Best Payment Gateways for Solo Developers: Stripe vs. PayPal vs. LemonSqueezy

Choosing a payment gateway is the most critical architectural decision for your micro-SaaS. Choose wrong, and you'll be stuck manually calculating VAT for 27 EU countries at midnight. Choose right, and you can scale globally while you sleep.

1. The Feature Comparison

Before we talk money, let's talk capability. The biggest difference for solo developers is the "Merchant of Record" (MoR) status. An MoR (like LemonSqueezy) handles all global sales tax liability for you. Payment Processors (like Stripe/PayPal) do not.

Feature	Stripe	PayPal	LemonSqueezy
Primary Role	Payment Processor	Wallet / Processor	Merchant of Record
Handles Global Tax (VAT/GST)	❌ (Tools provided)	❌ No	✅ Yes (Automatic)
Checkout UI	Highly Customizable	Standard / Redirect	Hosted / Overlay
Subscription Management	✅ Advanced	✅ Basic	✅ Simple
License Key Generation	❌ (Need custom code)	❌ No	✅ Built-in
Affiliate System	❌ (3rd party required)	❌ No	✅ Built-in

2. The Pricing Showdown

This is where the trade-off happens. LemonSqueezy is more expensive per transaction, but it saves you the cost of hiring an accountant or integrating third-party tax software.

Cost Category	Stripe	PayPal	LemonSqueezy
Transaction Fee	2.9% + $0.30	3.49% + $0.49	5% + $0.50
International Fees	+1.5%	+1.50% (Cross-border)	Included (Usually)
Currency Conversion	1%	3% - 4%	Included
Tax Calculation Fee	0.5% (Stripe Tax)	N/A	$0 (Included)
Payout Speed	2-7 Days	Instant / 1 Day	Twice Monthly (Net 15)

3. Deep Dive & Recommendations

Stripe: The Developer's Powerhouse

Stripe is the gold standard for a reason. If you are building a complex SaaS with usage-based billing (e.g., "pay per API call"), Stripe is unbeatable. However, you are legally the "seller," meaning you must register for tax in every country where you have customers once you hit their thresholds.

Choose Stripe If: You want full control over the UI, need complex billing logic, and are willing to handle tax compliance (or use Stripe Tax) yourself.

PayPal: The Trust Factor

PayPal is rarely used as the only payment provider for modern SaaS, but it is an essential secondary option. Many European and Asian customers prefer PayPal over entering credit card details directly.

Choose PayPal If: You are selling one-off digital downloads (ebooks, templates) or want to offer it as a backup option alongside Stripe to increase conversion rates.

LemonSqueezy: The Solo Dev's Best Friend

LemonSqueezy acts as a reseller. When a customer buys from you, they are technically buying from LemonSqueezy. This means LemonSqueezy handles the tax filing, the fraud detection, and the global compliance. For a solo developer, this saves weeks of headache.

Choose LemonSqueezy If: You are a solo founder who wants to launch fast, hates paperwork, and needs built-in affiliate marketing. The 5% fee is cheaper than hiring an accountant.