Every indie SaaS founder makes the payments decision exactly once per product, usually in a hurry, usually by copying whatever their boilerplate defaults to. Then the first EU customer arrives, or the first VAT registration letter, and the decision gets remade with feelings involved.
The 2026 landscape has settled into a genuinely useful split: Stripe if you want maximum control and minimum fees and you're willing to own tax compliance; Lemon Squeezy or Polar if you want the merchant-of-record model where someone else is the seller for tax purposes. Here's the honest comparison, including the fee math people get wrong.
The decision that actually matters: MoR or not
Everything else is detail next to this. As a merchant of record (MoR), Lemon Squeezy and Polar legally resell your product: they charge the customer, they handle VAT/GST/sales tax registration, collection, and remittance in every jurisdiction, they eat the compliance risk, and they pay you out. With Stripe, you are the seller: lower fees and total control, but global tax compliance is your problem, and since digital-services tax rules now reach from the EU to dozens of US states to most major economies, "your problem" is real.
The math people get wrong: comparing Stripe's 2.9% + 30¢ against Lemon Squeezy's ~5% + 50¢ and calling it a 2-point difference. The honest comparison adds what MoR replaces: a tax automation stack (Stripe Tax at ~0.5%, plus registrations) or an accountant handling filings (real money per jurisdiction, every quarter), plus the founder-hours and the audit risk. For a sub-$20K-MRR product selling internationally, the MoR premium routinely is the cheaper option once compliance is priced honestly. Past mid-five-figures MRR, the percentage points start outweighing the convenience and the calculus flips.
The three options, honestly
Stripe is the infrastructure standard: every billing scenario expressible (subscriptions, usage, credits, seats: whatever pricing model you chose), the best developer experience and docs, and first-class support in essentially every boilerplate. Costs: 2.9% + 30¢ baseline, plus add-ons that accumulate (Billing, Tax, fraud tooling), plus you are the compliance entity. Choose it for control, scale economics, complex billing, and accept that somebody (you, software, or an accountant) is doing tax work.
Lemon Squeezy made its name as the indie-friendly MoR: ~5% + 50¢ all-in, VAT/sales tax fully handled, license keys and checkout overlays that fit digital products, easy setup. The 2024 Stripe acquisition cut both ways: infrastructure credibility up, and the indie community watches feature pace and fee evolution with mild wariness. Choose it for digital products and SaaS where you want taxes to be someone else's job and setup measured in hours.
Polar is the newer open-source-flavored MoR aimed squarely at developers: similar all-in MoR pricing (~4–5%), a genuinely modern API and developer experience (it markets itself as the MoR with Stripe-grade DX), usage-based billing primitives built for AI products, and native fits for the agent-era stack. It's the youngest of the three (evaluate maturity for your edge cases), but it's where indie momentum visibly moved through 2025–26. Choose it if you want MoR economics with the most modern developer surface, especially for AI products with usage components.
Decision framework
| Your situation | Pick |
|---|---|
| B2C/prosumer, international customers, < $20K MRR | Lemon Squeezy or Polar |
| AI product with usage-based pricing | Polar (native fit) or Stripe (max control) |
| B2B with invoices, enterprise procurement | Stripe |
| Complex billing logic (seats + usage + credits) | Stripe |
| Want zero tax involvement, fastest setup | Lemon Squeezy |
| Selling only to one country you're registered in | Stripe (MoR premium buys little) |
| Planning to sell the product eventually | Either, but document everything |
Two practical notes. Switching costs are real but front-loaded in psychology: active subscriptions don't migrate cleanly (card vaulting differs between MoR and direct models), so most founders who switch run old and new in parallel and let the base roll over: annoying, survivable, and much easier before you're big. Which argues for taking this decision seriously at the start, then not re-litigating it monthly. Your boilerplate's default isn't a recommendation: most kits default to Stripe because it's the common denominator; the better kits (compared here) ship adapters for Lemon Squeezy and increasingly Polar, so the choice is genuinely yours.
Frequently Asked Questions
What is a merchant of record and why does it matter?
A merchant of record (MoR) like Lemon Squeezy or Polar is legally the seller of your product: it charges your customers, handles global VAT/GST/sales tax registration and remittance, absorbs the compliance and audit risk, and pays you the proceeds. It matters because digital sales tax obligations now span dozens of jurisdictions; as a solo founder selling internationally, MoR converts an open-ended legal liability into a flat percentage fee.
Is Stripe cheaper than Lemon Squeezy and Polar?
On sticker, yes: 2.9% + 30¢ versus roughly 4–5% + 50¢ all-in. Honestly accounted, often no at indie scale: Stripe's number excludes tax automation (~0.5% plus registration costs), accounting hours, and compliance risk that MoR pricing includes. Below ~$20K MRR with international customers, total cost typically favors the MoR; well past that, Stripe's lower percentage wins and founders increasingly migrate.
Can I switch payment providers later?
Yes, with friction concentrated in active subscriptions: vaulted cards don't transfer cleanly between MoR and direct models, so the standard migration runs both providers in parallel: new customers on the new provider, existing subscriptions rolling over as they naturally churn or renew through a re-checkout. Plan a quarter for it. The practical lesson: decide deliberately up front, document your webhook handling, and pick a boilerplate with multiple payment adapters to keep the door open.
Which payment provider is best for AI products?
AI products want usage-based or hybrid billing, which narrows the field: Polar built usage-billing primitives natively and pairs well with credit/metered models; Stripe expresses any billing logic with maximum control if you're willing to assemble it (plus handle taxes). Lemon Squeezy fits AI products with simpler subscription tiers. Whatever you pick, meter and cap usage internally; pricing protection belongs in your product, not just your processor.