control over the checkout flow
For 70%+ of B2B SaaS, Stripe is correct.
When Paddle is the right call
Three shapes where Paddle's merchant-of-record (MoR) model wins:
1. Selling internationally to small businesses. Paddle handles VAT, GST, sales tax in 100+ jurisdictions. As MoR, they're the legal seller; you're a wholesaler to them. For a small B2B SaaS selling to UK/EU/Australian customers, this saves 20-60 hours/year of compliance work plus the cost of a tax service.
2. Selling to consumers + small businesses with cards. Paddle's checkout converts ~3-7% better than Stripe's default checkout for low-AOV B2B/B2C, primarily because of better international payment methods (iDEAL in NL, Bancontact in BE, etc.).
3. Founders who don't want to deal with chargebacks. Paddle handles disputes as the merchant of record. Stripe makes you handle them. For a 1-3 person founder team, the time savings is real.
When neither is right (use Chargebee on Stripe)
If you're doing complex billing — multi-currency, prepaid credits, usage-based with multiple meters, contracts with custom terms — neither Stripe nor Paddle does the billing logic well out of the box. Chargebee on top of Stripe handles the complexity.
Chargebee is overkill for most B2B SaaS under $5M ARR.
The math operators usually miss
The decision is not just about transaction fees. It's about three lines:
| Line | Stripe | Paddle |
|---|---|---|
| Transaction fees | 2.9% + $0.30 | 5% + $0.50 (varies) |
| Tax compliance | Your problem | Their problem |
| Chargebacks | Your problem | Their problem |
| Founder time/year | 30-100 hrs | 5-15 hrs |
At a $50/mo subscription with international customers:
- Stripe: ~$1.80 transaction fee + ~$5/year of your time (at $300/hr) per customer = effective ~$2.20/month/customer
- Paddle: ~$3 transaction fee + minimal time = effective ~$3/month/customer
For a 100-customer SaaS, Stripe is ~$80/month cheaper on fees. Stripe is also ~$2,000-8,000/year more expensive on operator time depending on international mix.
The decision flips depending on your customer mix and your time value.
What Merkava uses
Merkava uses Stripe (live, BILLING_DISABLED=false, all 8 prices set, webhook subscribed). The decision: US-focused launch customer base, founder time was less expensive than the international compliance work would have been at this stage. Reconsider when international % crosses 25%.
How to decide for your business
Three questions:
1. What % of your customers are outside your home country? If >20%, Paddle's MoR model is worth real consideration.
2. How much do you value your time vs. transaction fees? At $300/hr loaded operator rate, the time savings flip the math at lower customer counts than most founders assume.
3. Do you have the team capacity to handle tax compliance and disputes? If 1-3 people, the answer is usually no, even if you think you can.
The default isn't wrong. It's just not always right. Run the comparison.