Polar.sh vs Stripe for SaaS: When Merchant of Record Beats Direct Processing
Stripe processes payments; Polar.sh assumes legal responsibility for them. As a Merchant of Record, Polar.sh handles global sales tax registration, collection, and remittance for 4% + $0.40 per transaction vs Stripe's ~2.9%. The ~1.1% premium eliminates tax compliance burden across EU, UK, and every other jurisdiction with sales thresholds. For solo developers and small teams selling internationally, the MoR model is often the correct choice — the tax paperwork savings exceed the fee difference.
The choice between Stripe and Polar.sh for digital product sales comes down to one structural difference: who is the legal seller in the transaction. ## Stripe: You Are the Seller Stripe processes payments on your behalf. You are the legal seller. At approximately 2.9% + $0.30 per transaction, the processing fee is lower. However, you are responsible for: registering for VAT/GST in every jurisdiction where you exceed sales thresholds, collecting the correct tax rate for each customer's location, filing returns (often quarterly) in each jurisdiction, handling refunds and chargebacks directly. For a solo developer selling a SaaS product to customers in 20+ countries, this means managing tax registrations, quarterly filings, and compliance obligations across the EU (27 countries via OSS/IOSS), the UK, Canada, Australia, and others. The administrative burden scales with geographic reach. ## Polar.sh: They Are the Seller Polar.sh is a Merchant of Record. The customer is legally buying from Polar, not from you. Polar handles all sales tax registration, collection, remittance, refunds, and chargebacks globally. You receive net revenue minus their 4% + $0.40 fee. The ~1.1% additional cost over Stripe buys complete elimination of international tax compliance. No VAT registrations, no quarterly filings, no tracking thresholds per jurisdiction, no penalties for missed deadlines. ## When Each Makes Sense **Stripe wins** when you sell primarily in one jurisdiction (no cross-border tax complexity), have a finance team or accountant handling tax compliance, or operate at scale where 1.1% of revenue is a significant absolute number. **Polar.sh wins** when you're a solo developer or small team, sell to customers internationally, don't want to spend time on tax paperwork, or are just starting and want to focus on product rather than compliance infrastructure. ## The Convergence With Stripe Managed Payments entering private beta (built on the Lemon Squeezy acquisition), Stripe itself is moving toward offering MoR services. If it launches broadly in 2026, the choice may become Stripe-as-processor vs Stripe-as-MoR, eliminating the need to choose a separate provider. SaaS Payment Provider Landscape 2026: Processors, Merchants of Record, and Subscription Layers