Choosing how to accept payments for software, digital products, or subscriptions is one of the most consequential decisions for developers and creators. The landscape splits into two main approaches: payment processors, which move money and leave compliance to you, and Merchant of Record (MoR) platforms, which sell on your behalf and handle tax and regulatory burden. Within the MoR category, solutions differ widely in pricing, developer experience, and target audience.

This article explains how Polar differs from other payment components—Stripe, Paddle, Lemon Squeezy, and Gumroad—so you can choose the right fit for your product and scale.

Before comparing Polar to specific providers, it helps to understand the two dominant models.

A payment processor moves money between the customer’s card and your account. It:

What stays with you: You are the seller of record. You are responsible for:

So you get maximum control and (often) lower base fees, but you carry the legal and operational burden of selling internationally.

A Merchant of Record (MoR) is the legal seller to the end customer. The MoR:

What you get: Global sales without building or maintaining tax, legal, or compliance infrastructure. The tradeoff is usually a higher all-in fee that bundles processing + MoR services.

Polar, Paddle, and Lemon Squeezy are MoR platforms. Stripe is a payment processor (though it offers add-ons like Stripe Tax for an extra cost). Gumroad operates as an MoR-style platform with its own fee and marketplace model.

Polar (polar.sh) is a complete billing infrastructure platform built for developers who monetize software. It is not “just” a payment form or a processor: it combines:

Polar is open source (Apache 2.0), with a TypeScript-first API, framework adapters (Next.js, Laravel, BetterAuth, and others), and a “6-line integration” story for supported stacks. Pricing is 4% + 40¢ per transaction with no monthly minimums; MoR and tax are included.

When Stripe makes sense: You sell mainly in one or a few jurisdictions, have (or want) in-house or external support for tax and compliance, and want the lowest base processing rate and maximum control over checkout and branding.

When Polar makes sense: You want to sell software or digital products globally from day one without dealing with VAT/GST/sales tax, and you want billing + automated delivery (licenses, downloads, GitHub, Discord) in one product. Polar’s all-in fee can be lower than Stripe once you add tax compliance and operational cost.

Paddle is an established MoR; Polar positions as a modern, developer-first alternative with roughly 20% lower fees (e.g. ~$4,000 vs ~$5,000 on $100k monthly revenue), open source, and tooling aimed at current dev stacks.

When Paddle makes sense: You prefer a long-standing, closed MoR and don’t need the lowest fee or open source.

When Polar makes sense: You want the same MoR benefits with lower cost, modern DX, and full transparency (open source, public roadmap).

Both are MoR platforms with similar benefits (global tax, simplicity). Lemon Squeezy favors non-technical or low-code users; Polar favors developers who need advanced subscriptions, usage-based billing, and the ability to scale without migrating later.

When Lemon Squeezy makes sense: You’re a solo creator or indie hacker and want the simplest possible setup with minimal code.

When Polar makes sense: You’re a developer who wants the same simplicity at the start but with room to grow (APIs, webhooks, usage billing, entitlements) and lower fees (4% vs 5%).

Gumroad is well-known for creators and has a marketplace; fees can be high until you reach higher lifetime tiers. Polar targets developers and software products with a single, transparent fee and no marketplace dependency.

When Gumroad makes sense: You want a creator-focused brand, optional marketplace visibility, and are comfortable with tiered fees and higher effective cost at lower volumes.

When Polar makes sense: You sell software or dev-focused digital products and want predictable pricing, no marketplace lock-in, and strong APIs and entitlements (licenses, GitHub, Discord, files).

Polar sits in the Merchant of Record category alongside Paddle and Lemon Squeezy, but it is built specifically for developers and software monetization. Its differences from other payment components come down to:

If you want to sell software or digital products globally with minimal tax and delivery overhead, and you care about developer experience, transparency, and cost, Polar is designed to be a strong fit among today’s payment and billing options.