What is Paddle?
Paddle is a merchant of record for software businesses. Rather than only processing a card, it resells your product to the buyer, so Paddle collects and remits sales tax and VAT, screens fraud, fights chargebacks and answers buyers' billing questions. Checkout, subscriptions, invoices and failed-payment recovery run on the same platform, and you are paid once a month.
The trade against Stripe is price for paperwork. Paddle charges one 5% + 50¢ fee per checkout with no monthly cost. Stripe's card rate is lower, but on standard Stripe you register for and file tax yourself in every place you owe it.
Who is Paddle best for?
Paddle is best for software, app and game makers who sell worldwide and want someone else to collect and file sales tax and VAT.
SaaS selling worldwide
Paddle collects, files and pays sales tax and VAT as the seller, so a small team avoids tax registrations in each market it sells to.
Mobile apps selling on the web
US apps may now link to outside payments, and Paddle's web checkout costs 5% + 50¢ against the App Store's 15% to 30%.
Games and consumer software
Paddle serves games and desktop software as well as B2B SaaS, with checkout in the buyer's language and currency.
Subscription teams fighting churn
Retain's failed-payment recovery and cancellation flows come with Paddle Billing at no extra cost, and ProfitWell Metrics is free.
What's included with Paddle?
Localized checkout, subscriptions, global tax filing, failed-payment recovery, free revenue metrics and developer tools including an MCP server.
- Localized checkout
- Inline or hosted checkout in the buyer's language and currency, with one-click express checkout for Apple Pay and Google Pay.
- Subscriptions
- Multi-product subscriptions with paid trials, pauses, upgrades and a customer portal for buyers.
- Tax and compliance
- Paddle calculates and collects the right tax, tracks deadlines and files sales tax and VAT returns as the seller.
- Retain
- Dunning, failed-payment recovery and cancellation flows, built into Paddle Billing at no extra cost.
- ProfitWell Metrics
- Free subscription analytics on revenue, churn and retention.
- Local payment methods
- Cards, PayPal, Apple Pay and Google Pay, plus local options such as UPI in India and Pix in Brazil.
- Developer tools
- An API, Paddle.js, SDKs, a command-line tool, React components and a remote MCP server for AI agents.
How much does Paddle cost?
Paddle charges 5% + 50¢ per checkout transaction with no monthly fee, covering payments, tax compliance, fraud and buyer support; high-volume sellers can ask for a custom quote.
- Payments, checkout, subscriptions and billing
- Sales tax and VAT handled as merchant of record
- Fraud protection, chargebacks and buyer support
No monthly, setup or migration fees, and Retain is included. Custom pricing for high-volume businesses, or for products under $10, is quoted by sales and not published. Payouts go out monthly once your balance passes your threshold (at least $100); a SWIFT payout in a currency other than your bank's local one carries a $15 wire fee. Full pricing on paddle.com. We checked these prices on .
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Paddle pros and cons
It removes global tax paperwork for one fee, but slow approval, slow support and a higher rate than a plain processor are the usual complaints.
Pros
- Founders say it takes sales tax and VAT off their plate entirely, which matters most for small teams selling to consumers in many countries.
- Once approved, developers rate its API and docs close to Stripe's, with little account setup to maintain.
- One fee covers payments, tax, fraud and buyer support, so there is no stack of add-ons to price.
- Buyers' refund, billing and cancellation questions go to Paddle's support instead of yours.
Cons
- Approval can take weeks, and several early-stage and AI founders report rejections after long reviews.
- Support is slow: users on r/SaaS describe waits of five days or more between email replies.
- Some sellers report accounts closed or payouts frozen with no clear reason given.
- At 5% + 50¢ it costs more than a plain card processor, and money arrives only once a month.
How do I connect Paddle to my AI agent?
Paddle MCP is Paddle's official MCP server. Add it to your agent once, then ask it to check Paddle docs and API details while you build billing.
Gives your agent the latest Paddle documentation, API reference and SDK guides, so the billing code it writes matches how Paddle works today. It is a docs server, not account access.
Paddle gives each account its own server address. Open the setup guide, copy your address, then add it to Claude Code like any other server.
Use the address from Paddle's setup guide.
Paddle's setup guide covers the sign-in.
Then ask your agent
- Runs
- On the web
- Sign-in
- See guide
- Maker
- Paddle
- Guide
- developer.paddle.com
What are the best Paddle alternatives?
Three tools on Recaply do Paddle's job. Gumroad is open source, so you can run it on your own server.
StripePaidChoose it when you want the lowest base rate, 2.9% + 30¢ for US cards, sell physical goods or services, or are ready to handle sales tax with Stripe Tax.
GumroadOpen SourceChoose it when you sell digital downloads, courses or memberships rather than SaaS and want a storefront with sales tax handled, for 10% + 50¢ per direct sale.
CopeCartPaidChoose it when you sell coaching or courses in Europe, which Paddle's rules exclude unless tied to software; its merchant of record plan costs 4.9% + €1 per sale.
Questions about Paddle
What is the difference between Paddle and Stripe?
Paddle is the merchant of record, so it collects and files sales tax and VAT within its 5% + 50¢ fee. Stripe is a processor at 2.9% + 30¢ for US cards, so you handle tax yourself unless you add Managed Payments for 3.5% more.
Who is Paddle for?
Paddle is best for software, app and game makers who sell worldwide and want someone else to collect and file sales tax and VAT.
Is Paddle free?
No. Paddle has no monthly or setup fee, but it takes 5% + 50¢ from every checkout transaction. Its ProfitWell Metrics subscription analytics are free, and Retain's churn tools come with Paddle Billing at no extra cost.
How much does Paddle cost?
Paddle's paid plans are Pay-as-you-go at 5% + 50¢ per checkout transaction.
Does Paddle have an MCP server?
Yes. Paddle MCP is Paddle's official MCP server, so agents such as Claude Code, Cursor, Codex and GitHub Copilot can check Paddle docs and API details while you build billing. Paddle runs it on the web.
Is there an open source alternative to Paddle?
Yes. Gumroad is an open source tool that does the same job, so you can run your own.
What are the best Paddle alternatives?
The closest alternatives on Recaply are Stripe, Gumroad and CopeCart.
Where can I try Paddle?
On its official website, paddle.com.
What can't you sell with Paddle?
Paddle is built for software: B2B SaaS, consumer software and games. Its acceptable use policy rules out physical products and human services not tied to software, such as pure consulting, coaching or design work.
When does Paddle pay you?
Once a month. On the 1st, a balance above your payout threshold, at least $100, becomes a payout; it is sent between the 2nd and 15th and can take up to 3 working days to arrive by wire, ACH, SEPA or Payoneer.
Is Paddle cheaper than the App Store for app subscriptions?
For web purchases, yes: Paddle charges 5% + 50¢ against Apple's 15% to 30%. US apps may now link out to outside payments, and Paddle handles refunds, tax and compliance much as the App Store does.
Our verdict
Paddle is a sound pick for a small software or app business that sells to consumers worldwide and does not want to run its own tax filings.
One 5% + 50¢ fee covers payments, sales tax and VAT filing, fraud and buyer support, and the churn tools and metrics come free.
- Skip it for
- Sellers of physical goods or services, products too early to pass review, and businesses big enough to handle tax for less than the gap to Stripe.
- Check first
- Apply well before launch, and get approved before you build your checkout around it.
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