Stripe is awesome, but not for worldwide SaaS licensing. (And also not for donation receipts.)

For the nonprofit organization I am currently founding, we want to collect money on a regular basis. Monthly recurring donations – it’s a thing! I try to establish this term..

Therefore I implemented Stripe, (the hottest pre IPO Startup currently?) and was totally flashed by the user experience and the developer experience. Awesome documentation, super easy to understand. Super powerful dashboard, everything usable and implementable out of the box with a set of test credentials. They provide even test credit cards! And also PSD2, GDPR .. Stripe checks all the boxes.

Donation receipts

But I realized, that Stripe can only issue invoices. You can’t adjust them so much that you end up with a donation receipt and all the necessary legal boilerplate.

And – independently of the legal document here, I have also learned this week, that there is a legal difference between donation receipts and invoices. However, it seems that invoices are even more suitable in this case. So all good, we will probably stay with Stripe.

And issuing invoices, man – Stripe totally can do that. You can calculate the tax rate for individual products for individual customers in individual countries. So this is perfect for our case, where we do business in a limited amount of countries (Germany, Austria, Switzerland) where we know the tax regulations for each.

Software as a Service subscriptions

What brings me back to the original topic. All those possibilities are good, but that’s also the problem. If you want to do business worldwide as a solo founder or small organization, it is almost impossible to have taxes right everywhere. If you offer worldwide business and organize it by yourself, chances are pretty high that you are a criminal – at least somewhere in the world.

So, under my other hat – as a for profit entrepreneur and software as a service developer it makes more sense to use a service like Paddle or Gumroad to handle the licensing.

The difference is in the licensing. Those services are basically licensing your product and issue the bill in their own name, take care of the money collection and pay out a large chunk of money once a month. This might cost 5% instead of 2,5% (at Stripe) for processing, but some one is not in the legal crossfire by himself.

By the way: For me it seems that Paddle is better suitable for monthly SaaS subscriptions and Gumroad for single purchases of digital products (e-books, icons, ..) of any kind.

Published by Klaus Breyer

a CTO and Startup Founder/Advisor, living in Berlin and probably offering consulting regarding this topic.

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