Merchant of Record for WordPress Stores

Selling a plugin, a course or an ebook from WordPress gets complicated the day a buyer from another country pays. That sale can owe VAT in the EU or the UK, GST in India or Australia, or sales tax in a US state. Each one has its own registration and filing rules.

Most small stores can't keep up with all of that, so they skip countries or hope nobody asks. I'd hand the problem to a merchant of record instead: a payment provider that sells to the buyer on your behalf and handles the tax for you.

For a WordPress store selling digital products, my picks are simple:

• Dodo Payments has the lowest base fee of the three, at 4% + 40 cents, and takes PayPal and UPI.
• Paddle charges 5% + 50 cents with no extra fees for international cards or subscriptions, and its checkout opens on your own site.
• Polar suits a store with steady volume, because its paid plans drop the fee to as low as 3.4% + 30 cents.

All three connect to WooCommerce and Easy Digital Downloads through Stackless, the plugin I lead at Gatilab. Its Polar, Paddle and Dodo Payments gateways are free in both Lite editions, along with Stripe and PayPal. I'll come back to setup after the numbers.

What a Merchant of Record Does

A merchant of record (MoR) is the legal seller of each sale. The buyer pays the MoR, the MoR pays you, and everything the seller owes along the way becomes its job:

• Tax: it works out sales tax, VAT or GST for the buyer's location, charges it and pays it to each country.
• Invoices: it issues receipts that meet each country's rules.
• Disputes and fraud: it handles chargebacks and blocks risky payments.
• Payouts: it sends your earnings, minus its fee, on a schedule.

With Stripe or PayPal on your own account, you are the seller. Stripe Tax can calculate the tax for 0.5% per transaction where you're registered, but registering in each country and filing the returns stays with you.

Stripe now sells its own merchant of record service, Managed Payments, which covers more than 80 countries. It is a separate Stripe product and works through Stripe's own checkout.

So the trade is simple to state. A merchant of record costs more per sale than a plain card processor, and in return you never register for VAT in a country you've never visited.

Merchant of Record Fees Compared

These are the standard self-serve rates from each provider's pricing page on October 29, 2026. All three offer custom pricing at higher volume.

Polar also sells paid plans with lower rates:

• Pro: $20 a month, at 3.8% + $0.40
• Growth: $100 a month, at 3.6% + $0.35
• Scale: $400 a month, at 3.4% + $0.30

Accounts opened before May 27, 2026 stay on an older Early Member rate of 4% + $0.40, plus 0.5% on subscriptions.

What a $49 Sale Costs on Each

A percentage table hides the real money, so here is one example: a $49 plugin sold to a buyer paying by card. It is an example, not a store's actual numbers.

Stripe is the cheapest row every time, but its column leaves out the tax work, plus 0.5% for Stripe Tax where you're registered. Among the three merchants of record, Dodo Payments costs the least on every row. Paddle beats Polar's free plan on international sales, because Paddle adds nothing for a non-US card.

Polar's paid plan pays off sooner than it looks. On a $49 sale, Pro saves about $0.69 against the free plan, so it covers its $20 monthly fee from about 29 sales a month.

Paddle vs Polar vs Dodo Payments

All three are merchants of record for software and digital products. The differences sit in payment methods, payouts and how subscriptions behave.

Paddle

Paddle is the safest pick when you want PayPal and one flat fee for every buyer.

• Fee: 5% + $0.50, with PayPal and other payment methods at no extra cost. Paddle asks you to contact it for pricing on products under $10.
• Checkout: an overlay that opens on your own site, after Paddle approves your domain.
• Payment methods: cards, PayPal, Apple Pay, Google Pay and more. Some only work on one-time products.
• Payouts: once a month, with a $100 minimum.

Polar

Polar is the pick for a developer-led product with growing volume, because its fees are printed per plan and fall as you grow.

• Fee: 5% + $0.50 on the free Starter plan, down to 3.4% + $0.30 on Scale. Non-US cards add 1.5%.
• Checkout: a hosted checkout on Polar's site.
• Payment methods: cards, Apple Pay, Google Pay and Link, among others. PayPal isn't offered.
• Payouts: you withdraw manually, with a $10 minimum. Payouts carry Stripe's payout fees of $2 a month plus 0.25% + $0.25 each.
• Approval: the first account review can take up to 14 days.

Dodo Payments

Dodo Payments is the pick for the lowest base fee and the widest set of local payment methods, including UPI for Indian buyers.

• Fee: 4% + $0.40 for US cards and wallets. Non-US cards add 1.5%, subscriptions add 0.5% and PayPal adds 3%.
• Checkout: a hosted checkout with cards, UPI, Apple Pay, Google Pay, PayPal, Klarna and more.
• Payouts: twice a month, with a $100 minimum you can lower to $50. A payout under $1,000 costs $5.
• Disputes: $30 each, the highest of the three.

What a Merchant of Record Won't Let You Sell

A merchant of record takes on the legal risk of every sale, so it limits what you can sell. All three focus on software and digital products.

• Physical goods aren't allowed on Paddle, Polar or Dodo Payments.
• Human services such as custom design, development or coaching aren't allowed either.
• Every account is reviewed before it takes live payments, with checks on your business, your identity and your website.

A WooCommerce store that sells both T-shirts and downloads should keep Stripe or PayPal for the physical orders. A merchant of record only fits the digital half.

How to Set Up a Merchant of Record in WordPress

Paddle doesn't offer a WordPress plugin, so a gateway plugin does the connecting. Stackless includes all three for both WooCommerce and Easy Digital Downloads, and the gateways are part of the free Lite editions. The setup follows the same pattern for each:

1. Switch on the gateway module in the Stackless dashboard.
2. Create API keys in the provider's dashboard and paste them into the gateway settings, live and sandbox.
3. Add the webhook URL that Stackless shows you, so payments, renewals, refunds and cancellations reach your store.
4. Turn off WooCommerce tax for products sold through the merchant of record, or buyers get taxed twice.
5. Run a sandbox order before you switch to live mode.

Prices always come from your store. The provider charges the amount your checkout sends and adds tax on top or inside it, depending on the option you pick. The Polar setup guide and the Dodo Payments setup guide list every key, scope and webhook event. The walkthrough for selling digital products without handling sales tax covers the whole route.

The Limits

A merchant of record isn't the right call for every store:

• US-only sellers. If nearly every buyer is in your own state or country and you're registered there, Stripe's lower fee usually wins.
• One subscription per checkout. With Polar and Dodo Payments, a cart can hold one subscription and nothing else. Carts of one-time items can be any size.
• No signup fees on Polar. Polar charges the same amount every cycle, so a plan with a signup fee or a discounted first payment can't use it. Paddle takes signup fees.
• Slower money. Payouts arrive monthly or twice a month, while Stripe pays out on a rolling schedule.
• Fees change. The rates here come from each pricing page on October 29, 2026. Check them again before you choose.

FAQs on Merchants of Record

Is Stripe a merchant of record?

Not for a normal Stripe account. You are the seller, and Stripe Tax only helps you calculate tax where you're registered. Stripe's separate Managed Payments product does act as a merchant of record.

Do I still need to register for VAT with a merchant of record?

Not for the sales that go through it. The merchant of record is the seller, so it charges and pays the tax on those sales. Sales you take through your own Stripe or PayPal account are still yours to handle.

Can I use Paddle, Polar or Dodo Payments with WooCommerce?

Yes, through a gateway plugin. Stackless connects all three to WooCommerce and Easy Digital Downloads, including subscriptions, refunds and cancellations.

Final Remarks

If you're still unsure, I'd look at where last year's buyers came from. If most were outside your own country, a merchant of record pays for itself in tax work you never have to do. I'd start with Dodo Payments for the lower fee, or Paddle if your buyers want PayPal.

You can try all three without paying anything. I'd install Stackless Lite for WooCommerce or Stackless Lite for EDD, connect a sandbox account and run a test order before you move a single live sale.