For freelance indie developers launching SaaS, info products, or developer tools, the Merchant of Record (MoR) decision is one of the most consequential choices in the launch stack. The MoR handles sales tax collection, VAT compliance, payment processing, chargebacks, refunds, and global jurisdiction navigation. Done right, it lets a solo developer ship globally without standing up a 50-state US sales tax infrastructure or registering for VAT in 27 EU countries.
Done wrong, it costs 5-8% of revenue, locks the developer into a platform with rough payouts, and creates a substantial moat to switching later.
Three providers dominate the 2026 conversation: Polar.sh, the open-source challenger that launched in 2024; LemonSqueezy, acquired by Stripe in July 2024 and continuing to operate under the LemonSqueezy brand; and Paddle, the established UK-based MoR that has been the institutional default since the late 2010s.
The right pick has shifted noticeably since LemonSqueezy joined Stripe. Here is the honest 2026 verdict.
What a Merchant of Record actually does
A regular payment processor (Stripe, PayPal, Square) handles payment movement but leaves tax and regulatory compliance to the merchant. The merchant is the legal seller of record. They owe sales tax in every US state where they have nexus, VAT in every EU country where they sell, GST in every Australian and Indian and Canadian jurisdiction they touch.
A Merchant of Record inverts that. The MoR is the legal seller. The customer's invoice shows the MoR's company name. The MoR collects, remits, and reports all taxes. The MoR handles chargebacks, refunds, fraud disputes, and bank reconciliation. The developer receives a clean monthly payout net of fees and taxes.
For a solo indie developer, the MoR model trades roughly 5-8% of revenue (in fees) for a compliance infrastructure that would cost $20,000-100,000/year to build independently. The maths favours the MoR for almost every indie launch under roughly $1M in annual revenue.
