A SaaS startup can scale to $1M ARR and still be blindsided by a six-figure VAT bill.

Another founder might pick a payment provider because “that’s what everyone uses,” only to discover three years later that their system can’t support usage-based billing or multi-currency expansion.

The truth is, payment infrastructure isn’t just plumbing. It shapes pricing flexibility, international reach, compliance exposure, and even valuation. Choose wrong, and you inherit silent revenue leaks. Choose well, and you gain leverage that compounds growth.

This guide is the single most comprehensive comparison of Stripe vs Paddle vs Braintree for SaaS. It avoids marketing spin and focuses on what actually matters to SaaS founders, CFOs, and product leaders.

In this guide, you’ll learn:

• What each platform is designed for (and why that matters)
  
  
• A decision framework founders use to align provider choice with SaaS model and growth stage
  
  
• A side-by-side comparison of fees, compliance, and global coverage
  
  
• Mistakes to avoid that cost SaaS companies time and money
  
  
• A practical playbook for choosing the right provider from pre-seed to Series B+
  
  

What are Stripe, Paddle, and Braintree and Why It Matters for SaaS

Stripe: Developer-first infrastructure

Stripe is best described as financial APIs for developers. It provides the building blocks for online payments, subscription billing, fraud prevention, invoicing, and more. Stripe is not an all-in-one SaaS payments solution—it’s infrastructure.

Strengths:

• World-class APIs with granular control over billing logic
  
  
• Supports advanced models like usage-based, tiered, or seat-based pricing
  
  
• Expansive ecosystem (Stripe Tax, Atlas, Radar, Treasury)
  
  
• Broad international reach (135+ currencies, dozens of local payment methods)
  
  

Weaknesses:

• Compliance burden sits with the SaaS company
  
  
• Tax registration required in multiple jurisdictions as you scale
  
  
• Engineering investment required to implement and maintain
  
  

Best fit: SaaS with engineering capacity that needs flexible billing and plans for global scale.

‍

Paddle: Merchant of Record (MoR)

Paddle operates as a merchant of record. This means Paddle, not the SaaS company, is legally responsible for sales tax, VAT, compliance, and fraud. It collects revenue on your behalf, deducts fees, and pays out the rest.

Strengths:

• Offloads VAT, sales tax, and compliance liabilities
  
  
• Handles invoicing and receipts natively
  
  
• Quick to launch with minimal engineering overhead
  
  
• Predictable and clean reporting for finance teams
  
  

Weaknesses:

• Higher fee structure (~5–7%)
  
  
• Less flexible for complex pricing models
  
  
• Limited customization compared to Stripe
  
  

Best fit: Early-stage SaaS and bootstrapped founders who prioritize speed and compliance simplicity over customization.

‍

Braintree: Enterprise-grade with PayPal ecosystem

Braintree, owned by PayPal, is a payments platform for SaaS, marketplaces, and consumer apps. It integrates deeply with PayPal and Venmo, making it a natural choice for businesses targeting consumers or enterprises in PayPal-heavy regions.

Strengths:

• Enterprise-grade with strong support for marketplaces
  
  
• Native PayPal and Venmo integration
  
  
• Good for hybrid models (consumer + enterprise SaaS)
  
  
• Flexible APIs and advanced fraud tools
  
  

Weaknesses:

• Compliance and tax still your responsibility
  
  
• Implementation more complex than Paddle
  
  
• Less startup-friendly compared to Stripe
  
  

Best fit: Larger SaaS, consumer SaaS, or marketplaces where PayPal is a dominant customer preference.

Pro Tip: Instead of asking “Which provider is best?” ask Which provider aligns with my SaaS model, compliance appetite, and growth stage?

‍

Framework for Choosing the Right Provider

To avoid costly missteps, evaluate each provider against five dimensions.

1. Billing Model Compatibility

• Stripe: Handles usage-based, tiered, seat-based, annual upfront, and custom contracts.
  
  
• Paddle: Best for simple, tiered monthly/annual SaaS pricing.
  
  
• Braintree: Good for hybrid models, including consumer subscriptions and marketplaces.
  
  

2. Compliance and Tax Handling

• Stripe: You own VAT, GST, and sales tax registration. Stripe Tax helps, but liability is yours.
  
  
• Paddle: Paddle owns compliance. You don’t need to register in dozens of jurisdictions.
  
  
• Braintree: You own compliance, similar to Stripe.
  
  

3. Global Expansion Strengths

• Stripe: Strongest for true global SaaS—135+ currencies, dozens of local methods.
  
  
• Paddle: Strongest in Europe due to VAT management. Less flexible elsewhere.
  
  
• Braintree: Strong in US, especially PayPal/Venmo-heavy markets.
  
  

4. Engineering and Product Control

• Stripe: Maximum control, high engineering overhead.
  
  
• Paddle: Minimum engineering, but limited customization.
  
  
• Braintree: Enterprise flexibility, but requires technical maturity.
  
  

5. Total Cost of Ownership

Headline fees don’t tell the full story. Consider hidden costs like compliance, headcount, and third-party tools.

‍

Comparative Analysis: Stripe vs Paddle vs Braintree

Fee Breakdown

*Effective cost includes compliance, fraud, and maintenance overhead.

‍

Hidden Costs of Stripe and Braintree vs Paddle

• Compliance Registrations: Setting up VAT in EU, GST in APAC, sales tax in US states can run $50K+ per year in legal/accounting.
  
  
• Engineering Headcount: Maintaining a Stripe integration with custom billing can cost an additional $100K–$200K annually in developer salaries.
  
  
• Third-party Tools: Many SaaS companies layer tools like Chargebee or Recurly on top of Stripe/Braintree to fill gaps in billing, which adds another $20K–$50K annually.
  
  

By contrast, Paddle’s higher cut often ends up cheaper once compliance and headcount costs are factored in.

‍

SaaS Growth Stage Playbook

The best provider often depends on ARR stage and complexity.

Pre-Seed / Early Stage (<$1M ARR)

• Recommendation: Paddle
  
  
• Why: Speed to launch, no compliance headaches, minimal engineering required.
  
  

Seed to Series A ($1M–$10M ARR)

• Recommendation: Stripe
  
  
• Why: Pricing complexity often emerges, usage-based models become relevant, and Stripe’s flexibility is unmatched. Paddle can still work if pricing is simple.
  
  

Series B+ ($10M+ ARR)

• Recommendation: Stripe or Braintree
  
  
• Why: At scale, compliance teams are in place, and engineering capacity exists to manage infrastructure. Stripe dominates global SaaS, while Braintree fits consumer-heavy or enterprise models tied to PayPal rails.
  
  

‍

Common Mistakes to Avoid

Mistake 1: Defaulting to Stripe without considering VAT

Founders often copy peers and launch with Stripe. Two years later, finance teams discover VAT non-compliance across 15 EU countries.

Solution: If you’re selling internationally at pre-seed, Paddle might be the safer launch choice.

Mistake 2: Comparing only headline fees

Stripe looks cheaper at 2.9% vs Paddle at 5%. But Stripe requires compliance, tax, and possibly third-party billing tools, which quickly erode savings.

Solution: Always calculate total cost of ownership, not just per-transaction fees.

Mistake 3: Delaying migration until it’s urgent

Founders often delay switching providers until compliance or billing issues force them. Migrations under pressure are expensive and messy.

Solution: Revisit your payment stack at each funding stage.

‍

SaaS Payment Provider Checklist

Use this decision checklist before committing:

• Does the provider support your billing model?
  
  
• Who is legally responsible for VAT and sales tax?
  
  
• What markets and currencies are supported?
  
  
• How much engineering effort is needed to implement and maintain?
  
  
• What tools will you need to add on top?
  
  
• What’s the effective cost after compliance and overhead?
  
  
• Can this provider scale with you from $1M ARR to $100M ARR?
  
  

‍

Conclusion & Next Steps

Stripe, Paddle, and Braintree each solve different SaaS problems. The decision is less about fees and more about compliance appetite, pricing flexibility, and growth stage.

Key takeaways:

• Stripe: Maximum flexibility, global reach, but compliance burden.
  
  
• Paddle: Simplifies compliance, best for early-stage SaaS with simple pricing.
  
  
• Braintree: Strong for enterprise SaaS or consumer models tied to PayPal.
  
  

The right decision prevents silent revenue leaks and ensures your payment stack compounds growth rather than holding it back.

‍