Foundlie.
Blog

Stripe vs Dodo Payments: payment processor or merchant of record, fees on the same sale, and who handles sales tax

Stripe is a payment processor that leaves sales tax and VAT with you; Dodo Payments is a merchant of record that handles them for a higher fee. Rates as published on 27 September 2026, worked examples on the same sales, and who can open each account from Egypt or the Gulf.

September 27, 2026 StripeDodo Paymentspayment gatewaymerchant of recordsales taxVAT
Foundlie article cover: Payments

The short answer

Stripe and Dodo Payments both let you take card payments online, but they sit in different places in the sale. Stripe is a payment processor: it moves the money, and you remain the seller, responsible for any sales tax or VAT owed on what you sell. Dodo Payments is a merchant of record: a company that becomes the legal seller of your product to your customer, so it calculates, collects and remits the sales tax or VAT on each sale and pays you what remains.

That difference explains most of the price gap. As published on 27 September 2026, a $100 sale paid with a US card costs $3.20 on Stripe and $4.40 on Dodo Payments, a gap of $1.20. On a $1,000 sale paid with a card issued outside the US, the gap is $11.10.

The deciding factor is rarely the rate alone. It is whether you want to carry the tax work yourself, and whether you have a company that Stripe will accept. For a founder without a US company, a merchant of record is a way to start selling. For a founder with a US LLC and sales in a limited number of tax jurisdictions, Stripe is usually the cheaper option as volume grows.

How they differ at a glance

Stripe Dodo Payments
Type Payment processor Merchant of record
Standard card rate 2.9% + $0.30 4% + $0.40 (cards and wallets)
International cards +1.5% +1.5%
Currency conversion +1%, paid by you Adaptive Currency: buyer pays 2–4% by default unless you absorb it
Subscriptions Stripe Billing +0.7% +0.5%
Sales tax / VAT Your responsibility; Stripe Tax 0.5% where you are registered Dodo calculates, collects and remits
Payouts Standard free; Instant Payouts 1.5% (min $0.50) $5 under $1,000, free from $1,000
Refunds and disputes Processing fee not returned; dispute $15 Refund $1; chargeback $30
Monthly fee None None
Who can open Businesses registered in a Stripe-supported country Sellers from many countries; check Dodo's list

Fees on the same sale

These figures are for a US account settling in USD, using each provider's standard card method, as published on 27 September 2026. "International" means a card issued outside the US; "+ FX" means the customer pays in another currency and the provider converts.

Scenario Stripe fee Stripe net Dodo Payments fee Dodo Payments net
$100 US card $3.20 $96.80 $4.40 $95.60
$100 international card $4.70 $95.30 $5.90 $94.10
$100 international card + FX $5.70 $94.30 $5.90 $94.10
$100 international subscription $5.40 $94.60 $6.40 $93.60
$29 US subscription $1.34 $27.66 $1.71 $27.29
$29 international subscription $1.78 $27.22 $2.15 $26.85
$1,000 international card $44.30 $955.70 $55.40 $944.60
Charge needed to net $100 (US card) $103.30 $104.58

The gap comes from the base rate: Dodo's percentage and its fixed fee are both higher than Stripe's, and both providers add the same 1.5% for international cards, so the gap holds on those rows and widens with the size of the sale. It narrows on subscriptions, because Stripe Billing adds 0.7% while Dodo adds 0.5%. It almost disappears on the "+ FX" row for a different reason: Stripe charges you 1% to convert, while Dodo's Adaptive Currency passes a 2–4% conversion fee to the buyer by default. That fee still exists; your customer pays it at checkout instead of you.

The table also leaves costs out. On Stripe it does not include Stripe Tax (0.5% on transactions where you are registered) or the cost of registering and filing tax returns yourself, which may mean paying an adviser. On Dodo it does not include the $5 payout fee on payouts under $1,000, the $1 refund fee or the $30 chargeback fee. To test your own prices, use the Stripe fee calculator, the Dodo Payments fee calculator or the comparison across all gateways.

Stripe in practice

Stripe is a payment processor with a wide product range. As published on its pricing page on 27 September 2026, online card payments on a US account cost 2.9% + $0.30, manually entered cards 3.4% + $0.30, and ACH Direct Debit 0.8% capped at $5. International cards add 1.5% and currency conversion adds 1%. There is no monthly fee, and standard payouts to your bank are free; Instant Payouts cost 1.5% with a $0.50 minimum.

Subscriptions run on Stripe Billing, which adds 0.7% (Billing pricing). Disputes cost $15, with a further $15 if you counter the dispute, and the fee is refunded if you win (dispute fees FAQ). When you refund a customer, Stripe does not return its processing fee.

The limit that matters most for this comparison is tax. Because you are the seller, you decide where you owe sales tax or VAT, register there, charge the right amount, file returns and pay. Stripe Tax can calculate and collect tax for 0.5% on transactions in places where you are registered, but the registration, the filing and the liability stay with you. The other limit is access: Stripe opens accounts only for businesses registered in countries on its supported list, and it reviews every application against its rules on restricted businesses.

Dodo Payments in practice

Dodo Payments is a merchant of record. Your customer buys from Dodo, and Dodo pays you what remains of the sale as a payout. As published on its pricing page and fee documentation on 27 September 2026, cards and wallets cost 4% + $0.40, international cards add 1.5% and subscriptions add 0.5%. ACH Direct Debit costs 1.5% capped at $15. There is no monthly fee.

In exchange for the higher rate, Dodo calculates, collects and remits sales tax and VAT on the sales it makes on your behalf. You do not register for those taxes in each place your buyers live, because you are not the seller in those places; Dodo is.

The costs outside the rate are worth reading. Adaptive Currency lets buyers pay in their own currency, and by default the buyer pays a 2–4% conversion fee unless you choose to absorb it. Payouts cost $5 when the amount is under $1,000 and are free from $1,000, and run twice a month by default once your balance is above $50. Each refund costs $1 and each chargeback $30.

A merchant of record takes on the legal sale, so it reviews what you sell before it agrees to sell it for you. It also handles only the tax on the sale itself. Your own income tax, and any annual filings your company owes, remain yours.

Who can use each one from Egypt or the Gulf

Stripe. As of 27 September 2026, Stripe's supported-countries list includes the UAE but not Egypt or Saudi Arabia. The list is about where the business is registered, not where the founder lives. A business registered in the UAE can apply for a UAE account. A founder in Egypt or Saudi Arabia usually applies through a company registered in a supported country, commonly a US LLC, which can apply for a US Stripe account at the US rates above (requirements for a US Stripe account). Foundlie forms the US LLC, but Stripe decides after its own review, and approval is never guaranteed.

Dodo Payments. Dodo is a merchant of record that onboards sellers from many countries. Whether your country, and your product, are accepted must be checked on Dodo's own site before you build around it. As with Stripe, Dodo reviews each seller and decides for itself.

A US LLC opens the US-priced Stripe account described here. It is not required to sell through a merchant of record, which is why a merchant of record is often the first option for a founder who has not formed a company yet.

Which one to choose

Choose Stripe if:

  • you already have a US LLC, or a company in another Stripe-supported country;
  • your sales reach a limited number of tax jurisdictions, or you sell mainly to businesses under contracts and your adviser confirms your tax obligations are manageable;
  • your volume is large enough that the gap, $11.10 on every $1,000 international sale, is worth more to you than the time and adviser fees the tax work costs;
  • you want Stripe's wider range of payment methods, such as ACH Direct Debit at 0.8% capped at $5.

Choose Dodo Payments if:

  • you do not have a company in a Stripe-supported country and want to start selling now;
  • you sell digital products or software to consumers in many countries and do not want to register for sales tax or VAT in each of them;
  • your volume is still small, so the fixed cost of tax compliance would be larger than the extra fee per sale.

When the tax work is worth paying to avoid

Where you owe sales tax or VAT depends on what you sell, whether you sell to consumers or businesses, and where your buyers are. US states set their own rules and thresholds, and many countries tax digital sales to consumers where the consumer lives. Each registration brings returns to file on a schedule, whether or not you made sales that period. Ask a tax adviser which of these apply to your product before choosing.

Paying a merchant of record makes sense when those obligations are spread across many places and your revenue is too small to justify the setup. It makes less sense once your revenue is steady and your obligations are known: at that point the per-sale gap is a recurring cost, and handling tax yourself, with Stripe Tax or an adviser, is usually cheaper.

Using both. Some founders start on Dodo Payments while the company is being formed, then open Stripe for business clients or for markets where their tax position is clear. Running both means two dashboards, two sets of payouts and two reconciliations, so plan how existing subscribers will move before you switch.

Frequently asked questions

Which is cheaper for a $29 monthly subscription?

Stripe, as published on 27 September 2026. On a US card, Stripe's fee is $1.34 and Dodo Payments' fee is $1.71. On an international card, Stripe's fee is $1.78 and Dodo's is $2.15. Stripe's figure does not include tax compliance, which Dodo's does.

Can I use Dodo Payments without a US company?

Dodo Payments onboards sellers from many countries, so a US company is not a precondition in the way it is for a US Stripe account. Check Dodo's current list of supported countries and accepted products for your case, and expect a review of your business before you can receive payouts.

Does Stripe collect sales tax for me?

Stripe Tax can calculate and collect sales tax and VAT for 0.5% on transactions where you are registered. You still decide where to register, file the returns and carry the liability, because you are the seller.

Does a merchant of record handle my income tax?

No. Dodo Payments handles the sales tax and VAT on the sales it makes. Income tax on your profit, and any filings your own company owes, remain your responsibility.

Why is the gap so small when the customer pays in another currency?

Stripe charges you 1% to convert the payment, which raises its fee. Dodo's Adaptive Currency charges the buyer a 2–4% conversion fee by default, so it does not appear in your fee. Your customer pays it at checkout instead, unless you choose to absorb it.

What comes next