Joshua D'Costa
Growth & Marketing
Nov 4, 2024
|
3
min
Introduction
For Indian SaaS companies targeting global audiences, choosing the right Merchant of Record (MoR) is essential. More often than not, these partners have known to drop clientele without prior notice leading to huge losses of revenue for the merchant and without any quick back up.
An MoR takes care of international tax compliance, billing, and payment processing, making it easier for SaaS businesses to scale globally without regulatory and tax-related headaches. It becomes a critical piece for a builder to ship the product quick and generate revenue.
Here, we compare the top three MoR solutions for SaaS companies based out of India: namely Paddle, Lemon Squeezy, and Dodo Payments.
Why Use a Merchant of Record for SaaS?
An MoR as mentioned earlier plays a pivotal role in the stack required by any SaaS company whether run by a solopreneur or otherwise.
It manages payment processing, tax compliance, and legal responsibilities, allowing
SaaS businesses to streamline their operations and focus on growth.
For Indian SaaS founders, an MoR simplifies the complexities of cross-border transactions and local regulatory compliance, ensuring a smooth journey for scaling internationally.
You can read more about why you need to use an MoR here: Click here to read
Top 3 Merchant of Record Options for SaaS in India
1. Paddle
Paddle is a leading MoR solution, particularly popular among large SaaS companies due to its comprehensive suite of services. The platform is well-suited for enterprises looking for a robust, fully compliant billing and tax solution across multiple regions.
Pros:
Comprehensive enterprise features, including billing, reporting, and tax compliance.
Strong reputation and trust by established SaaS companies.
Reliable infrastructure for scaling businesses globally.
Cons:
Enterprise-focused: Ideal for larger SaaS companies rather than small startups or solopreneurs.
Slow onboarding: New merchants may experience a lengthy onboarding process.
Strict criteria: Not all businesses qualify due to Paddle’s criteria for Indian SaaS providers.
Pricing:
Paddle’s pricing is geared towards enterprise clients, with custom quotes for businesses based on their specific needs.
Fees for non-enterprise are 5% plus 50¢ per transaction
Additionally, there is a Non-Domestic currency fee of 3%.
2. Lemon Squeezy
Lemon Squeezy is an emerging MoR solution that simplifies payment processes and tax compliance for SaaS and Micro SaaS businesses. While it offers affordable pricing and easy integration, certain limitations may make it unsuitable for all Indian SaaS founders.
Pros:
Cost-effective and easy-to-integrate solution for smaller SaaS companies.
Simplifies billing and taxes for multiple regions.
User-friendly interface, making it easy for solopreneurs and small teams.
Cons:
Delayed onboarding for Indian merchants: Recent delays in onboarding and rejecting Indian SaaS companies have raised concerns.
Limited customer support: Slow support responses, with support tickets that sometimes take a while to resolve.
Corporate structure limitations: Lemon Squeezy primarily works with private limited companies, making it challenging for small firms and individual founders.
Pricing:
Lemon Squeezy charges around 5-7% transaction fee depending on your company size and revenue. Exact rates may vary, so it's best to contact their team for the latest pricing.
There are additional fees for payouts to your account and that can also vary based on location.
3. Dodo Payments
Dodo Payments is designed specifically for indie hackers, solopreneurs, and smaller SaaS founders in India. The platform is a flexible Merchant of Record solution that simplifies billing, tax compliance, and global payments with a focus on the Indian market.
Pros:
Tailored for Indian SaaS and Micro SaaS founders, making it accessible for smaller businesses.
The fast onboarding process for Indian merchants with no hidden conditions.
Efficient, responsive customer support and a dedicated team to help scale internationally.
Cons:
Limited enterprise features: While perfect for smaller SaaS companies, Dodo Payments may lack advanced enterprise features found in Paddle.
Newer player: As a newer entrant, Dodo Payments may not offer the same extensive integration options as larger MoR solutions like Paddle.
Pricing:
Dodo Payments charges competitive transaction fees of just 5% plus 50¢ per transaction.
You can refer the pricing page here: Click here
Conclusion: Choosing the Right MoR for Your SaaS Business
Choosing the best MoR solution for your SaaS business in India depends on your company’s size, target audience, and growth ambitions.
For larger, enterprise-focused SaaS companies, Paddle is a good choice with robust global capabilities.
Lemon Squeezy is affordable but has limitations, particularly with delayed onboarding and restricted support for Indian SaaS companies.
Dodo Payments, on the other hand, offers a highly tailored solution for indie hackers and smaller SaaS companies in India, with fast onboarding, customer support, and reasonable pricing.
Each of these Merchant of Record solutions has distinct features, so carefully assess what your SaaS business needs before choosing the MoR that will best support your growth and global aspirations.
