Stripe vs Polar: payment processor or developer-focused merchant of record, fees by Polar plan, and payouts through Stripe Connect
Stripe charges 2.9% + $0.30 and leaves sales tax with you; Polar is a merchant of record for software and digital products with four plans, paying out through Stripe Connect. Rates as published on 27 September 2026, worked examples, and how Polar's plan changes the gap.
The short answer
Stripe is a payment processor: it moves the money, and you remain the seller, responsible for the sales tax or VAT owed on each sale. Polar is a merchant of record built for developers selling software, digital products and subscriptions. A merchant of record is the company that legally sells your product to your customer, so it calculates and handles the sales tax and VAT, then pays you what remains.
As published on 27 September 2026, a $100 sale paid with a US card costs $3.20 on Stripe and $5.50 on Polar's free Starter plan, a gap of $2.30. Polar's paid plans lower that rate in exchange for a monthly fee, so the gap depends on which plan you choose and how much you sell.
Two things usually decide it: whether you want to carry the tax work yourself, and whether you can receive payouts. Polar pays out through Stripe Connect, so a founder must be able to receive Stripe Connect payouts in their country. Without a US company, a merchant of record is a way to start; with a US LLC and a clear tax position, Stripe is usually cheaper as volume grows.
How they differ at a glance
| Stripe | Polar | |
|---|---|---|
| Type | Payment processor | Merchant of record for software and digital products |
| Standard card rate | 2.9% + $0.30 | Starter 5% + $0.50; lower on paid plans |
| International cards | +1.5% | +1.5% on all plans |
| Currency conversion | +1%, paid by you | No merchant conversion fee in our model; check Polar's fees page |
| Subscriptions | Stripe Billing +0.7% | No separate fee on the current plans |
| Sales tax / VAT | Your responsibility; Stripe Tax 0.5% where you are registered | Polar handles as merchant of record |
| Payouts | Standard free; Instant Payouts 1.5% (min $0.50) | Through Stripe Connect at cost: $2 per month with a payout + 0.25% + $0.25 per payout |
| Refunds and disputes | Processing fee not returned; dispute $15 | Fees not returned; dispute $15 regardless of outcome |
| Monthly fee | None | Starter $0; Pro $20; Growth $100; Scale $400 |
| Who can open | Businesses registered in a Stripe-supported country | Sellers from many countries who can receive Stripe Connect payouts |
Fees on the same sale
These figures are for a US account settling in USD, as published on 27 September 2026. Stripe uses its standard online card rate; Polar uses the free Starter plan. "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 | Polar (Starter) fee | Polar (Starter) net |
|---|---|---|---|---|
| $100 US card | $3.20 | $96.80 | $5.50 | $94.50 |
| $100 international card | $4.70 | $95.30 | $7.00 | $93.00 |
| $100 international card + FX | $5.70 | $94.30 | $7.00 | $93.00 |
| $100 international subscription | $5.40 | $94.60 | $7.00 | $93.00 |
| $29 US subscription | $1.34 | $27.66 | $1.95 | $27.05 |
| $29 international subscription | $1.78 | $27.22 | $2.39 | $26.61 |
| $1,000 international card | $44.30 | $955.70 | $65.50 | $934.50 |
| Charge needed to net $100 (US card) | $103.30 | $105.79 |
On the Starter plan the gap comes from the base rate, which is higher on both the percentage and the fixed fee. Both providers add 1.5% for international cards, so the gap holds on those rows and widens with the size of the sale: $21.20 on a $1,000 international sale. It narrows in two places. On the "+ FX" row, Stripe charges you 1% to convert and our model has no conversion fee for Polar. On subscriptions, Stripe Billing adds 0.7% while Polar's current plans add nothing.
The table leaves some costs out. Stripe's figures do not include Stripe Tax (0.5% on transactions where you are registered) or the cost of registering and filing tax returns yourself. Polar's figures do not include its monthly plan fee or its Stripe Connect payout costs. To test your own prices and switch between Polar's plans, use the Stripe fee calculator, the Polar fee calculator or the comparison across all gateways.
Stripe in practice
Stripe is pay-as-you-go. 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.
Recurring billing runs on Stripe Billing, which adds 0.7% (Billing pricing), so a subscription paid with a US card costs 2.9% + 0.7% + $0.30. Standard payouts to your bank are free, and Instant Payouts cost 1.5% with a $0.50 minimum. Disputes cost $15, with a further $15 if you counter, refunded if you win. Refunds do not return the processing fee.
The main limit is that you are the seller. You decide where you owe sales tax or VAT, register, collect, file and pay. Stripe Tax can calculate and collect for 0.5% on transactions where you are registered, but the obligation stays with you. The other limit is access: Stripe opens accounts only for businesses registered in countries on its supported list, and it reviews each application.
Polar in practice
Polar is a merchant of record aimed at developers selling software, digital products and subscriptions. It calculates and handles sales tax and VAT on the sales it makes for you, so you do not register in each place your buyers live.
Since 27 May 2026, new organisations choose one of four plans (introducing Polar plans; pricing). All add 1.5% for international cards, and none adds a separate subscription fee. The fee on a $100 US-card sale below is calculated from each plan's published rate:
| Polar plan | Monthly fee | Card rate | Fee on a $100 US card | Gap with Stripe ($3.20) |
|---|---|---|---|---|
| Starter | $0 | 5% + $0.50 | $5.50 | $2.30 |
| Pro | $20 | 3.8% + $0.40 | $4.20 | $1.00 |
| Growth | $100 | 3.6% + $0.35 | $3.95 | $0.75 |
| Scale | $400 | 3.4% + $0.30 | $3.70 | $0.50 |
A paid plan lowers the gap on every sale, but the monthly fee has to be earned back first, so it only helps once your volume is high enough. On subscriptions the comparison shifts further, because Stripe's rate becomes 3.6% + $0.30 with Billing: Polar's Growth plan matches that percentage, and its Scale plan is below it, before counting Polar's monthly fee and Stripe Tax. Organisations created before 27 May 2026 may still be on the legacy Early Member rate of 4% + $0.40, plus 0.5% on subscriptions.
Payouts are where Polar differs most. According to its fees page, Polar pays out through Stripe Connect and passes on the cost: $2 for each month in which you receive a payout, plus 0.25% + $0.25 per payout, and 0.25%–1% more for cross-border payouts. Disputes cost $15 whatever the outcome, and transaction fees are not returned on refunds. Like any merchant of record, Polar reviews what you sell, and it handles only the tax on the sale; your income tax and your company's own filings 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. A business registered in the UAE can apply for a UAE account; a founder in Egypt or Saudi Arabia usually applies through a company 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.
Polar. Polar onboards sellers from many countries, and its exact supported countries must be checked on its own site. Because it pays out through Stripe Connect, you must also be able to receive Stripe Connect payouts in your country, or in your company's country. Check that before you build your checkout around Polar; if Stripe Connect cannot pay out to you, Polar cannot either. Polar also reviews each seller and decides for itself.
A US LLC opens the US-priced Stripe account described here. Because the US is a Stripe-supported country, a US LLC with a US bank account is also relevant to Polar's payout question, but both providers still decide after their own review.
Which one to choose
Choose Stripe if:
- you have a US LLC, or a company in another Stripe-supported country;
- you sell to a limited number of tax jurisdictions, or mainly to businesses, and your adviser confirms your tax obligations are manageable;
- your volume is large enough that the gap per sale outweighs the cost of doing the tax work yourself;
- you want free standard payouts and Stripe's wider set of payment methods.
Choose Polar if:
- you sell software, digital products or subscriptions to consumers in many countries and do not want to register for sales tax or VAT in each;
- you can receive Stripe Connect payouts where you are;
- you are starting out: Starter costs nothing per month, and you can move to Pro, Growth or Scale when your volume makes the lower rate worth its monthly fee.
Using both. Some founders sell self-serve subscriptions through Polar and invoice larger business clients through their own Stripe account. That means two sets of payouts to reconcile, so plan which customers belong where before you start.
Frequently asked questions
Which is cheaper for a $29 monthly subscription?
Stripe, against Polar's Starter plan, as published on 27 September 2026. On a US card Stripe's fee is $1.34 and Polar Starter's is $1.95; on an international card, $1.78 and $2.39. On Polar's higher plans the subscription gap narrows because Polar adds no subscription fee while Stripe Billing adds 0.7%. Stripe's figure does not include tax compliance.
Can I use Polar without a US company?
Polar onboards sellers from many countries, so a US company is not a precondition in the way it is for a US Stripe account. The practical test is payouts: Polar pays out through Stripe Connect, so check that Stripe Connect can pay out to you in your country before you rely on it.
When is a paid Polar plan worth it?
When the saving per sale, multiplied by your monthly sales, is larger than the plan's monthly fee. The Polar fee calculator lets you switch plans and compare at your own price and volume.
Does Polar handle my income tax?
No. As merchant of record, Polar handles the sales tax and VAT on the sales it makes. Tax on your profit, and any filings your own company owes, remain yours.
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.
What comes next
- See what is prepared for you and which decisions stay with the providers on accepting payments from abroad.
- Test your own prices in the Stripe fee calculator, the Polar fee calculator and the all-gateways fee comparison.
- Check where Stripe accepts a business in Is Stripe available in Egypt, Saudi Arabia or the UAE?
- Compare Polar with the other merchant-of-record option in Stripe vs Dodo Payments and Dodo Payments vs Polar.
- If you decide on Stripe and need a US company first, read US company formation.