10 December 2025

Paddle: The Merchant-of-Record Platform Built for Modern SaaS

Learn how Paddle's Merchant of Record model handles global taxes, compliance, billing, and subscriptions for SaaS companies—simplifying international payments and revenue operations.

What Is Paddle?

Paddle is an all-in-one Merchant of Record (MoR) platform designed specifically for SaaS companies.
Instead of simply processing payments (like Stripe or Braintree), Paddle handles:

  • Global taxes (VAT, GST, sales tax)
  • Compliance
  • Billing
  • Checkout
  • Invoicing
  • Fraud
  • Currency localization
  • Customer support for payment disputes

For founders, Paddle acts like a complete revenue infrastructure layer.
It lets you focus on product & growth — not tax laws, filings, or chasing failed payments.

🛡️ Paddle as Merchant of Record: Why It Matters

The MoR model is the biggest differentiator between Paddle and traditional payment processors.

When Paddle is your MoR, they:

  • Collect VAT/GST/sales tax on your behalf
  • Register for tax jurisdictions worldwide
  • File and remit tax to each government
  • Handle audits and compliance
  • Assume legal responsibility for correct tax treatment
  • Issue tax-compliant invoices for every region
  • Manage chargebacks and fraud liabilities

This means:

You can sell SaaS to customers in 200+ countries without becoming an international tax expert.

Paddle handles everything from EU VAT rules, Indian GST, US economic nexus, Australian GST, and more — all automatically.

If you’re an Australian founder selling worldwide, this is massive.

💳 How Paddle Handles Billing & Payments

Paddle includes full payment infrastructure:

✔ Credit cards

✔ PayPal

✔ Apple Pay / Google Pay

✔ Bank transfers (ACH/wire)

✔ Local payment methods (SEPA, iDEAL, etc.)

✔ Subscription billing

✔ One-time purchases

✔ Add-ons, seat-based pricing, usage-based billing

Their payment pages and subscription management tools are built for SaaS pricing complexity — without needing to manage Stripe objects, proration logic, or failed payments manually.

💼 Pricing & Revenue Growth Tools

Paddle includes powerful tools to help SaaS companies grow:

1. Currency Localization

Show prices in the buyer’s currency.
This alone increases conversion 10–30% in many regions.

2. Revenue Recovery

Paddle automatically:

  • Retries failed cards
  • Sends dunning emails
  • Updates expiring cards
  • Fixes billing errors
  • Recovers involuntary churn

Most founders see a 5–15% increase in recurring revenue just from Paddle’s churn reduction.

3. Experimentation

Easy A/B testing for:

  • Pricing
  • Packaging
  • Checkout flows
  • Localized prices by country

4. Upsells & Add-Ons

Sell additional features or usage packs directly through Paddle billing.

⚖️ Paddle vs Stripe: The Tax Difference

Feature

Paddle

Stripe + Stripe Tax

Merchant of Record

✅ Yes

❌ No

Collects global taxes

✅

✅

Files & remits taxes

✅

❌ You must do it

Handles VAT/GST rules

✅

⚠ Helps calculate only

Takes liability

Paddle

You

Global compliance burden

Minimal

High

Flexibility

Lower

Higher

Fees

Higher (~5–7%)

Lower (~2.9% + Stripe Tax)

In simple terms:

Stripe gives you tools.
Paddle gives you done-for-you global tax compliance.

🚀 Why SaaS Companies Choose Paddle

1. Zero Tax Worries

You never need to register in EU, UK, US states, Canada, NZ, Singapore, India, etc.

2. Faster global expansion

Accept payments and stay compliant in new regions instantly.

3. Fewer engineering headaches

No need to build and maintain:

  • Tax logic
  • Subscription logic
  • Webhook handlers for hundreds of billing edge cases
  • Multi-currency pricing
  • Manual dunning workflows

4. Better conversions

Currency-local pricing + localized checkouts = more revenue from each country.

5. Simple reporting

You get:

  • Clean payout summaries
  • Revenue reporting
  • Tax breakdowns
  • Refund records

All the messy parts are abstracted away.

🧠 When Should You Choose Paddle?

Choose Paddle if:

  • You’re selling SaaS or digital products globally
  • You want tax handled for you
  • You’re a small team and don’t want a full billing department
  • You want to start charging customers quickly
  • You don’t want to register for taxes worldwide
  • You want to avoid payment compliance complexity

Choose Stripe instead if:

  • You want total control and customization
  • You expect large enterprise integrations
  • You’re okay filing tax yourself
  • You want the lowest fees possible
  • You already have in-house billing expertise

🏁 Conclusion: Paddle is a Growth Accelerator for SaaS

If you’re building a SaaS product from Australia (or anywhere), Paddle eliminates one of the biggest headaches: global tax compliance and billing complexity.

Instead of spending months learning:

  • EU reverse charges
  • US sales tax trigger rules
  • GST thresholds by country
  • Local invoicing regulations
  • Chargeback workflows

…you just integrate Paddle, set your pricing, and start selling.

It’s SaaS billing done the way SaaS founders wish it always worked.