Own Stripe vs Merchant of Record: The Fee Math Over Time

Sam Bakker · Founder, GoCushy · July 19, 2026

There are two honest ways to look at the own-Stripe-versus-merchant-of-record decision. One is about who owns the customer — whose entity the buyer's card and subscription live inside — and we've written that one already: merchant of record vs your own Stripe. This post is about the more boring number that compounds quietly over a few years: the fee. Two checkout models charge you in structurally different ways, and once you sketch the math, the difference is hard to unsee.

Two ways to pay for a checkout

Strip away the branding and there are really only two pricing shapes on offer.

Model A — a cut of every sale. A merchant of record (MoR) bundles payment processing, tax compliance, and platform services into one per-transaction rate. You never see a monthly bill; the cost is skimmed off each sale as it happens. In return, the platform is the legal seller and takes the global sales-tax burden off your plate entirely.

Model B — pay for the tool, keep your processing rate. You run checkout on your own Stripe account. The card cost is just Stripe's standard processing fee, landing straight in your balance, and the software sitting on top charges you a flat amount instead of a slice of revenue. That's the model GoCushy runs — via Stripe Connect direct charges, we never hold your funds and are never the merchant of record.

Model A, fairly: what the cut buys

Let's be accurate about the competitors, because the MoR model is a genuinely good fit for some sellers. Gumroad takes about 10% + 50¢ per sale and is about as easy as selling gets — you can be live in an afternoon. Paddle and Lemon Squeezy are merchant-of-record platforms taking roughly 5% + 50¢ per transaction, and for that they register for, collect, and remit sales tax and VAT across jurisdictions on your behalf, and become the seller of record — carrying the tax liability and owning the payment relationship.

That convenience is real, and for someone who never wants to think about VAT registration it can be worth every cent. The trade you're accepting is a permanent percentage of every sale, plus giving up the direct Stripe relationship. It's a trade, not a ripoff — but it is a trade you keep paying.

Model B: pay flat, keep the rate

On your own Stripe, the platform layer stops being a percentage. GoCushy is $99 a month with everything included and 0% added platform fees — you still pay Stripe's standard processing rate, but nothing extra is skimmed on top by the platform. The software cost is flat; it doesn't grow when your revenue does.

The reflex objection is "but then I have to deal with tax." Not exactly — see below.

Side by side

The part that compounds: a worked illustration

The numbers below are round, illustrative figures chosen to show the shape of each model — not a quote, a promise, or a claim about your results.

Say you sell a $50 product. On a 5% + 50¢ merchant of record, the platform's take is about $3 on that sale. On your own Stripe with GoCushy, the platform adds $0 to that sale — the whole platform layer is a flat $99 a month, and you pay only Stripe's standard processing on the $50.

Now let the volume grow, and watch the two shapes diverge:

Stripe's standard processing fee applies underneath both columns — that's the cost of moving a card either way, and it isn't the point here. The point is the layer above processing: the MoR column is a percentage, so it climbs in lockstep with your revenue, while the GoCushy column reads $99 on every row no matter how big you get. A flat $99 a month doesn't care whether you sell ten things or ten thousand.

The honest break-even: at roughly $2,000 a month in sales, a 5% merchant of record and a flat $99 cost about the same. Below that, the percentage is the cheaper shape — which is exactly what gocushy's Free plan ($0 + a 3% platform fee) is for. Above it, the gap only widens in your favour.

"But they handle my tax" isn't exclusive

The strongest argument for a merchant of record is that tax simply vanishes. Worth being precise here: that isn't something only an MoR can do. GoCushy includes Stripe Tax support and sequential compliant invoices, so you can switch on tax collection on your own Stripe for the jurisdictions you're registered in. What you take on is the registering and remitting itself, where you actually owe. For a fuller walkthrough of how that works in practice, see handling VAT & GST on your own Stripe. (General product information, not tax advice — confirm your obligations with an accountant.)

Fee drift: the risk hiding in a percentage

There's a second, quieter reason the MoR bill grows. A percentage isn't only tied to your revenue — it's tied to the platform's pricing decisions, and those can move. Gumroad, for instance, has raised its fees over time, which is part of what has pushed some sellers toward lower-fee alternatives. When your cost is a slice of every sale, a rate change lands on all of your future revenue at once. A flat monthly tool cost can change too — but it changes in the open, as one number on a pricing page, not as a percentage riding silently on everything you sell.

When a merchant of record is the right call

Honesty cuts both ways. If you want zero tax admin, you're selling into many countries from day one, and you're happy to accept a cut of every sale as the price of never thinking about VAT again — a merchant of record is the right choice, and I'd point you at one without hesitation. The fee buys real work, and for that seller it's money well spent.

But if you expect to grow, and you'd rather the checkout layer cost the same at $250k/month as it did at $5k, the percentage model is the expensive shape over time. That's the case own-Stripe answers — and it's the one GoCushy is built for.

Frequently asked questions

Sam Bakker is the founder of GoCushy. He's spent a decade building funnel software for creators, and builds from New Zealand.