Billing is the part of a SaaS MVP founders most often get wrong — not because the code is hard, but because the choice is. Pick the wrong provider and you either bolt on tax compliance you did not plan for, or discover your customers cannot pay you the way they want to. This guide compares the four options that come up most in 2026 — Stripe, Razorpay, Paddle and DodoPayments — and, more importantly, the one distinction that decides between them.
The short answer
The real question is not “which brand” but “gateway or merchant of record.” If you bill Indian customers in INR, Razorpay is the natural fit. If you sell globally and want to never think about sales tax again, a merchant of record — Paddle, DodoPayments or Lemon Squeezy — is worth the higher fee. If you want maximum flexibility and control and you are prepared to handle tax (with something like Stripe Tax), Stripe is the developer-first default where it is available. Most Indian SaaS teams end up using Razorpay for domestic collection and a merchant of record or Stripe for international customers.
At a glance
| Provider | Type | Best for | Tax / compliance | Main watch-out |
|---|---|---|---|---|
| Stripe | Payment gateway | Global, developer-first products | You handle tax (Stripe Tax helps) | More limited in India; RBI rules on recurring |
| Razorpay | Payment gateway (India) | India-based businesses billing INR | GST invoices; RBI e-mandates handled | India-centric; lighter global reach |
| Paddle | Merchant of record | Global SaaS that wants tax off its plate | Acts as reseller; handles VAT/sales tax | Higher fees; less checkout control |
| DodoPayments | Merchant of record | Global SaaS wanting MoR simplicity | Handles global tax as reseller | Newer, smaller ecosystem |
The one concept that decides it: gateway vs merchant of record
A payment gateway — Stripe or Razorpay — moves money from your customer to you. You are the seller, which means you are legally on the hook for charging and remitting the right sales tax or VAT in every jurisdiction where you have customers. That is manageable domestically and increasingly automated by tools like Stripe Tax, but it is real, ongoing responsibility.
A merchant of record (MoR) — Paddle, DodoPayments, Lemon Squeezy — becomes the legal seller of your product. Your customer buys from them; they pay you out. In return they handle VAT, sales tax and the compliance paperwork across countries. You pay a higher effective fee, but for a small team selling worldwide, that can be cheaper than the accountant and the risk. Getting this distinction right on day one is more valuable than any feature comparison.
What good SaaS billing actually has to do
Before comparing brands, know what you are buying. Billing for a SaaS is more than “take a card.” A real setup handles recurring subscriptions and plan changes, proration when someone upgrades mid-cycle, dunning (retrying failed payments and nudging customers before they churn), tax-compliant invoicing, multi-currency if you sell across borders, and clean webhooks so your app always knows the truth about every payment. Weigh each provider against that list, not against its landing page — the gaps are what cost you later.
Stripe — the developer-first global default
Stripe is the most flexible, best-documented option, with deep support for subscriptions, usage-based and metered billing, invoicing, and a huge ecosystem. If your customers are primarily in the US, Europe or other well-served markets and your team wants full control over the billing logic and checkout, Stripe is usually the right call. Stripe Tax can automate a lot of the compliance a gateway leaves to you.
The caveats for an India-based team: Stripe operates in India but with more restrictions than elsewhere, and India’s RBI rules on recurring payments change how subscriptions behave. If your revenue is mostly domestic INR, Stripe alone is often not the smoothest path.
Razorpay — the right default for billing in India
For an Indian company collecting payments from Indian customers, Razorpay is hard to beat. It supports the payment methods Indians actually use — UPI, cards, netbanking, wallets — issues GST-compliant invoices, and handles the RBI e-mandate framework that governs recurring payments in India. If your MVP’s first customers are in India, start here; it removes a whole category of local-compliance friction that global-first providers do not handle natively.
Razorpay’s global reach is lighter than Stripe’s, so if you later expand to a mostly-international customer base, you will likely pair it with Stripe or a merchant of record rather than replace it.
Paddle — merchant of record for global SaaS
Paddle is a mature merchant of record built specifically for software. It handles global sales tax and VAT, subscriptions, and dunning, and it is a strong fit for a small team selling to customers in many countries who does not want to become a part-time tax department. The trade-off is a higher effective fee and less control over the checkout experience than a raw gateway gives you.
DodoPayments — a newer merchant-of-record option
DodoPayments is a newer merchant of record aimed at exactly the same problem: let a small SaaS sell globally while someone else owns the tax compliance. It is webhook-driven and straightforward to integrate for subscriptions and one-time purchases. As a younger platform its ecosystem is smaller than Paddle’s or Stripe’s, so weigh the simplicity against maturity — but for founders who want MoR simplicity without heavy setup, it is a credible choice.
Lemon Squeezy and the rest
Lemon Squeezy is another merchant of record, popular with indie hackers and smaller digital-product businesses, and now part of Stripe. At small scale it is a fine choice for the same reason as Paddle — it owns the tax problem. Beyond these, you will also see Chargebee and Recurly, which are subscription-management layers you run on top of a gateway rather than replacements for one. For most MVPs, though, the decision collapses back to the gateway-versus-merchant-of-record question above.
A quick decision guide
- Your first customers are in India, paying in INR → Razorpay.
- You sell globally and never want to touch sales tax → Paddle or DodoPayments (merchant of record).
- You want maximum control, your markets are well-served, and you will manage tax → Stripe (+ Stripe Tax).
- You are an Indian company selling worldwide → Razorpay for domestic, plus Stripe or an MoR for international.
India specifics worth knowing
Two things catch Indian SaaS founders out. First, RBI e-mandate rules: recurring card payments in India need a registered mandate and, above certain limits, extra authentication — which is why a local gateway that implements this natively saves you real pain. (The exact limits change, so confirm the current RBI thresholds before you design your subscription flow.) Second, GST: you need compliant tax invoices for Indian customers, which Razorpay handles and a foreign-first gateway may not. If India is your primary market, choose for these realities, not just for developer experience.
Common billing mistakes in a SaaS MVP
A few errors show up again and again. Trusting the client to tell your backend a payment succeeded — always confirm through a signed webhook instead. Ignoring tax until launch — decide gateway-versus-MoR before you build, because switching later is a migration. Hard-coding one provider throughout your code instead of modelling plans and entitlements in your own database. Skipping dunning — a surprising share of “churn” is just failed cards nobody retried. And getting proration wrong, so upgrades and downgrades quietly over- or under-charge. None of these are hard to do right early; all are painful to fix once real money is flowing.
How we build billing into an MVP
Whatever provider you pick, the architecture matters more than the brand. We create subscription state on the backend only when the provider confirms payment through a signed, idempotent webhook — never trusting the client — and we model plans and entitlements in your own database so you are not locked to one vendor. Proration, failed-payment retries and upgrade/downgrade flows get built correctly the first time, because they are genuinely painful to retrofit once you have paying customers.
If billing is part of a larger build, our SaaS MVP development service scopes the right payment stack in discovery, and the MVP development for startups page shows how it fits the whole first release. Building in India and want to talk it through in person? See our Chennai SaaS development page, or just talk to our team.