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Merchant of record (Stripe add-on) · by Stripe

Stripe Managed Payments

Stripe's merchant-of-record option for digital products: Stripe becomes the seller and handles tax in 80+ countries, fraud, disputes and buyer support for 3.5% on top of processing.

Visit stripe.com ↗ Alternatives Paid EU region
Stripe Managed Payments homepage
§1

Overview

Managed Payments is Stripe acting as merchant of record. When it is enabled on a Checkout Session or Payment Link, Stripe is the legal seller: it calculates, collects and remits sales tax, VAT and GST in more than 80 countries, screens fraud, fights disputes and gives buyers support through Link in 19 languages.

It is priced at 3.5% per successful transaction on top of standard processing, so a domestic US card costs about 6.4% + 30¢ in total, while an EEA-based account selling to EEA consumers pays about 5% + €0.25. Subscriptions also need Stripe Billing.

The distinctive design choice is that merchant of record applies per transaction, not per account. You can use it only for certain markets or products and keep selling directly elsewhere. Stripe announced it at Sessions in April 2025, added the API in February 2026 and has widened access since.

Scope is narrow: fully automated digital products only (software, SaaS, games, digital media, courses), no services or physical goods, no Connect platforms, and only Checkout or Payment Links as the payment surface.

§2

Pricing and plans

Plan Price What you get
Managed Payments 3.5% per successful transaction Added to standard Stripe processing (2.9% + 30¢ US; 1.5% + €0.25 standard EEA cards)

The 3.5% fee is charged in addition to normal Stripe processing fees, and the stripe.com FAQ says optional products such as Billing and local payment methods are separate. No setup fee or monthly minimum. Eligibility is reviewed per account: only direct integrations (no Connect), only digital products with an eligible tax code, and only businesses in the listed locations.

Source: stripe.com/managed-payments · prices as published, excluding tax.

§3

What it does

Tax as merchant of record
Sales tax, VAT and GST calculation, collection and remittance in 80+ countries and 35 product categories.
Per-transaction switch
Set managed_payments on a Checkout Session to decide sale by sale whether Stripe is the seller.
Buyer support through Link
Customers manage purchases and subscriptions at link.com with 24/7 support in 19 languages.
Dispute handling
Stripe responds to disputes on your behalf as the seller.
Adaptive Pricing
Prices are shown in the buyer's local currency across 150+ countries.
App-to-web checkout
Mobile apps can send buyers to a web checkout for in-app purchases.
§4

Strengths and limitations

Strengths

  • No new vendor for existing Stripe accounts; payouts follow your normal Stripe schedule
  • Can be applied only to some markets or products
  • Built by the Lemon Squeezy team and positioned by them as its successor
  • Works with Stripe Billing, Checkout and Payment Links

Limitations

  • 3.5% is added to processing, so a US card costs more than Paddle's all-in 5% + 50¢
  • Digital products only; professional services, physical goods and live events are excluded
  • No support for Connect, Elements-based custom forms or third-party tax integrations
  • Sellers must be in one of the listed business locations and pass an eligibility review
§5

Who it suits

Good for

  • SaaS and software sellers already on Stripe who want tax offloaded
  • Mobile apps moving purchases to a web checkout
  • Lemon Squeezy users planning a move within the Stripe family

Look elsewhere if

  • Sellers outside the supported business locations (see Polar, Dodo Payments or Paddle)
  • Marketplaces and platforms using Connect
  • Businesses selling services or physical goods
§6

Pricing history

  • Managed Payments added to the Stripe API

    Stripe's API changelog (version 2026-02-25.preview) adds the managed_payments parameter on Checkout Sessions. Pricing is 3.5% per transaction on top of standard processing fees. Source ↗

  • Stripe announces Managed Payments, built by the Lemon Squeezy team

    Announced April 29, 2025 at Stripe Sessions: a merchant-of-record option inside Stripe, applied per transaction, with a private preview planned. Lemon Squeezy said existing users needed no action. Source ↗

§7

Alternatives to Stripe Managed Payments

Tool From Free option Stages
Paddle Merchant of record for software
Usage-based Paid
PayPal Checkout Payment processor and wallet
Usage-based Paid
Razorpay Payment gateway (India, plus US, Singapore, Malaysia)
Usage-based Paid
Mollie Payment processor (Europe)
Usage-based Paid
Lago Open-source usage-based billing
— Open source
Paystack Payment gateway (Africa)
Usage-based Paid

All payments and billing →

§8

Questions

How much does Stripe Managed Payments cost?

3.5% per successful transaction, charged on top of standard Stripe processing fees.

Is Stripe Managed Payments a merchant of record?

Yes. Stripe becomes the seller for those transactions and takes on indirect tax, fraud, disputes and buyer support.

Can I use Managed Payments with Stripe Connect?

No. Stripe's docs list Connect platforms, Express accounts and platform-controlled accounts as unsupported.

What happened to Lemon Squeezy?

Stripe bought Lemon Squeezy in 2024 and its team built Managed Payments; Lemon Squeezy still runs as a separate product.

Sources read for this page