For one thing Paddle is a merchant of record so it's more like "outsource your entire payment system including all the processing of different payment methods and the global tax admin". For a lot of businesses, particularly smaller ones with international sales, that is going to be an attractive option compared to services like Stripe even at this price point.
For another thing Stripe has introduced so many extras that bump up their cut now that some types of business will end up paying quite a bit more than the analogous headline rate. So even if it were an apples to apples comparison the difference on the bottom line still wouldn't be as wide as it might first appear for those merchants.
Thanks for the explanation, I missed the tax and other benefits at first glance. I don't have those tax complications personally but I do see the value now.
Having a checkout bundled with paypal/apple pay/card is pretty compelling however.
Wanted to jump on this thread as I actually work in this space and wanted to clear some things up. Another thing with tax solutions added to your stack, is that they purely calculate what you owe, leaving you liable incase there is a miscalculation. Its still up to you to pay this to the relevant authorities.
Paddle handle it all + take full liability. Shoot me a email nick.read @paddle.com if you want a little more info :)
Not selling internationally perhaps? If you're only selling to customers in the same place then taxes are often much simpler. You might even be exempt from your country's whole sales tax system until you're big enough to cross a threshold.
Most online sellers don't have to handle that themselves, whether they're selling physical goods (your shopping cart like Shopify or WooCommerce will do all the sales tax calculations), or services (most locales don't tax them, and you have to get pretty big to worry about establishing economic nexus in places that do).
They offer merchant of record services, which essentially means you can sell worldwide without worrying about tax issues.
I have contemplated Stripe vs Paddle couple of months ago. But ultimately chose to stay with Stripe and deal with tax complexities when there is sizable revenue.
Except the extra cost here is on the wrong side of the equation: it's on the variable side.
So yes, CTO's should "pay real money to get real support," but that only makes sense if the costs don't scale with every dollar of revenue.
A 5% fee is basically impossible to pay for anything that's not software (90%+) margins. Ecommerce, for example, has about 5%-10% net margins. 2%, net, extra payment processing fees is huge.
