Joshua D'Costa
Growth & Marketing
Jan 31, 2025
|
5
min
Introduction
One of the most prominent names in the payment processor is Stripe, a platform known for its developer-friendly interface and extensive features. However, for SaaS businesses, the easiest way to handle their recurring billing solution is to switch to a Merchant of Records(MoR). A MoR will not only work as a payment processor but will handle chargebacks, legal compliance, tax audits, and much more.
In this blog, we will explore the limitations of Stripe and how a Merchant of Record (MoR) solution is the best Stripe alternative.
Stripe
Stripe is an American payment processing platform that has gained immense popularity among businesses of all sizes. It offers a wide range of features, including invoicing, subscription billing, and support for over 195 currencies.
However, despite its many advantages, Stripe has several disadvantages that may hinder Micro-SaaS founders and solopreneurs:
Problem with Stripe
Limited Accessibility in Emerging Markets
Stripe's recent shift to an "invite-only" model in countries like India has restricted access for many potential users.
Complex Integration
Stripe primarily serves as a payment gateway, necessitating additional tools for subscriptions, taxes, and invoicing. This can complicate the payment infrastructure for businesses that require a more streamlined solution.
Limited Global Support
Stripe is only available in only 46 countries and it has limited support in several countries, including Germany, Israel, India, Hong Kong etc,. This limitation can restrict market access for businesses looking to expand globally.
Tax Compliance Challenges
Managing sales tax across different jurisdictions is burdensome. Although Stripe has launched Stripe Tax, the tax calculation engine is limited to few countries and merchants still need to register, file, and remit taxes themselves in various regions.
Why Merchant of Record is a Better Option
Merchant of Record (MoR) solutions offer a compelling alternative to traditional payment processors. By acting as the intermediary between the business and its customers, MoRs handle all aspects of payment processing, including compliance, tax management, recurring payments, and customer support.
This is especially beneficial for Micro-SaaS founders and solopreneurs who often lack the resources to manage these complexities themselves.
Advantages of Using MoR Solutions
Simplified Compliance: Merchant of Record automates tax calculations and ensures compliance with local regulations across multiple jurisdictions.
Streamlined Payment Processing: By managing chargebacks and refunds, MoRs reduce the administrative burden on business owners.
Localized Payment: Merchant of Records provides access to various regional payment methods, enhancing customer experience and conversion rates.
Dedicated Support: Many MoRs as a platform offer personalized customer service tailored to the specific needs of small businesses.
Best Merchant of Records Options to Consider
Dodo Payments
Dodo Payments is an excellent Stripe alternative for Micro-SaaS founders who are looking for a Merchant of Record solution. Manages all aspects of Merchant of Records, Dodo Payments covers everything from simplifying taxes to being a global payment processor.
Key Features
Localized Payment Options
Dodo Payments supports local payment methods allowing businesses to cater to diverse customer bases while providing personalized checkout experiences.
Cross-Border Tax Compliance
The platform automates the calculation, collection, and remittance of VAT, GST, and sales taxes in over 150+ countries, ensuring compliance with minimal effort.
Subscription Management
It efficiently handles recurring payments with features like automated retries and detailed invoicing, helping minimize involuntary churn.
License Key Provisioning
The license key management system helps merchants secure their digital products by generating, managing, and tracking unique license keys.
Advantages of Dodo Payments
Transparent Pricing
Dodo Payments offers clear pricing structures with no hidden fees—4% + $0.40 per transaction
Quick Setup
Businesses can set up their accounts within 24-72 hours.
24/7 Personalized Support
Dedicated assistance ensures that users receive help whenever they need it.
Ideal for Micro-SaaS Founders
With features like subscription management, Dodo Payments is specifically designed for micro-SaaS businesses and indie-hackers
Paddle
Paddle is another Merchant of Record option that offers comprehensive tools for subscription management and global tax compliance. It addresses the critical aspects of payment management, covering everything from customer acquisition to renewals and expansions.
Key Features
Paddle offers comprehensive analytics tools that provide insights into customer behavior and revenue streams.
It provides strong support for subscription-based models, making it easier for SaaS companies to manage recurring payments effectively.
Paddle automates tax management for global operations, which is crucial for businesses operating in multiple jurisdictions.
Disadvantages of Paddle
Paddle is primarily designed for larger SaaS companies, making it less accessible for smaller businesses or micro-SaaS founders.
Paddle offers ticket-based and scheduled customer support, which may not be ideal for urgent inquiries or issues.
The platform's transaction processes are optimized for Western markets, potentially limiting its effectiveness in regions with different payment preferences.
New businesses may experience delays during the onboarding process
Final Thoughts
Though Stripe is an excellent Payment processing platform, it’s not a complete payment solution. Whereas, a right Merchant of Record will be a game-changer for your MicroSaaS business, taking care of everything from payment processing to ensuring tax compliance under one roof.
If you’re looking to transition away from payment processors like Stripe and ensure your business continues to thrive in 2025, consider Dodo Payments as your go-to Merchant of Record partner.
