Payment Gateways for SaaS Products – Best Options for Startups

Discover the best payment gateways for SaaS products including Stripe, PayPal, Paddle, and Lemon Squeezy with tips to choose the right platform.

Choosing the right payment gateway is one of the most important decisions for any SaaS business.

Even if your product is amazing, a bad payment system can destroy conversions. I learned that hard way so now you don't have to.

Your payment gateway affects:

  • How easily users can pay

  • Global reach

  • Fees

  • Security

  • User experience

This guide will help you pick the best payment gateway for your SaaS product.

What Is a Payment Gateway?

A payment gateway is the system that lets your SaaS accept:

  • Credit cards

  • Debit cards

  • PayPal

  • Bank transfers

  • Subscriptions

Without a payment gateway, you cannot monetize your SaaS.

saas subscription payment flow diagram

What SaaS Businesses Need From a Payment Gateway

Before choosing one, make sure it supports:

  • Recurring subscriptions

  • Multiple currencies

  • Secure payments

  • Easy integration

  • Refund handling

  • Invoices

  • Global payments

These are essential for any serious SaaS product.

Best Payment Gateways for SaaS Products

Let’s go through the most popular options.

1. Stripe – The Best Overall Choice

Stripe is the most popular payment gateway for SaaS companies.

Why Stripe is great:

  • Built for subscriptions

  • Developer friendly

  • Supports many countries

  • Excellent API

  • Easy to integrate

  • Automatic invoicing

Most modern SaaS startups use Stripe.

Best for:

  • Subscription-based SaaS

  • Global products

  • Startups

  • Software businesses

2. PayPal – Easy and Trusted

PayPal is one of the oldest and most trusted platforms.

Good for:

  • Quick setup

  • Global customers

  • Non-tech founders

  • Simple products

But PayPal is not as flexible as Stripe for SaaS subscriptions.

3. Paddle – Perfect for SaaS Billing

Paddle is designed specifically for SaaS.

It handles:

  • Taxes

  • Subscriptions

  • Invoicing

  • Merchant of record

This means less legal headache for you.

Best for:

  • International SaaS

  • Founders who want simple compliance

  • Subscription products


stripe vs paypal vs paddle comparison for saas payments

4. Lemon Squeezy – Great for Indie Founders

Lemon Squeezy is becoming very popular.

It offers:

  • Simple setup

  • Subscription management

  • Tax handling

  • Digital product sales

Perfect for solo SaaS founders.

5. Razorpay / PayHere (For Sri Lankan & South Asian Founders)

If you are targeting local markets:

  • Razorpay (India)

  • PayHere (Sri Lanka)

These gateways are better for regional payments and local currency.

How to Choose the Right Payment Gateway

Ask these questions:

  • Are you targeting global users? → Use Stripe or Paddle

  • Need the easiest setup? → Use PayPal

  • Solo founder SaaS? → Use Lemon Squeezy

  • Local South Asian market? → Use Razorpay or PayHere


how to choose payment gateway for saas startup

Payment Gateway Fees (Typical)

Gateway                                                                                          Typical Fee
Stripe                                                                                            ~2.9% + 30¢
PayPal                                                                                            ~3-4%
Paddle                                                                                            5% + 50¢
Lemon Squeezy                                                                                            5% + 50¢

Cheaper is not always better.

Focus on:

  • Reliability

  • Global support

  • Subscription features

Must-Have Features for SaaS Payments

Make sure your gateway supports:

  • Monthly billing

  • Annual plans

  • Coupons

  • Trials

  • Refunds

  • Invoices

  • Webhooks

Without these, running a SaaS becomes very hard.

Common Mistakes to Avoid

New SaaS founders often:

  • Choose local gateways too early

  • Ignore global payments

  • Use gateways without subscription tools

  • Pick the cheapest instead of best

This hurts growth later.

Best Gateway by SaaS Type

SaaS Type                                                                            Best Gateway
Global SaaS                                                                                    Stripe
Indie SaaS                                                                                    Lemon Squeezy
Enterprise SaaS                                                                                    Paddle
Simple tools                                                                                    PayPal
Local market                                                                                    PayHere / Razorpay

Final Thoughts & Advice

For most SaaS founders:

  • Stripe is the safest and most scalable option

If you want the easiest legal and tax handling:

  • Choose Paddle or Lemon Squeezy

The most important rule:

Make payments easy for users.

A smooth checkout = more revenue.

There are cheap tech stacks for your SaaS to start small too.

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