Polar vs Stripe comes down to who is the seller. Polar is a merchant of record: it sells to your customer and handles sales tax and VAT, from 5% + 50¢ a sale. Stripe is a payment processor at 2.9% + 30¢ on US cards, so the tax is yours. Lemon Squeezy is a merchant of record Stripe owns.
That one difference, who carries the tax, explains most of the gap in fees. Below: what a merchant of record does, a fee table with a worked example, how payouts work, subscriptions and license keys, the developer experience, what is happening to Lemon Squeezy, and which one fits a solo founder. All fees are as of October 2026, in US dollars, from each company's own pricing pages.
What is a merchant of record?
A merchant of record (MoR) is the company that legally sells your product to the customer. It collects the money, charges the right sales tax or VAT, files and pays that tax, and deals with refunds and chargebacks. You get paid out what is left, minus its fee.
A payment processor only moves the money. Stripe charges the card and pays you, but you are the seller. If you owe EU VAT on a sale to a customer in Germany, registering, collecting and filing it is your job. Stripe Tax helps: it calculates and collects tax, monitors where you cross registration thresholds and can file through partners. Per stripe.com/pricing it costs 0.5% per transaction with no-code integrations, or 50¢ per transaction through the API, in places where you are registered. You are still the one registered.
| Merchant of record (Polar, Lemon Squeezy, Stripe Managed Payments) | Payment processor (Stripe) | |
|---|---|---|
| Who the customer buys from | The MoR | You |
| Sales tax, VAT, GST | The MoR collects, files and pays it | You do, with Stripe Tax as a helper |
| Refunds and chargebacks | Handled through the MoR; dispute fees still reach you | Yours, with Stripe's dispute tools |
| Income tax on your profit | Still yours | Still yours |
| Fee on a US card | About 3.4% to 6.4%, plus 30¢ to 50¢, by provider and plan | 2.9% + 30¢ |
Polar's own docs make the last row explicit: you are "always responsible for your own income/revenue tax in your country of residency". An MoR takes the sales tax off your plate, not the tax on what you earn.
Polar vs Stripe vs Lemon Squeezy fees (October 2026)
| Base fee | Non-US cards | Subscriptions | Dispute fee | |
|---|---|---|---|---|
| Stripe (processor) | 2.9% + 30¢ (US domestic cards) | +1.5%, and +1% if currency conversion is needed | +0.7% for Stripe Billing, pay as you go | $15 per dispute received |
| Stripe Managed Payments (MoR) | 3.5% on top of the payment fees above | Same as Stripe | Needs Stripe Billing | Stripe handles disputes; the received fee applies |
| Polar Starter (MoR) | 5% + 50¢, no monthly fee | +1.5% | No extra fee | $15, whatever the outcome |
| Polar Pro / Growth / Scale | 3.8% + 40¢ at $20/mo, 3.6% + 35¢ at $100/mo, 3.4% + 30¢ at $400/mo | +1.5% | No extra fee | $15 |
| Lemon Squeezy (MoR) | 5% + 50¢ | +1.5%, and +1.5% for PayPal | +0.5% | Not on its fees page |
Sources: stripe.com/pricing, Polar's fees page and Lemon Squeezy's fees page. Polar organizations created before May 27, 2026 keep a legacy "Early Member" rate of 4% + 40¢ plus 0.5% on subscriptions. Lemon Squeezy also adds 5% on recovered abandoned carts and 3% on affiliate referrals.
What a $20 monthly subscription costs you
Take one $20 renewal on a US card:
- Stripe with Billing: 2.9% + 30¢ is $0.88, Billing's 0.7% adds $0.14. Total $1.02, and sales tax is still your job.
- Polar Starter: 5% + 50¢. Total $1.50.
- Lemon Squeezy: 5.5% + 50¢ with the subscription add-on. Total $1.60.
- Stripe Managed Payments: 6.4% + 30¢. Total $1.58 in payment and Managed Payments fees. The pricing page lists the 3.5% "in addition to Payments fees" and says nothing either way about Billing's 0.7%, so check your own account before you rely on this number.
A customer paying with a non-US card adds 1.5%, or 30¢ on $20, on every option. At $20 a month the MoR premium is around 50 to 60 cents a sale. In exchange you never register for VAT in another country. At low volume that is usually worth it. At high volume, Polar's paid plans or Stripe plus your own tax setup start to win.
How do payouts work?
Stripe pays out automatically by default, on a schedule you choose. Polar and Lemon Squeezy hold your balance and pay out in batches.
- Stripe: after your first live payment, the first payout typically arrives within 7 to 14 days, depending on your country, industry and risk level. After that, standard payouts are free, and Instant Payouts cost 1.5% (50¢ minimum).
- Polar: you start each withdrawal yourself. Polar moves the money to your Stripe account and Stripe pays it out. Batches go 24 hours after you start them and typically take 4 to 7 business days. New organizations (created on or after May 12, 2026) also wait out a 7-day settlement delay on each sale. Stripe's payout fees are passed through: $2 a month in which you have an active payout, 0.25% + 25¢ per payout, and 0.25% to 1% for currency conversion.
- Lemon Squeezy: payouts go twice a month, by bank or PayPal. A US bank account through Stripe is free, a non-US bank costs 1% per payout, and PayPal costs 50¢ (US) or 3% capped at $30 (outside the US).
Subscriptions, one-time payments and license keys
All three handle the two basic models: recurring subscriptions and one-time purchases. If you haven't picked yet, Stripe subscriptions or one-time payments covers what each model changes in your app.
| Stripe | Polar | Lemon Squeezy | |
|---|---|---|---|
| Subscriptions | Yes, with Stripe Billing | Daily, weekly, monthly or yearly | Yes |
| One-time payments | Yes | Yes, with permanent access | Yes |
| Trials | Yes | Yes, on recurring products | Yes |
| Seat-based and usage pricing | Yes | Seat-based and metered prices | Usage-based billing |
| License keys | None; Entitlements tell you which features a customer has, and you issue keys from your webhook | A license key benefit with activation limits and a validate endpoint | Generated per purchase, with activation limits and a License API |
| Other delivery | Your code | File downloads up to 10 GB, private GitHub repo invites, Discord roles, a shared Slack channel, feature flags, usage credits | Affiliates, email marketing, abandoned cart recovery |
Polar's benefits are its distinctive feature. They are granted automatically when someone buys, so you don't write code to invite a customer to a private repository or a Discord server, and a license key is revoked when its subscription is cancelled. Lemon Squeezy's license keys follow the subscription lifecycle the same way.
Developer experience
Stripe has the widest API: Checkout as a hosted or embedded page, Billing for subscriptions, a customer portal, webhooks for every state change, and a test mode with test cards. You write the most code, but you control the most. Managed Payments, its MoR option, is narrower: per Stripe's Managed Payments docs it works with Checkout and Payment Links only, not with Elements-based flows, Connect platforms or subscriptions created outside Checkout and Payment Links. Customers see the purchase as "Sold through Link", custom domains aren't supported on its checkout pages, and your business has to pass an eligibility review and be based in a supported country (the US, Canada, much of Europe, Australia, Hong Kong, Japan and Singapore). It is for fully automated digital products such as SaaS, not consulting or physical goods.
Polar calls itself an open source merchant of record. For Next.js there is @polar-sh/nextjs, with Checkout, CustomerPortal and Webhooks helpers. Products, prices and benefits are configured in its dashboard or API.
Lemon Squeezy has a REST API, webhooks, hosted checkout and the separate License API (activate, validate and deactivate). Its 2026 update acknowledged "slower support responses and less frequent product updates", which matters if you need help quickly.
If you want to see what wiring a processor into a Next.js app involves, Stripe embedded checkout with Next.js and Supabase walks through the session, the return page and the webhook.
Lemon Squeezy vs Stripe: what changed
Stripe acquired Lemon Squeezy in July 2024, according to Lemon Squeezy's own announcement, which promised the same product would continue. In April 2025 Lemon Squeezy announced Stripe Managed Payments as the first milestone: a merchant of record built into Stripe itself.
In January 2026 Lemon Squeezy's 2026 update said it is "building the future of merchant of record" on Stripe Managed Payments, and that the goal is to give Lemon Squeezy users an easy way to migrate. It did not announce a shutdown date. Stripe's support pages now name the MoR entity behind Managed Payments as "Sold through Link, LLC" and say LemonSqueezy LLC was the previous name for it. Lemon Squeezy's own footer reads "Sold through Link, LLC f/k/a Lemon Squeezy LLC".
So Lemon Squeezy vs Stripe in 2026 is less a rivalry than an old and a new door into the same company's MoR. Lemon Squeezy still runs, and its sign-up page is still open. Stripe Managed Payments is where its development is heading.
Which one fits a solo founder?
- You sell worldwide and don't want to think about VAT: pick an MoR. Polar Starter if you like its benefits (repo access, license keys, Discord), Stripe Managed Payments if you are eligible and want to stay inside Stripe.
- You sell mostly to businesses in your own country, or you already handle tax: Stripe on its own is the cheapest per sale and the most flexible. Add Stripe Tax for calculation and collection where you are registered.
- You already run on Lemon Squeezy: nothing forces a move today. Watch for the migration path to Managed Payments and keep your billing code behind one interface so a switch is a config change, not a rewrite.
- You sell services, coaching or physical goods: Managed Payments excludes those, so check the MoR's acceptable use rules before you build on one.
That last point is how shipanysaas does it. Stripe and Lemon Squeezy are both built in, behind one billing interface, and you pick one with NEXT_PUBLIC_BILLING_PROVIDER plus the billing_provider setting in the database. The providers guide lists the variables for each. Polar is not one of the built-in providers.
Before launch, run through the payment items on the SaaS launch checklist, and put the prices on a page that sells them; SaaS pricing page examples shows what the good ones do.
FAQ
Is Polar cheaper than Stripe?
Not per sale. Polar's free plan charges 5% + 50¢ against Stripe's 2.9% + 30¢ on US cards. Polar's fee includes acting as merchant of record, so the fair comparison is Polar against Stripe plus your tax registrations, Stripe Tax and your time filing returns.
Do I still pay tax if I use a merchant of record?
You don't collect or file sales tax or VAT on those sales; the MoR does. You still pay income tax on your profit where you live.
Is Lemon Squeezy shutting down?
Lemon Squeezy has not announced a shutdown. Its January 2026 update says it is building on Stripe Managed Payments and plans an easy migration path for its users, while support and product updates have slowed.
Does Stripe Tax make Stripe a merchant of record?
No. Stripe Tax calculates and collects tax where you are registered, and you stay the seller. Stripe Managed Payments is the product where Stripe becomes the merchant of record, for 3.5% on top of the normal payment fees.
Can I switch providers later?
Yes, but customers' saved cards and active subscriptions don't move on their own. Keep plan ids and access checks in your own database rather than spread through your code, so a new provider changes the checkout and webhook code, not every page that checks for a paid plan.