Both Paddle and Stripe are popular payment processors used by software-as-a-service (SaaS) companies. Here’s a comparison of the two regarding VAT handling and other features:
Paddle handles VAT (Value Added Tax) collection and remittance through their VAT MOSS (Mini One Stop Shop) compliance service. This means that Paddle automatically calculates, collects, and remits the appropriate VAT based on the customer’s location, taking the burden off you as the business owner! An absolute no brainer…
Stripe, on the other hand, doesn’t offer a built-in VAT MOSS solution. You would need to either handle VAT calculations and reporting yourself or integrate with a third-party VAT compliance solution like Quaderno or Taxamo.
Other features: Paddle:
- Specializes in selling software and digital products
- Offers an integrated checkout, licensing, and subscription management platform
- Provides analytics and reporting tools specific to software sales
- Supports a wide range of pricing models (one-time, recurring, metered, etc.)
Stripe:
- More general-purpose payment processor suitable for various business types
- Offers a wide range of payment methods (credit/debit cards, digital wallets, etc.)
- Provides robust developer tools and APIs for customization
- Supports recurring billing and subscription management
- Offers additional products like Stripe Billing, Stripe Radar (fraud protection), and Stripe Connect (marketplace payments)
In summary, if you prioritize ease of VAT compliance and want a platform tailored specifically for selling software and digital products, Paddle is the better choice. However, if you need a more flexible and customizable payment solution with a broader range of features, Stripe might be a better fit, although you’ll need to handle VAT compliance separately or through a third-party integration.
What do you think??