The important questions answered
What control does Paddle give me?
With Paddle, you remain in control of how you present your product and relationships with your customers. You also still manage how you present your billing and checkout information to your customers.
Paddle (like other MoRs) handles all the financial elements of each transaction. That means they will have certain obligations towards the end buyer, like the responsibility for calculation and remittance of sales tax. But it ends there.
Do I still need to register for sales tax?
The short answer is no. If an MoR, like Paddle, is responsible for the transaction then it holds complete responsibility for any sales tax liability. Your business is entirely isolated from this obligation and there would be no cause to register to do the sales tax.
What's the difference between Paddle and a payment service provider (like Stripe or Chargebee)?
A payment service provider (PSP) only handles one part of the transaction process: the part where money’s taken from your customer’s bank account and put into yours. You still need to manage the financial, legal, and taxation responsibilities.
Paddle handles your entire order process and appears on the customer’s credit card statement, which means taking on the related liabilities.
How does this work in terms of revenue recognition?
With Paddle, your payments and subscriptions all live in one place so you have a single, reliable source of revenue data for all of your customers. (More on this later).
Paddle ensures all your billing and payments are compliant and sales data is easy to access. The payout you receive from Paddle is not subject to sales tax as this is borne by the transaction with the end customers (which Paddle is liable for).
What is the difference between Paddle and other MoRs?
Businesses have been using a merchant of record to sell online for decades. But most options on the market were created in the pre-SaaS world. Dealing with them nowadays means many versioning issues and hacks with poor support.
Paddle is the only MoR built specifically for the software industry. You'll spend less time maintaining a legacy system, and more time growing with a reliable, modern merchant of record