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Question
What payment gateways do you use?
I've been using Thrivecart for a while and I'm considering a switch either to Stripe directly, Paddle, or Lemon Squeezy.
I've heard that...
- Lemon Squezzy is easy to use but has high hidden costs
- Paddle isn't friendly according to my memory from some previous conversations on Twitter
So I'm considering just going with Stripe and I'm a little apprehensive about their Tax calculations charges :/
Just wondering what you guys use before I jump into creating the stack for my next project. Thank you!
I've heard that...
- Lemon Squezzy is easy to use but has high hidden costs
- Paddle isn't friendly according to my memory from some previous conversations on Twitter
So I'm considering just going with Stripe and I'm a little apprehensive about their Tax calculations charges :/
Just wondering what you guys use before I jump into creating the stack for my next project. Thank you!
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Personal experience - either Stripe or Paddle, LemonSqueezy is still too buggy in terms of the product and stats.
How would you choose between Stripe and Paddle?
Paddle works as a Merchant of Record, like a middleman selling your product, that way they can collect sales Tax for you and pay it in the country in which your customer is a resident.
Stripe can calculate tax rates but you have to file in every country in teory. You can avoid it maybe until you get big but still some countries require you to do so. I think this will be more enforced in upcoming years.
Stripe is not available in every country. That may also affect your decision.
I am using Paddle but Stripe is not available in my country. I would have used Stripe otherwise.
Right now I use Stripe. Their API Doc is good. My friends use LemonSqueezy and having problems with their support reply time so he move back to Gumroad.
Wondering why you move away from Thrivecart though? I'm considering buying it.
Just two reasons at this point:
So the user’s experience will be sub-par compared to most solutions today, since they will have to email for support.
Price wise you're going to pay similarly with any MoR, so LS and Paddle are basically no different.
I seen a comparison charte with Lemon fees being higher than Paddle at the end, for most SaaS businesses
Likewise I’ve seen more complaints on LS hidden pricing.
Would you go Stripe, Paddle or Lemon and why?
LS or Paddle, because I don't have a choice. Stripe doesn't operate in South Africa and there are 0 payment providers here offering charging in USD. Big potential conversion issue.
I've used Paddle for
#enp and didn't have any issues. The only thing to keep in mind is if you're building to sell, do yourself a favor and keep a separate account for each project.
Got it, thanks
i'm going to try out lemonsqueezy for #vrpc. mostly out of curiosity. 🤞 all goes smoothly and i don't end up having to migrate away. i'll share how it goes...
Unless you're in a place that's known to be extremely difficult with VAT (Germany), don't bother with it, go with Stripe, and use the savings to hire a good accountant @ 10k MRR
How does Germany makes VAT extremely difficult? I wanna know what you’re referring to here.
I’m in Singapore and I’ve been handling VAT with Thrivecart’s tax collection information + my accountant at this point anyway.
They're just more meticulous about it. Quarterly tax reporting. Need to report every invoice sent and received. A lot of bureaucracy. Accountants make a killing there.
Sounds like a pain!
You're missing the other half of this problem, which is that the countries you're selling to (i.e. where your customers are located) will have an issue with you not remitting tax. It's not just about where your business is located, it's also about where your customers are located and the thresholds in those locations.
For example the UK will ask for you to remit tax if you've had even a single transaction. You are liable from the very first sale (source: tax-agony.paddle.com/united-k…), and they have enough resources to go after you if they really want to.
Will they? Probably not. Do I agree with their tax policy? Also no. But, I like to sleep soundly at night. I wouldn't take the chance for the same reason I pay my income taxes on time every year.
Yeah. The open secret is that the UK will just not bother your $5k MRR business that's making $400 in the UK to remit tax. And so you're better off focusing on building a viable business, not paying 5-10% extra on your revenue to fees, and engaging a good accountant when the time comes. You'll be able to survive the late remittance fees.
Eh, for one thing, if your business is going to live or die based on a 5% fee then you might be running a restaurant, not a SaaS ;)
For another thing, just because the UK won't come after you currently (I agree, it's not likely) doesn't mean some other country will act the same way, or that regulations will remain the same forever.
For those reason I'd rather offload the responsibility of compliance to another entity and I'm glad to pay a small fee in return to never have to think about this again. If the difference was 25% or more, sure, I'd pay more attention to the payment processor fee upfront. But from my perspective I'm getting value out of that 5%, and it's going to cost me a hell of a lot less to eat that on every transaction (I'm not doing that many at the moment) compared to telling my CPA to handle sales tax remittance for me globally.
I'll reevaluate when I start doing enough revenue to where paying my CPA a flat fee to handle it starts to make sense.
Well, we'd pay $27,000 per year additionally in fees if we worked with Paddle. It costs me $990 per year to do our UK + VAT MOSS registration and remit tax. To me, it's worth it. To some, maybe not.
Yep, that's the point where I'd get off the MoR bandwagon too. Makes sense at tens of thousands of dollars in fees as my CPA only charges about $900 for the same thing as well.
I use LemonSqueezy. No hidden costs from what I've seen, they advertise what the fees are on their pricing page - you will get bitten by PayPal payments but they advertise how much their fees increase for PayPal, and otherwise it's ~5%. The killer features for me are:
1. Global tax remittance. A lot of people are very passionate about not remitting sales tax at all until you get bigger, but I like to do things by the book when it comes to anything legal/tax related, so it's easier for me to just have a MoR handle this for me instead of taking my chances.
2. PayPal one-time payments and subscriptions.
3. Easy signup. Not as easy as Stripe because they have to approve each store for payments manually, but it only takes about 12-24h per store.
I tried to sign up with Paddle but their onboarding process was terrible. They wanted to review a refund policy, legal docs, and a bunch of other stuff I hadn't prepared yet since I was just building for the first time so I told them to forget it.
Whelp Paddle just rejected my application so I’m gonna go back to Stripe.
LS has 2.5% payout fees so its gonna get too expensive for me to use them.
Weird, I only pay a flat $0.50/payout. Looked further and I think I’m benefitting from having a business based in the US and using PayPal for payouts. Seems their fees are significantly worse for international businesses and bank payouts. Don’t blame you for going back to Stripe.
Another option you could consider is Gumroad - they charge 10% all in (no extra payout fees) but I personally hate their checkout design and the founder seems to be an off-center person (often complains about competitors), not someone I’d trust with my payments.
I've used Gumroad before I switched over to Thrivecart. It was more for simple products and not Sass. Since I'm building subscriptions at this point, Gumroad doesn't sound suitable.
Fair enough