Collection №11 — Updated 9 August 2026
The best merchant of record platforms in 2026
A merchant of record is the legal seller on every sale you make. Registering for VAT in Romania or sales tax in Texas becomes the platform's problem instead of yours. Four of the five platforms here do that job in full. Payhip, the free option, covers UK and EU VAT and stops there. Pick by what you sell: subscription software that needs renewals and invoices, or one-off downloads that need a checkout link.
| Tool | Type | Cost | Verdict |
|---|---|---|---|
| SaaS billing | Paid | ★ Best overall | |
| Digital products | Paid | Easiest to start | |
| Open-source MoR | Paid | Best for developers | |
| Creator storefront | Paid | Best for creators | |
| Digital storefront | Free | Best free plan |
Paddle
★ Best overallThe established merchant of record for subscription software
Paddle is the seller of record on every transaction, so it registers, files and remits the tax itself in the countries it covers. Around that it runs the full billing stack: checkout, subscriptions, failed-payment recovery and B2B invoicing. There is an approval process before you can sell, and it takes software only.
Visit PaddleLemon Squeezy
Easiest to startCheckout, subscriptions and license keys with the least setup
Set up a product, drop its checkout overlay on your site, and it collects and remits sales tax and VAT on each sale as the merchant of record. License keys and file delivery are built in, which makes it a good fit for selling software one copy at a time. Stripe bought it in 2024. New stores are still open, and the same team is building a successor inside Stripe, Managed Payments, with a migration path planned.
Visit Lemon SqueezyPolar
Best for developersAn open-source merchant of record you integrate like an API
You wire it into your app with a few lines of code and it becomes the seller of record on every sale. A purchase can automatically grant a license key, a file download or access to a private GitHub repo. It is the youngest company on this list.
Visit PolarGumroad
Best for creatorsThe simplest way to sell an ebook, course or plugin
Upload a file, set a price, share the link; Gumroad sells it as the merchant of record and deals with the tax. Pay-what-you-want pricing and memberships are supported. It suits creators with an audience, and its billing stops well short of what Paddle offers a SaaS company.
Visit GumroadPayhip
Best free planA plain storefront for downloads, courses and memberships
Payhip gives you a storefront and checkout for digital downloads, courses and memberships. It is not a full merchant of record: it collects and remits UK and EU VAT on digital sales, and any other tax you register and file yourself. There is a real free plan, and coupons and an affiliate scheme are included.
Visit PayhipFrequently asked questions
What is a merchant of record?
A merchant of record is the legal seller on a transaction. Platforms like Paddle and Lemon Squeezy sell your product to the customer and pass the money to you, which means they register, collect and remit sales tax or VAT around the world. A plain payment processor does none of that.
Is Paddle or Lemon Squeezy better for a SaaS business?
Paddle is the stronger choice for a subscription business that needs B2B invoicing, failed-payment recovery and localized pricing, and it reviews every seller before approving them. Lemon Squeezy is quicker to set up and suits selling software licenses and digital products. Stripe acquired Lemon Squeezy in 2024.
Is Gumroad a merchant of record?
Yes. Gumroad sells your product as the merchant of record and handles sales tax and VAT on each sale. It works best for creators selling ebooks, courses and simple software; a SaaS company that needs subscriptions and invoicing is better served by Paddle or Lemon Squeezy.