When you're a small team launching a SaaS that serves customers in Asia, Europe, and the Americas from day one, the payment stack decision matters more than it looks.
We went with Lemon Squeezy. Here's the reasoning, in case you're in the same situation.
The two competing models
Stripe is a payment processor. You set up your account, you collect payments, and you handle everything else yourself: tax registration in every jurisdiction where you sell, VAT and GST collection and remittance, sales tax across US states, currency conversion fees, invoice compliance per country.
Lemon Squeezy is a merchant of record (MoR). They sell to your customer (legally), you sell to LS (legally). They handle tax registration, VAT, GST, sales tax, currency, compliance, refunds, and chargebacks. You get a clean monthly payout.
For a large company with a tax department, Stripe is cheaper and gives you more control. For a small team with no tax person, MoR is the only sane option.
The numbers we ran
Lemon Squeezy takes roughly 5% + $0.50 per transaction. Stripe takes ~2.9% + $0.30, plus whatever you spend on tax compliance.
The temptation is to optimize the per-transaction cost. The reality, for us, was:
- Time to set up tax registration in ~30 countries we expect to sell in: months, with lawyer fees
- Ongoing cost of a part-time tax / compliance person: $40k+/year
- Risk of getting it wrong: penalties, audits, blocked from selling in EU or UK if VAT isn't right
The 2% extra LS charges, on the revenue volume we're projecting for the first year, costs less than one quarter of one compliance hire. The decision was easier than the spreadsheet made it look.
What LS specifically helps with
1. Tax compliance, fully outsourced. LS files VAT, GST, and sales tax in every jurisdiction. We never see a tax form.
2. Currency handled invisibly. A customer in Vietnam pays in VND, sees a price in VND, and the conversion to USD for our payout happens automatically.
3. Hosted checkout that just works. LS gives us a checkout URL per variant. We don't host any payment forms. PCI compliance is theirs.
4. Webhook on every subscription event. We subscribe to subscription_created / _updated / _cancelled, verify HMAC, and propagate the plan change to our product within seconds. No polling, no reconciliation jobs.
What we gave up
Custom checkout UX. LS's hosted checkout is fine, but it's their UI, not ours. We'd love brand-matched flow control. Not enough to switch.
Per-product pricing strategies. LS prefers a small number of clean variants. Complex tier laddering with multiple add-ons takes more work to model than in Stripe.
Direct refund processing. We can issue refunds through LS, but the workflow is a few clicks more than Stripe's API.
For our scale, these trade-offs are easy. If we grow to the point where we have a dedicated revenue-ops team and tax counsel, we'd revisit. For now, LS lets us focus on the product instead of becoming part-time accountants.
The takeaway
If you're a small team selling internationally, the math on MoR is so heavily in your favor that the cost difference is almost a non-decision. Talk to your accountant, talk to a lawyer about VAT exposure, and the cost of compliance you didn't realize you'd need will likely dwarf the extra 2% MoR fee.
If you're already paying for revenue ops or have international tax help in-house, do the math more carefully. The break-even point depends on volume.
If you want to ask about our specific setup, drop me a line.
— Ming