Original Source: https://ecommerce-platforms.com/articles/paddle-vs-stripe
If you’re setting up an ecommerce business and you need a solution to help you manage payments and revenue, you might be struggling to choose between Paddle and Stripe.
At a glance, they seem to offer similar tools and services. Both options can integrate easily with your ecommerce store and other tools.
Both support subscription management, multiple payment methods, and custom checkout options. They even both offer excellent reporting tools.
But, after testing both options myself, I can say there’s a clear difference between them. Stripe is more of an all-around solution for payment processing.
It’s definitely the more straightforward option for some companies. Paddle is a merchant of record that handles regulatory requirements and compliance for you, streamlines SaaS subscription management, and offers access to unique services.
I created this hands-on comparison guide to ensure you could access all of the authentic insights you need to make the right choice for your business.
All of the products reviewed in our comparison guides are thoroughly tested by technology experts. Visit our research methodology page to learn more.
Quick Verdict
Don’t have time for an extensive comparison? No problem. Here’s my quick verdict:
Paddle is best for B2B SaaS companies who need access to sophisticated billing constructs, automated sales tax calculations, enhanced compliance management, and hands-on support.
It provides more flexible revenue management tools, and gives you access to experts and tools to help you with everything from pricing to customer retention.
Stripe is best for ecommerce companies and subscription sellers who want a streamlined checkout, multiple payment options, and customizable pricing models.
It can be cheaper than Paddle (if you don’t need all the features Paddle offers), and its great for global organizations. Plus, the developer-friendly API makes it easy to integrate Stripe into your ecosystem.
Paddle Pros and Cons
Pros 👍
Cons 👎
Pros 👍
Specially designed for B2B SaaS companies
Exceptional automatic tax calculation
Multi-currency support
Abandoned cart recovery and retention tools
Consolidated invoicing capabilities
Exceptional value-added services
Highly customizable embeddable checkout
Cons 👎
May have higher fees depending on the features you need
Quite a niche focus
Potential integration issues
Stripe Pros and Cons
Pros 👍
Cons 👎
Pros 👍
Quick and easy setup for beginners
Developer-friendly with an API integration option
Excellent multi-currency support
Support for in-person payments and payment links
Lower transaction fees
Convenient customer portal
Easy integrations with all kinds of platforms
Cons 👎
Fewer unique services and advanced customer support options
Limited tax automation tools
Extra fees for add-ons that are included in Paddle’s service
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Paddle vs Stripe: Overview
Below, I’m going to compare Stripe and Paddle based on all the factors that matter most to merchants, from key features, to pricing and ease of use.
However, before that, it’s worth noting that Stripe and Paddle don’t offer exactly the same service.
Stripe is a payments processing platform, with software and APIs that allow companies from any industry to send payouts, accept payments, and manage transactions online. It’s similar in a lot of ways to options like PayPal.
Paddle, on the other hand, is a “Merchant of Record”, which gives companies an all-in-one solution for payments, billing, and sales tax automation.
It builds on tools for billing and checkout customization with unique extras like the “Price Intelligently” support team, who can help you choose the right pricing structure for your subscription-based business.
Here’s a quick run-down of the differences to be aware of
ServiceStripePaddle PricingVarying transaction fees, as well as additional fees for subscription management, refunds, and other features.5% plus 50 cents for each transaction, plus fees for additional services.G2 rating4.24.5Payment processingInternational payments, recurring payments, and invoice payments.International payments, recurring payments, and invoice payments.CheckoutCustomizable checkoutCustomizable checkoutEase of useReasonably straightforward for beginnersSlightly more complex, but with more supportCustomer supportBasicExcellentUnique featuresExtensive integration options, developer-friendly APIs, in-person payments, and payment links.Add-on services like “Price Intelligently”, customer retention tools, excellent tax and compliance management.
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Stripe vs Paddle: Core Features
Since Stripe and Paddle are slightly different solutions (targeting different audiences), they don’t have the exact same features, but they can do a lot of the same things.
Here’s a side-by-side comparison of some of the main features offered by both Stripe and Paddle.
Payment Processing: Currencies, Payment Methods, and Invoicing
Both Stripe and Paddle support payment processing with multiple currency options, and multiple payment methods.
With Stripe, you’ll need to configure the platform for each of the locations you’re going to be selling in, then Stripe will automatically convert product prices into the right currency for your customer at checkout.
Paddle is very much the same, offering an automatic currency conversion feature at checkout. However, while Paddle supports 29+ different currencies, Stripe supports 135+, which might make Stripe a slightly better option for global companies.
Both companies support a range of payment methods too, such as MasterCard, Visa, Google Pay and Apple Pay.
However, Paddle supports PayPal, and Stripe doesn’t. On the other hand, Stripe supports in-person transactions via the Stripe Terminal, and enables payment links, which are two options Paddle doesn’t offer (from what I can tell).
Paddle and Stripe both offer access to invoicing services, allowing you to create custom invoices, and send them to customers automatically.
They both use similar API solutions to automate accounts receivable, collect payments, and reconcile transactions.
Checkout Options
From a checkout perspective, Stripe certainly makes adding a checkout to your website simple. You can access a prebuilt payment solution that works on any device, and make a few changes to the checkout experience.
For instance, you can change fonts, colors, and block shapes.
Plus, Stripe will automatically translate checkout language into the right language for your customer, based on their location.
Paddle’s checkout option is a little more advanced. You can create a custom checkout for your store that you can embed into a webpage or use as a pop-up overlay.
Like Stripe, Paddle’s checkout translates languages automatically for your customer.
However, unlike Stripe, Paddle gives you dozens of different customization options. You can adjust virtually every aspect of your Checkout, including which payment options to offer to different customers based on their location.
Subscription Management
As mentioned above, both Stripe and Paddle are great for selling subscriptions – but Paddle was specifically designed for B2B SaaS companies.
Stripe gives you a handful of basic subscription options, ideal for ecommerce, such as flat-rate billing, multi-price billing, per-seat billing, usage-based billing and flat-rate and overage billing.
If you need more advanced subscription settings, you’ll need to consider using an integration with a tool like ChargeBee.
Paddle, on the other hand, gives you comprehensive control over your subscription strategy. You can create fixed, tiered, per-seat, and metered subscription options, and combine different rules and strategies for various users.
If you work with Paddle’s “Price Intelligently” team, they can even give you suggestions on how to package your products and price different tiers and options to increase your revenue.
On top of that, Paddle offers support for things like free or paid trials, and allows you to automatically apply pro-rated amounts to bills when customers change a plan mid-cycle.
In my opinion, Paddle is a much more feature-rich option for subscription-based businesses.
Reporting and Analytics
From a reporting and analytics perspective, both Stripe and Paddle have their benefits. Stripe gives you access to a suite of tools you can use to create accounting reports (like balance sheets).
Plus, you can access flexible dashboards and customizable reports to analyze transactions, revenue, payment methods, currencies, and customer behavior.
Stripe even integrates with various BI tools for more advanced data analytics too. You can even integrate Stripe with tools like QuickBooks and Xero for simplified accounting.
Paddle also gives users an excellent range of customizable dashboards and reports, specifically focused on supporting subscription based businesses.
You can review active customers and transaction rates, alongside insights into customer behavior.
What really makes Paddle stand out is the “Profitwell” system, which gives you advanced tools for monitoring churn rates, upgrades and downgrades, recurring revenue, revenue per customer, and more.
You can even access benchmark data from 30,000 SaaS brands, and use real-time insights to adjust your pricing strategy within Paddle.
Tax, Compliance, and Fraud Prevention
Stripe purchased TaxJar to help users calculate sales tax, VAT, and GST. You can automate various tax calculation tasks with Stripe, but you’re responsible for making decisions and ensuring you collect the right amount of tax yourself.
You also need to file and remit your own taxes.
Paddle, as a merchant of record, handles tax and remittance globally for you. It takes full liability for sales tax, and ensuring everything is calculated accurately.
The company also handles chargeback management on behalf of its companies. They’ll automatically respond to chargeback requests, gather data to support your case, and provide reports you can use.
Stripe does have chargeback management capabilities, such as a Radar tool that helps you to identify high-risk transactions.
You’ll also get reports and evidence packages to support your dispute cases, but you may need to pay extra for custom support.
From a fraud prevention perspective, both companies are excellent. Paddle leverages machine learning techniques and advanced algorithms to identify and mitigate risks.
The system analyzes various data points like purchasing patterns and IP addresses to detect suspicious activities. Plus, you can set your own fraud filters on your system.
Stripe takes a multi-layered approach to fraud prevention. The company’s Radar tool uses machine learning to analyze risk in each transaction in real-time.
Plus, like Paddle, Stripe allows you to set customizable rules and create block-lists if you need to build your own fraud prevention strategies.
Integration Options
Both Paddle and Stripe are pretty flexible. Paddle can integrate with most of the top ecommerce platforms, CRMs, marketing tools, and accounting platforms. You also get dedicated options like Paddle for WooCommerce or Paddle for EDD.
Stripe is a little more versatile overall. You can easily connect with virtually any ecommerce system, subscription management tool, marketing app, or accounting system.
Plus, there are extensive APIs and SDKs available for custom integrations. Paddle does have an API system too – but it’s a little more restricted than what you’ll get from Stripe.
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Paddle vs Stripe: Pricing
Here’s where things start to get really tricky. At first Paddle seems more expensive than Stripe, with a transaction fee starting at 2.9% plus 30 cents for most credit cards and wallets.
Paddle, on the other hand’s pay-as-you-go pricing starts with fees of 5% plus $0.50 per transaction.
The difference is that this fee includes access to all of Paddle’s tools for subscription management, tax compliance, currency conversion, reporting and more.
Alternatively, with Stripe, you’ll need to pay extra for things like currency conversion (1%), and tax calculation. There are also extra fees for things like 3D-secure transactions, which are included with Paddle.
That means you could actually save money using Paddle, if you need to use all the features it has to offer. However, it’s worth noting Paddle has some extra fees to consider too.
For instance, you will need to pay extra for access to things like the “Price Intelligently” team, and certain cart abandonment recovery features.
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Ease of Use and Customer Support
Overall, I actually think both Paddle and Stripe are very user-friendly. However, the niche nature of Paddle might make it slightly more complex for some users to understand at first.
There are a lot of different customizable features to explore within Paddle, so you may spend a little more time experimenting with the toolkit.
Stripe is generally considered the more straightforward alternative, although I do think you need some developer knowledge to take full advantage of everything the system has to offer.
The good news is that Stripe does have extensive documentation to help you with integrations and using the APIs.
In fact, both Stripe and Paddle offer access to fantastic self-help resources, including guides and community forums.
However, I do think Paddle goes a little further than Stripe to deliver phenomenal customer support. Although Stripe does offer phone support for premium users – something I couldn’t find with Paddle, the Paddle team offer unique service packages.
For instance, as mentioned above, if you’re willing to pay a little extra, you can work with Paddle’s “Price Intelligently” team and they’ll help you choose the perfect pricing structure for your SaaS products.
These additional services give Paddle a slight edge in my opinion, if you’re looking for a lot of expertise to help you grow your business.
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Paddle vs Stripe: The Verdict
Ultimately, it’s hard to compare Stripe and Paddle on a “like for like” basis. Although they offer access to similar features and capabilities, they target very different user groups.
I think Stripe is probably the most versatile payment processing solution, appealing to a wide spectrum of business leaders. However Paddle is definitely the better choice for B2B SaaS companies.
Ultimately, the right choice for you will depend on the size of your business, your target audience, and the types of products you’re going to be selling.
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