A payment processor handles the actual movement of money when customers pay you. For newsletter authors running paid subscriptions, choosing the right processor affects your fees, payout speed, and how much tax complexity you have to deal with.
The key decision? Whether you want a Merchant of Record (MoR) or not. An MoR like Paddle or Lemon Squeezy handles sales tax, VAT, and compliance for you—they're technically the seller, and you're a vendor to them. Traditional processors like Stripe or PayPal leave tax responsibility with you.
When comparing payment processors, consider:
- Fee structure: Most charge a percentage plus a flat fee per transaction. For small transactions (like $5/month subscriptions), the flat fee matters more than the percentage.
- International fees: Some processors charge extra for international cards or currency conversion. MoRs typically include this in their base rate.
- Payout speed: How quickly you get your money. Ranges from instant to monthly.
- Merchant of Record: If you sell globally and don't want to deal with VAT/GST registration in dozens of countries, an MoR is worth the higher fees.
For most newsletter authors, Stripe (via Buttondown's built-in integration) is the simplest choice. If you're selling internationally and want someone else to handle tax compliance, consider an MoR like Paddle or Lemon Squeezy.
Which one should I use?
For most newsletter authors: Stripe via Buttondown's built-in integration. You get fast payouts, reasonable fees, and we handle the integration.
For international sales without tax headaches: Paddle, Lemon Squeezy, or Polar.sh. All are Merchants of Record that handle VAT/GST globally. Polar.sh and Creem are ~20% cheaper than Paddle/Lemon Squeezy.
For developers and open source: Polar.sh is built specifically for this audience with instant/daily payouts and developer-friendly tooling.
For high volume: Stax, Adyen, or Helcim use interchange-plus pricing that gets cheaper at scale. Stax requires a $99/month subscription but has the lowest per-transaction fees.
Tool details
Adyen connects directly to card networks for interchange-plus pricing. Best for enterprise with high transaction volumes. Requires significant volume to get started.
Braintree is owned by PayPal but offers a better developer API. Fees are 2.59% + $0.49 domestically, higher internationally. Good middle ground between PayPal's consumer trust and Stripe's developer experience.
Creem offers flat 3.9% + $0.40 pricing with no hidden fees for international transactions or subscriptions. Full MoR with sales tax automation and weekly payouts.
Dodo Payments focuses on high conversion rates and local payment methods for global sales. Full MoR at 4% + $0.40 with weekly payouts.
Helcim uses interchange-plus pricing with automatic volume discounts—no monthly fees. Good for growing businesses that want transparent, scalable pricing.
Lago is different: it's open-source billing and metering software, not a payment processor. Use it alongside any processor for usage-based pricing and invoicing.
Lemon Squeezy was acquired by Stripe and is known for easy setup. Full MoR at 5% + $0.50 with weekly payouts. Popular with indie developers and creators.
Paddle is the original SaaS Merchant of Record. Handles all global tax liability at 5% + $0.50. Monthly payouts are slower than competitors, but they've been doing this longest.
PayPal has the highest consumer trust but expensive international fees (4.4%+ for cross-border). No MoR services—you handle taxes. Fast 1-2 day payouts.
Polar.sh is built for developers and open source projects. At 4% + $0.40, it's 20% cheaper than Paddle/Lemon Squeezy with instant or daily payouts. Full MoR with tax automation.
Square is best for businesses with both online and in-person sales. Doesn't support international payments well. Simple 2.9% + $0.30 pricing with fast payouts.
Stax uses a subscription model ($99/month) with interchange-only pricing and just $0.08 per transaction. Only makes sense if you're processing $20k+/month.
Any other noteworthy alternatives?
- Stripe is the default for most SaaS and newsletter platforms, including Buttondown. 2.9% + $0.30 for US cards, with additional fees for international.
- Gumroad is popular with creators but charges 10% on top of payment processing fees.
- Ko-fi offers a free tier for tips and donations, taking 0% (you just pay Stripe/PayPal fees).
Why does this matter for newsletter authors?
If you're running paid subscriptions on Buttondown, we handle the Stripe integration for you. You connect your Stripe account, set your prices, and we manage the subscription lifecycle. The fees listed above are what Stripe charges—Buttondown doesn't take a cut of your revenue.
For authors selling internationally, understanding the difference between a standard processor and an MoR can save you significant headaches around tax compliance. You'll also want a custom sending domain set up to ensure your payment confirmation emails land in the inbox.
Gee, it sure is awfully nice of you to compile this resource and keep it up to date. What can I ever do to thank you?
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