How to choose billing

Four inputs that matter

Before looking at a single platform, answer these.

1. Product type

SaaS, marketplace, or digital products. Each has different tax treatment, subscription semantics, and dispute patterns. Marketplaces generally need direct billing. Digital products sold at scale generally need a merchant of record.

2. Customer type

B2B or B2C. B2B buyers expect invoices, POs, procurement flows, and custom contract terms — things direct billing handles better. B2C buyers expect instant checkout, local payment methods, and zero friction — where MoR shines.

3. Geography

Mostly US, mostly EU, or global. The EU requires VAT registration once you cross country thresholds. Global sales mean tax obligations in dozens of jurisdictions. If you don’t plan to build a tax function, MoR handles this by default.

4. Priorities

Fastest setup, maximum flexibility, or compliance off your plate. These pull in different directions. Flexibility favours direct. Compliance favours MoR. Fastest setup favours whichever matches your team’s existing expertise.

Outcome A — direct billing (Stripe or similar)

Choose direct when you need control over the billing surface: pricing logic, invoice formatting, subscription lifecycle, usage metering, custom contracts. This is the default for B2B SaaS with technical buyers and for any product with complex billing logic a hosted checkout can’t express.

You own more: tax registration per jurisdiction, VAT and sales-tax calculation, chargeback response, dunning, reconciliation. A subscription platform (Chargebee, Recurly, Orb, Metronome, Lago) can sit on top of Stripe to manage the billing logic.

Outcome B — merchant of record

Choose MoR when compliance is the priority and flexibility isn’t. The MoR sells on your behalf and takes legal responsibility for tax, VAT, chargebacks, and fraud. Paddle, Dodo Payments, Polar, FastSpring, and Lemon Squeezy sit in this category — with meaningful differences in market focus, developer experience, and pricing.

You pay more per transaction. You get back compliance, time, and legal exposure. For indie developers, B2C SaaS, and global digital products, this is usually the right trade.

Outcome C — hybrid

Some teams run both. Direct billing for enterprise contracts and high-ACV customers; MoR for self-serve and global digital sales. This is more complex to operate but matches how the customer base actually splits. If neither model clearly wins for you, this is often why.

Common mistakes

• —Picking based on developer experience instead of business model.
• —Underestimating global tax obligations until customers in the EU trigger them.
• —Choosing a subscription platform before deciding direct vs MoR.
• —Assuming MoR fees are expensive without pricing in the cost of the compliance work avoided.
• —Committing to a model before pricing is defined.

If you need clarity, use one of the entry points on the site.