This January/February I've been looking at which payment method is best for my SideProject.
I've decided to share what I've discovered, as I haven't found much information on the advantages/disadvantages of Stripe vs Paddle.
I have a SideProject (SPAM: WebiCaster.com) which I want to charge recurrently on a monthly basis. I have free and paid users. The paying users can do things that the free ones can not.
The problem is that the price is very low (5$), it is recurring and the user can be from any country (it would be nice to have multiple currencies and multiple prices).
By law, you have to charge the tax of the country where the user is resident (not my company). That means a headache every month to manage invoices and taxes from multiple countries.
If you have a manager that charges you by invoice volume ... this can be a ruin. You run out of profit margin. It is not the same to charge 100 invoices of 5$, than 1 invoice of 500$.
It is one of the most used payment gateways. It is very easy to integrate using its API. It has relatively low commissions.
- You register instantly. All very easy and fast.
- Multiple projects linked to a single Stripe account (ideal for having multiple sideprojects on a single Stripe account).
- It is designed for development and testing. They have a very well done and very flexible API.
- It allows you to enable "test" mode and all tests are saved separately. You don't mess up the real stats.
- Lots of documentation and community (much more people use it than Paddle).
- Multi-language dashboard panel
- Quite low fees
- Suitable for any kind of project where you want people to pay with their card.
- You can use any form to integrate with their API, or you can use their checkout https://stripe.com/en-es/payments/checkout (tax or coupon calculation doesn't work in that checkout, it only works with forms that use the API)
- It has a portal for your customers to download their auto-generated invoices, change their monthly subscription plan, or change their payment card details. https://stripe.com/docs/billing/subscriptions/customer-portal
- It has a very configurable dashboard where you can see many graphs about your SideProject's revenue (too much data for my taste).
- It does not manage the tax issue. It has to be calculated by the web and then you have to have a manager for the invoices and the MOSS (europe).
- There are tools like quaderno.io that facilitate the tax calculation ... but they have a monthly cost.
- activating "trials" for customers is better implemented in paddle.
It's not just a payment gateway. They are a reseller of your services. This means that they calculate the correct VAT for each client, and Paddle does the billing. Then they bundle all the revenue and pay you on a single invoice.
For example: 500 users -> 500 invoices from Paddle, but your company only receives 1 invoice with the total of all revenues. This simplifies the invoicing a lot!!!
- They take care of tax calculation and payment.
- Paddle allows payment with Paypal, Stripe does not accept Paypal.
- It allows you to specify different prices per currency and has many currencies (Stripe is more complex).
- You can display a multicurrency price on your website very easily. https://developer.paddle.com/guides/how-tos/pricing/display-localized-prices
- Activating Trial periods so that your users are charged after a while is very easy.
- They allow you to "recover" users who have abandoned the checkout. They charge you a 10% commission. (I'm not going to use it, but it's good to know that this feature exists).
- It has a very simple checkout in popup modal format. It is not very flexible, basically you can only change colors or pre-fill fields (email, CP, ...) https://developer.paddle.com/guides/how-tos/checkout/paddle-checkout
- Relatively recently they have released another new checkout that you can embed in your website. You can adjust a lot more things to make it look like it is really part of your website. https://developer.paddle.com/guides/how-tos/checkout/inline-checkout
- More expensive fees than Stripe
- is half-translated into Spanish. I have seen a couple of errors in the translations.
- only available for a few business types. Basically Saas. You can see a list of banned ones here: https://paddle.com/support/aup/
- cumbersome to sign up (several mails and recording a video explaining how my SideProject works)
- I have seen complaints from people who say that they have had their account closed without notice supposedly for selling an incompatible product (when to sign up they have to accept you). This is a bit scary to be honest, but I guess it's because they started selling an unsupported product after pivoting the project.
- the invoices use Paddle's brand and not yours (users can get confused).
- the bank charge comes out with Paddle's name (users can get confused)
- withdrawals require a minimum in the account, otherwise they are not made. You must have 100$ or 100€ to be able to receive the money the following month.
- does not allow to modify the email for an existing user (neither from the api nor from the control panel).
- I can't filter by email from the API. It forces me to save data in my database if I want to interact via API from my web (Stripe does allow me to use the API to filter by email and modify it if I want).
- doesn't allow users to make a plan/rate change by themselves. They are forced to unsubscribe and then sign up for the other new rate. (It can only be done using the API or from the control panel. You do not have a modal to give easy access to your users.)
- the control panel does NOT have a test mode. And you can't delete the tests you have done. They mess up your stats. (They have improved this literally a week ago, on Monday 15th they published a note saying that from now on they do allow it, but it is not as easy as Stripe has it. Basically it is to open another account just to test).
If your product is not digital and automated, Paddle will not serve you.
If you prefer that the invoices only show your brand and do not confuse your users ... do not use Paddle.
If your project requires to do very customized things and you need a good API and well documented .... no way use Paddle.
If you don't want/can't wait several months until you have $100 to get your money ... don't use Paddle.
If you don't want to worry about taxes, or how to display multiple currencies on your website then don't use Stripe.
Selling in multiple countries is complex. I have not found any solution that I am 100% satisfied with.
If Stripe would take care of taxes 100%, and allow Paypal ... then I wouldn't be using Paddle right now.
I hope this little review is helpful to someone, it would have saved my time to know all this 1 month ago.
Tell me in the comments if you have any experience with either of these two platforms, or if you know of a better one.
Which one do you use in your projects?
I forgot to comment on something as basic as pricing.
On Stripe you can easily find them at https://stripe.com/pricing.
Stripe: 1.4% + €0.25 for European customers and 2.9% + €0.25 for NON-European customers. They say you can negotiate if you have a lot of volume.
Paddle: 5% + $0.50
Note: Stripe fees vary from country to country. If your company is from the U.S.: 2.9% + 30¢.
As you can see Paddle is more expensive than Stripe, but they take care of the accounting.