The Real Cost of "Just Use Stripe"

When you sell a digital product globally, you do not just ship features.

You inherit tax systems.

VAT in Europe.
Sales tax across U.S. states.
GST in other regions.
Different invoice rules.
Different reporting obligations.

For a solo builder, that is not a small detail.

It can quietly become a second job.

So before I set up payments, I asked myself something simple:

Do I want to manage global tax rules - or focus on building the product?

That question made the decision for me.

What a Merchant of Record Actually Does

A Merchant of Record (MoR) is a company that legally sells your product on your behalf.

They:

• Process the payment
• Calculate and collect the correct taxes
• File and remit those taxes
• Handle tax-compliant invoicing
• Appear on the customer's card statement

I use Lemon Squeezy as my Merchant of Record.

From the customer's perspective, they are buying from Lemon Squeezy.

From my perspective, I receive the payout after fees.

"5% vs 2.9%" - What That Really Means

When people say "just use Stripe," they are usually thinking about payment processing fees - roughly 2.9% + $0.30 per transaction for card payments.

A Merchant of Record like Lemon Squeezy charges more - around 5% + $0.50 per transaction.

On paper, that looks inefficient.

But that extra percentage is not just payment processing.

It covers:

• Global VAT and GST handling
• U.S. state-level sales tax collection
• Ongoing tax filing and remittance
• Cross-border compliance exposure

The fee difference is visible.

The alternative cost is less obvious: time, attention, and ongoing responsibility.

And those do not stay constant - they grow as you sell into more regions.

For me, the decision was straightforward.

I am willing to pay a predictable premium.

Not because taxes are scary.

But because I'd rather spend my thinking energy on product - not on becoming an accidental international tax specialist.