TaxGuided
Payment Guide

Cross-Border Payment Platform Comparison

Stripe vs PayPal vs Wise vs Paddle — fees, features, and which is best for your foreign-owned US LLC

Key Takeaways

  • Stripe: 2.9% + $0.30 + 1% cross-border + 1% currency conversion — best for SaaS
  • PayPal: 3.49% + $0.49 + 1.5% cross-border — expensive but widely recognized
  • Wise: best for international payouts, not a payment gateway
  • Paddle/Lemon Squeezy: ~5% all-in but handles tax compliance automatically

Payment Gateway vs Transfer Service

When running a US LLC from overseas, you need two separate things: a payment gateway to accept customer payments, and a transfer solution to move money from your business bank to your personal account. These are different tools for different jobs.

Payment Gateways

Accept credit cards, process subscriptions, handle refunds. Examples: Stripe, PayPal, Paddle. Money goes into your US business bank account.

Transfer Services

Move money internationally between bank accounts. Example: Wise. Used to send owner distributions from your US business bank to your personal bank overseas.

Stripe

The most popular payment processor for SaaS and digital products. Excellent developer tools and the broadest feature set of any payment gateway.

Fee Structure

  • Domestic US cards: 2.9% + $0.30 per transaction
  • International cards: +1% additional
  • Currency conversion: +1% additional
  • Payout to US bank: Free (2-day rolling basis)

Pros

  • Best-in-class developer tools and documentation
  • Radar fraud prevention included
  • Supports subscriptions, invoicing, and one-time payments
  • Widely trusted by customers

Cons

  • Strict risk controls — new accounts may face holds or freezes
  • Cross-border + currency fees add up for international sellers

Best for: SaaS, digital products, subscriptions

Note:Stripe Atlas credits have been reduced from $100K to $2,500. If you're considering Stripe Atlas for LLC formation, factor this into your decision.

See our Stripe Setup Guide and Account Health Guide for detailed instructions.

PayPal

The most widely recognized payment brand globally. Higher fees than Stripe but offers buyer protection that some customers prefer.

Fee Structure

  • Standard rate: 3.49% + $0.49 per transaction
  • Cross-border: +1.5% additional
  • Currency conversion: 3-4% above mid-market rate

Pros

  • Strong brand recognition worldwide
  • Buyer protection builds customer trust

Cons

  • Most expensive total fees of any major processor
  • Frequent account freezes and holds
  • Poor developer experience compared to Stripe

Best for: Marketplaces, customers who insist on PayPal

Wise (for Payouts)

Wise is not a payment gateway — it is an international transfer service for moving money between bank accounts. Use it for payouts from your US business bank to your personal bank overseas.

Fee Structure

  • Currency conversion: ~0.5-1.5% (mid-market rate)
  • USD SWIFT transfer: Fixed $14 fee
  • FPS to Hong Kong: Near-instant, proportional fee

Best for: Moving money from US business bank to personal overseas bank (owner distributions)

Sign up through our link to get your first transfer fee-free.

Paddle & Lemon Squeezy

Merchant of Record (MoR) services. They handle everything — payment processing, sales tax, VAT collection, invoicing — so you don't have to.

Fee Structure

  • All-in rate: ~5% + $0.50 per transaction
  • Includes: Payment processing, sales tax, VAT, invoicing

Pros

  • Zero tax compliance headache — they handle everything
  • No chargebacks (they absorb them as merchant of record)
  • Simple integration

Cons

  • Higher effective rate than Stripe
  • Less control over the checkout experience

Best for:Solo developers who don't want to deal with tax compliance work

Comparison Table

Side-by-side comparison of all platforms.

Stripe

Base Fee: 2.9%+$0.30

Cross-Border: +1%

Currency Conv.: +1%

Tax Handling: Manual

Best For: SaaS/digital

PayPal

Base Fee: 3.49%+$0.49

Cross-Border: +1.5%

Currency Conv.: 3-4%

Tax Handling: Manual

Best For: Marketplace

Wise

Base Fee: Transfer only

Cross-Border: N/A

Currency Conv.: 0.5-1.5%

Tax Handling: N/A

Best For: Payouts

Paddle

Base Fee: ~5%+$0.50

Cross-Border: Included

Currency Conv.: Included

Tax Handling: Automatic

Best For: SaaS (hands-off)

Lemon Squeezy

Base Fee: ~5%+$0.50

Cross-Border: Included

Currency Conv.: Included

Tax Handling: Automatic

Best For: SaaS (hands-off)

Our Recommendation

For Most Foreign LLCs

Stripe for payments + Wise for payouts. This combination gives you the best developer tools, lowest effective fees for most use cases, and the cheapest international transfer rates.

Don't Want Tax Headaches?

Use Paddle or Lemon Squeezy. The higher rate buys you complete peace of mind — they handle sales tax, VAT, and invoicing automatically as your merchant of record.

Pro Tip: Always have a backup payment processor. If your primary account gets frozen (it happens), you need a way to keep accepting payments while you resolve the issue.

FAQ

Which platform has the lowest fees?

For domestic US transactions, Stripe has the lowest fees at 2.9% + $0.30. For international transactions with currency conversion, Paddle's all-in ~5% rate can actually be competitive once you add Stripe's cross-border and currency conversion fees together.

Can I use multiple platforms at the same time?

Yes, and it's recommended. Many businesses use Stripe as their primary processor and offer PayPal as an alternative for customers who prefer it. Having multiple processors also protects you if one account gets frozen.

Do I need to collect sales tax?

It depends on whether you have nexus in any US state. If you use Paddle or Lemon Squeezy, they handle this for you. Otherwise, check your obligations with our Sales Tax Nexus Tool.

Pro Tip: Set up your payment processor beforeyou launch your product. Account verification and approval can take days or even weeks, especially for foreign-owned businesses. Don't wait until you have customers ready to pay.