Stripe now sells its own merchant of record, Managed Payments, at 3.5% on top of processing

For years the merchant-of-record question had one answer for most small sellers: if you wanted someone else to be the legal seller and handle VAT and sales tax everywhere for you, you left your payment gateway and moved to Paddle or Lemon Squeezy. Stripe now offers that model itself. In a release dated 25 February 2026 it introduced Managed Payments, its own merchant-of-record option, so the choice is no longer only between a plain gateway and a separate MoR platform.

What Managed Payments actually does

With Managed Payments switched on, Stripe becomes the merchant of record for the sale. It takes responsibility for indirect taxes, sales tax, VAT and GST, across more than 80 countries, and also carries fraud prevention, chargeback and dispute handling, buyer support for the transaction, and order management. It is aimed at digital products: software subscriptions, downloads, virtual goods and in-app purchases. In practice that is the same job Paddle and Lemon Squeezy do, run inside Stripe rather than through a second provider.

What it costs

Stripe prices Managed Payments at 3.5% per successful transaction, charged on top of the normal payment processing fee, not instead of it. So the all-in cost is the MoR fee plus the card rate. On a standard EEA consumer card at Stripe (1.5% plus 0.25 euro), that is about 5% plus 0.25 euro per sale; on a US card at 2.9% plus 0.30 dollar it is nearer 6.4% plus 0.30 dollar. The EEA number lands in the same rough band as Paddle and Lemon Squeezy, which publish a blended rate of about 5% plus roughly 0.50 dollar per transaction that already folds processing in.

The part that changes the decision: it turns on per transaction

The structural difference from a dedicated MoR platform is that Managed Payments is applied at the transaction level. You accept the terms once, then flag individual checkouts as managed, so you can hand off the seller-of-record role for the cross-border digital sales that need it while keeping direct control of the rest, and without adopting a separate platform and re-plumbing your checkout. For a store already running on Stripe, that lowers the switching cost of trying the MoR model to almost nothing.

When it is worth paying for, and when it is not

The trade is the one the merchant-of-record model has always carried, and having Stripe offer it does not change the arithmetic, only who you buy it from. You pay a visible premium on every sale, roughly 3.5% here, in exchange for never registering for, charging or filing VAT and sales tax yourself. For a business selling digital products into many countries, where the alternative is tracking tax rules and thresholds in each market, that can be the cheaper choice once you price your own time and the risk of filing wrong. For a store selling mostly to one country, a plain gateway plus a single One Stop Shop return stays far cheaper, and the MoR premium is money you do not need to spend. Our guide to what taking a card really costs a European store walks the gateway-versus-MoR choice in full, and the free fee calculator prices your own basket and payment mix so you can put a number on the premium before you turn it on.