Payment Processor Fees Compared: Stripe, Polar, Lemon Squeezy, Gumroad

When you’re building a product, specifically if it’s your first time, one of the more difficult decisions you need to make is how you’re going to accept payments.

There are a lot of options out there, and it can be overwhelming to figure out which one is the best fit for you. There are a lot of factors to consider, such as the type of product you’re selling, the volume of transactions you expect, how you plan to handle your taxes, and almost always, the fees.

Each payment processor has a different fee structure, usually based on the services they offer and what kind of features they provide.

In this post, we’ll compare the fees of Stripe, Polar, Lemon Squeezy, and Gumroad. We’ll look at the fees for each platform and how they compare to each other.

Through this post, we’re going to use a $25,000 transaction amount as an example, and calculate how much you would pay each platform if for that amount of transactions.

Stripe: Transaction Fees and Payment Processing for Online Businesses

First, let’s start with Stripe. Stripe is one of the most popular payment processors out there, and for good reason. They offer a wide range of services, including payment processing, invoicing, and even accounting.

They have a rather simple fee structure, charging 2.9% + 30¢ per transaction standard fee per transaction. This is their base standard fee, but it could get lower or higher depending on your volume of transactions and whether you’re using their other services, like invoicing or accounting.

So, let’s calculate how much you would pay Stripe for $25,000 in transactions.

25,000 * 2.9% + 30¢ = $725 + $0.30 = $725.30

So, for $25,000 in transactions, you would pay $725.30 to Stripe.

If you end up using Stripe, you can check out our other blog posts on Adding Coupon Codes to Stripe Checkout and Integrating Stripe Checkout with Remix.

Polar: A Developer-Friendly Payment Platform Focused on SaaS and Developers

Next, let’s look at Polar. Polar is another payment platform that is focused on helping developers sell SaaS and digital products. It offers tools for payments, subscriptions, and automated access, including private GitHub repo invites, Discord access, and license key generation. It also acts as the Merchant of Record, handling sales tax and VAT. Polar aims to simplify the process of selling digital products for developers.

Before we dive into Polar, let’s first understand what a Merchant of Record is.

What is a Merchant of Record?

A Merchant of Record (MOR) is a legal entity that assumes the responsibility of collecting sales tax and VAT on behalf of the seller. This means that Polar or any other MOR will handle the sales tax and VAT for you, so you don’t have to worry about it.

Usually these services charge a higher fee than just the transaction fee like Stripe does, but it’s important to note that with the MOR service, you don’t have to worry about the sales tax and VAT.

Polar Fees

Now, let’s look at Polar’s transaction fees. Polar charges a base fee of 4% + 40¢ per transaction. Additionally, there is an international card fee of +1.5% for non-US cards and a subscription fee of +0.5% for subscription payments. Polar also reserves the right to pass on any future fees imposed by Stripe. These fees can vary based on your transaction volume and the use of additional services like invoicing or accounting.

So in summary:

• Base Fee: 4% + 40¢ per transaction.
• International Card Fee: +1.5% for non-US cards.
• Subscription Fee: +0.5% for subscription payments.
• Potential Additional Fees from Stripe.

So now, going back to our $25,000 transaction amount, let’s calculate how much you would pay Polar for $25,000 in transactions.

25,000 * 4% + 40¢ = $1000 + $0.40 = $1000.40

So for $25,000 in transactions, you would pay $1000.40 to Polar.

Lemon Squeezy: A Platform for Selling Digital Products and Subscriptions

Next up, we have Lemon Squeezy. Lemon Squeezy is another platform focused on selling digital products and subscription. It offers similar features to Polar, in addition to a few more such as a built-in affiliate program and a newsletter service. Lemon Squeezy charges a base fee of 5% + 50¢ per transaction.

Let’s calculate how much you would pay Lemon Squeezy for $25,000 in transactions.

25,000 * 5% + 50¢ = $1250 + $0.50 = $1250.50

So for $25,000 in transactions, you would pay $1250.50 to Lemon Squeezy.

Gumroad: A Platform for Selling Digital Products and Subscriptions

Finally, we have Gumroad. Gumroad is another payment processor, in my mind, it’s the most similar to Lemon Squeezy where they are focused on selling digital products for creators. Gumroad charges a base fee of 10% + 2.9% per transaction.

Let’s calculate how much you would pay Gumroad for $25,000 in transactions.

25,000 * 10% + 2.9% = $2500 + $725 = $3225

So for $25,000 in transactions, you would pay $3225 to Gumroad.

Comparing Stripe, Polar, Lemon Squeezy, and Gumroad transaction fees

So now that we’ve calculated the fees for each platform, let’s compare them.

Platform	Fee Structure
Stripe	2.9% + 30¢ per transaction
Polar	4% + 40¢ per transaction
Lemon Squeezy	5% + 50¢ per transaction
Gumroad	10% + 2.9% per transaction

As you can see, Stripe is the cheapest option for smaller transactions, but it doesn’t offer a lot of the features that other platforms do. For example:

• Polar offers many built-in features targeted towards developers. These include private GitHub repository invites, Discord server access, and license key generation. These features help those selling software or developer tools.

• Lemon Squeezy provides a focus on selling digital products. It includes features like a simple checkout process and a built-in affiliate system. These features make it suitable for creators selling ebooks, courses, or other digital items.

• Gumroad aims to help creators sell directly to their audience. It provides tools for selling various types of products, such as digital downloads, memberships, and physical goods. Gumroad also offers features like email marketing and customer management, all within the platform. This makes it a good option for creators who want to manage their sales and customer interactions in one place.

Conclusion

At the end of the day, the best platform depends on the type of your business, the products you’re selling, the volume of transactions you expect, and the features you need.

In a lot of cases, the additional features that these platforms offer can outweigh the transaction fees. For example, if you’re selling a digital product, you might want to use Lemon Squeezy because it has a built-in affiliate program and a newsletter service.

So, in the end, it’s important to weigh the transaction fees against the features you need.