Before you pick a payment provider, it helps to understand one big idea: who is the legal seller of your subscriptions. That single choice changes who handles taxes, where your money lands, and what you set up.
The plugin lets you collect recurring payments through four providers: Stripe, Paddle, Polar, and Dodo Payments. They split into two camps. Stripe is a direct payment gateway. Paddle, Polar, and Dodo are Merchant-of-Record (MoR) providers. This page explains the difference in plain language and helps you choose.
Note You do not need to understand the technical details to make a good choice. The two questions that matter most are: do you want to handle your own sales tax / VAT, and do you want the money to land directly in your own account?
Two ways to sell: Direct vs Merchant of Record
Stripe Direct
With Stripe, you are the merchant of record. That means you are the legal seller of every subscription. The customer is buying directly from your business.
- The money goes straight into your own Stripe account.
- You are responsible for collecting and paying any sales tax or VAT yourself. Stripe offers an “automatic tax” feature that can calculate the right amount for you, but the legal responsibility to register and file still sits with you.
- You need your own Stripe account to use it.
Paddle, Polar & Dodo Payments Merchant of Record
With a Merchant-of-Record provider, the provider is the legal seller. Technically your customer buys from Paddle (or Polar, or Dodo), and the provider then pays you out.
- The provider handles sales tax, VAT, and invoicing automatically, worldwide.
- This is the big selling point: you can sell internationally without registering for tax in every country. The provider takes care of that compliance for you.
- The provider collects the money from the customer and then sends you a payout.
Tip If the words “VAT” and “sales tax registration” make you nervous, a Merchant-of-Record provider exists exactly to take that worry off your plate.
Merchant Acceptance Policy
Before choosing a payment provider, check that your website, business model, and listing niche are allowed. Payment providers may reject, suspend, or review businesses in prohibited, regulated, high-risk, or deceptive categories.
Examples of directory niches that are usually prohibited:
❌ casino/gambling directories,
❌ adult-service directories
❌ crypto or investment directories
❌ cannabis/CBD directories
❌ weapon/firearms directories
❌ high-risk lead-generation directories
Stripe Direct: Prohibited and Restricted Businesses
Paddle Merchant of Record: Acceptable Use Policy
Polar Merchant of Record: Acceptable Use Policy
Dodo Payments Merchant of Record: Merchant Acceptance Policy
Stripe Direct is usually the most flexible because you sell under your own business name, while Stripe only processes the payment.
Side-by-side comparison
Here is how the two approaches compare on the things that matter day to day.
| Aspect | Stripe Direct | Paddle / Polar / Dodo Merchant of Record |
|---|---|---|
| Who is the legal seller | You | The provider |
| Tax / VAT handling | You handle it yourself (optional “automatic tax” can help calculate) | Provider handles it automatically, worldwide |
| Where the money lands | Your own Stripe account | Provider collects it, then pays you out |
| Credentials you enter | A secret key + publishable key pair, separate for Test and Live modes | A single API key / access token / bearer token, tied to one environment (sandbox or production) |
| Customer billing portal (update card / cancel) | Built-in portal | Polar and Dodo have a customer portal. Paddle has no self-serve portal link from the plugin (no “Manage” button), so customers manage through Paddle’s own emails and links |
| Product setup | Create a product/price in the Stripe dashboard and paste its ID into the plugin | Create a product/price in the provider’s own dashboard and paste its ID into the plugin |
| Product ID format | Stripe Price ID (starts with price_) |
Paddle Price ID (pri_), Polar product UUID, Dodo product ID (pdt_) |
| Access control (granting & revoking) | Based on signed webhook notifications from Stripe | Based on signed webhook notifications from the provider |
Important For every provider, a customer’s listing-package access is granted and revoked based on signed webhook notifications. If webhooks are not set up correctly, customers may pay but not receive access (or keep access after cancelling). Each provider’s setup page covers exactly how to configure its webhook.
A note on credentials and products
Two practical differences are worth calling out before you set anything up.
Credentials. Stripe asks for a pair of keys (a secret key and a publishable key), and it keeps Test mode and Live mode separate, so you have two sets. The Merchant-of-Record providers are simpler here: each one needs a single token that already points at one environment, either a sandbox for testing or production for real sales.
Products. No matter which provider you pick, you always create the actual product and price in that provider’s own dashboard first, then copy its ID into the plugin. The plugin does not create products for you. The only thing that changes is what the ID looks like, as shown in the table above.
Which one should you choose?
There is no single “best” answer. It depends on how you want to run the money and tax side of your business.
- Choose Stripe if… You already use Stripe, you want the money directly in your own account, and you are comfortable handling your own tax / VAT (registering and filing where needed).
- Choose a Merchant-of-Record provider (Paddle, Polar, or Dodo) if… You sell internationally and want to avoid registering for and filing VAT / sales tax in many countries, and you are happy for the provider to be the seller of record and pay you out.
You pick one active provider at a time
In the plugin’s Settings tab you choose a single active provider using the provider selector. Only one provider can be active at a time.
Important You can switch providers later, but because each provider uses its own product IDs, switching means you will need to re-enter the product price IDs for the new provider. It is worth choosing carefully up front so you do not have to redo that work.
Once you have decided, head to your provider’s setup page for step-by-step instructions. The next page covers Stripe; the pages after it cover Paddle, Polar, and Dodo Payments.
