A merchant of record’s pricing page says something like 5% plus a small fixed fee. It reads like five percent. On a $99 plugin, it is closer to six or eight. On a $19 plugin sold during a holiday sale, it can be thirteen.
Nothing about that is hidden in the legal sense. Every number in this post comes from a public pricing page. It is hidden in the practical sense: the headline rate is the number you remember, and the rate you actually pay is assembled from a fixed fee, a set of surcharges and the price you happen to be charging that week. Audio plugins are small-ticket products that live through sale seasons, which is exactly the shape where that gap grows widest.
This post does the math: per sale, then over three years at three business sizes. It also does the math on the other side, because selling without a merchant of record has its own hidden tax, and pretending otherwise would make this a sales pitch.
Full disclosure, as always in this series: I build Keyzy, a licensing service that sits next to whatever payment setup you use, with or without a merchant of record. I have a position on keeping licensing separate from payments, and I made that argument in Should your licensing live with your payments?. This post is not that argument. It is only about what the payment side costs.
What the fee actually buys
A merchant of record (MoR) resells your product under its own name. Legally, the customer buys from the MoR, not from you. That one fact is what the fee pays for:
- Sales tax and VAT. On the sales it processes, the MoR registers, collects, files and remits wherever tax is due. You do not register in your buyers’ countries. Your own home-country obligations stay yours.
- Payment liability. Chargebacks, fraud and refunds run through the MoR’s merchant account rather than your own payment-processing account. Read the contract for what still reaches you: a per-dispute fee is common (Moonbase’s is €20), and a refunded sale usually costs you the fee it originally earned.
- Checkout and payment methods. Local currencies, PayPal, local card schemes, receipts and invoices.
- Buyer support for payment questions. “Why was I charged VAT?” goes to them.
That is real work. For a solo developer, tax registration alone can be the difference between shipping this month and spending a quarter on paperwork. Keep that in mind through every table below: the question is never “is the fee too high” in the abstract, it is “is the fee higher than doing that work yourself.”
Where the headline rate stops being the rate
Three things move the rate you pay away from the rate on the pricing page.
1. The fixed fee on a small ticket
A percentage scales with your price. A fixed fee does not. On a $99 plugin, a €1 fixed fee is about 1.2% of the sale. On a $19 plugin, it is about 6%, before the percentage has even started.
This is the same shape as PACE’s $2.50 minimum per license, which I covered in PACE vs hand-rolled vs SaaS: a floor that barely matters on an expensive product and dominates a cheap one. Most MoRs use a 50-cent fixed fee; some use €1. On audio plugin price points, that difference is not a rounding error.
2. The surcharges
The base rate is the rate for a standard transaction, and “standard” is defined by the vendor. As published on each vendor’s fee page in September 2026:
| Base fee | Surcharges | |
|---|---|---|
| Moonbase | 5% + €1 | +1% non-European cards, +1% USD pricing (+3% other currencies), +1.5% PayPal, +3% affiliate sales; €5 per payout; €20 per chargeback |
| Paddle | 5% + $0.50 | None listed; custom pricing for products under $10 |
| Lemon Squeezy | 5% + $0.50 | +1.5% buyers outside the US, +1.5% PayPal, +0.5% subscriptions, +5% abandoned-cart recoveries, +3% affiliate sales; 1% on payouts to non-US bank accounts |
| Stripe Managed Payments | 3.5% on top of Stripe’s card fees (2.9% + $0.30 US) | Stripe’s +1.5% international card fee still applies underneath, and +1% currency conversion if you charge in a currency you do not settle in |
| FastSpring | Not published; quote-based | Not published |
A few notes so the table is read fairly:
- Moonbase includes licensing in that fee (up to 10,000 license validations a month free, then €5 per 10,000). The others are payments only, so a licensing layer is a separate cost with them. The three-year projection below accounts for that.
- Lemon Squeezy is being folded into Stripe Managed Payments, which Lemon Squeezy’s team helped build. If you are choosing today, check which of the two you would actually be signing up for.
- The percentage is taken on the tax-inclusive total, at least at Moonbase, Lemon Squeezy and Paddle, whose fee pages all work their examples that way. Moonbase’s own example: a €100 product plus €19 VAT is a €119 total, and the fee is 5% of €119. Lemon Squeezy’s: $20 plus $4 VAT is a $24 total, and the fee is 5% of $24. The VAT is not your money, but it is part of the base your fee is calculated from.
None of these surcharges are unreasonable on their own. International cards cost more to process, currency conversion costs money, and affiliate programs need funding. The point is that your customer mix decides your rate, and for most plugin developers the mix is heavily international.
3. Sale season
Audio plugins sell in waves: launch intro prices, Black Friday, summer sales, bundle deals. A plugin listed at $99 spends a meaningful part of its year at $49 or $29.70.
The percentage part of the fee shrinks with the discount. The fixed part does not. So every discount raises your effective fee rate, and the deeper the discount, the higher the rate. The sale that moves the most units is also the one where the platform takes its largest share of each unit.
The per-sale math
Here is what each option takes from a single sale, as a percentage of the price. Assumptions: a US-based seller pricing in US dollars, a buyer paying by card, €1 = $1.1537 (ECB reference rate, 16 September 2026). PayPal, affiliate, abandoned-cart, payout and chargeback fees are left out, so every figure below is the standard card sale each vendor’s base rate is written for. The listed price is what the customer pays at checkout, and because the seller charges and settles in dollars, no currency conversion fee arises on the seller’s side. “Europe” below means the EU and the UK, where you would be registered for tax; everywhere else is outside those registrations. One wrinkle there: Moonbase’s surcharge is written for “non-European cards” without saying where the UK falls, so if it treats a UK card as non-European, your UK sales sit on the US Moonbase rate rather than the European one.
So you can rebuild any cell yourself, here is how the two ends of the range are assembled on a $49 sale to a US buyer:
- Moonbase, 9.4%: 5% base, plus 1% because the price is in US dollars, plus 1% because the card is not European, plus the €1 fixed fee, which is $1.15.
- Stripe direct, 3.5%: 2.9% plus $0.30, the US standard card rate. Stripe Tax costs 0.5% only on sales where you are registered to collect tax, which in this model means European buyers, so it appears in the European table and not the US one. Disputes, refunds and currency conversion are not in here either.
Column names are shortened to keep the tables readable on a phone: Lemon is Lemon Squeezy, Stripe MP is Stripe Managed Payments, Direct is Stripe direct with Stripe Tax, and lic. later on is the licensing service.
US buyer
| Price | Moonbase | Paddle | Lemon | Stripe MP | Direct |
|---|---|---|---|---|---|
| $99 | 8.2% | 5.5% | 5.5% | 6.7% | 3.2% |
| $49 | 9.4% | 6.0% | 6.0% | 7.0% | 3.5% |
| $29.70 (70% off $99) | 10.9% | 6.7% | 6.7% | 7.4% | 3.9% |
| $19 | 13.1% | 7.6% | 7.6% | 8.0% | 4.5% |
European buyer
| Price | Moonbase | Paddle | Lemon | Stripe MP | Direct |
|---|---|---|---|---|---|
| $99 | 7.2% | 5.5% | 7.0% | 8.2% | 5.2% |
| $49 | 8.4% | 6.0% | 7.5% | 8.5% | 5.5% |
| $29.70 (70% off $99) | 9.9% | 6.7% | 8.2% | 8.9% | 5.9% |
| $19 | 12.1% | 7.6% | 9.1% | 9.5% | 6.5% |
Both tables are percentages of the price the customer pays, with no tax added on top. If you price tax-inclusive, as most plugin shops do in Europe, the fee is calculated on a total that includes VAT you are only holding for a tax office. Take the $49 European row: the fee comes to 8.4% of $49, but at 20% VAT your own share of that sale is $40.83, so the fee is really 10.0% of what you earned. This applies to every column, Stripe included, since a card fee is charged on the amount charged. Relative comparisons hold; your real rate is simply higher than the table by roughly the VAT factor.
Two things stand out, and neither is “merchants of record are expensive.”
First, at these price points the spread between merchants of record is larger than the spread between a merchant of record and selling direct. On a $19 sale to a US buyer, the gap between the cheapest and the most expensive MoR in this table is 5.5 points. The gap between the cheapest MoR and selling direct is about 3. If you have already decided to use a MoR, which one matters more than most comparisons admit.
Second, the direct row is not free of hidden costs either. The 0.5% for Stripe Tax is the smallest part of it. The rest does not show up as a percentage at all.
The direct path has a hidden tax too
When you sell without a merchant of record, you are the seller, and the tax work the MoR was doing becomes yours:
- EU VAT. A downloadable plugin is an electronically supplied service in EU terms. If your business is outside the EU, there is no threshold on those: VAT on sales to EU consumers is due from the first sale. The EU’s non-Union One Stop Shop lets you register in one member state and file a single quarterly return for all of them. If your business is inside the EU, cross-border consumer sales up to €10,000 a year can stay under your home country’s rules; above that, the same One Stop Shop applies.
- UK VAT. A business outside the UK selling digital services to UK consumers has to register for UK VAT, with no threshold.
- US sales tax. Each state decides whether downloaded software is taxable and at what point an out-of-state seller has to register. You track your sales per state and register as you cross each state’s threshold.
- Chargebacks and fraud. They are yours. Stripe charges $15 per dispute, and the time spent responding costs more than the fee.
- An accountant who knows this. Tooling calculates and collects tax; someone still has to file, reconcile and answer the letter from a tax office.
None of this is exotic, and tooling like Stripe Tax handles the calculation and collection well. But the filings, the registrations and the professional help are a real annual cost, and unlike the MoR fee, it arrives as time and invoices rather than as a line on your payout report.
That cost is also mostly fixed. A quarterly OSS return takes roughly the same effort whether it covers $5,000 of European sales or $150,000. Keep that in mind for the next section.
Three years, three business sizes
Now the per-sale rates, applied to a year of sales. Assumptions, stated plainly so you can replace them with your own:
- Average value per transaction after discounts: $39. Not average product price. If your buyers commonly take two plugins or a bundle in one checkout, your transaction value is higher and every fixed fee hurts less.
- Buyer mix: 45% US, 35% Europe (the EU and the UK), 20% rest of world, all paying by card. Rest-of-world buyers are treated as neither US nor European, so they carry whichever surcharge each vendor applies to a foreign card: Moonbase’s non-European card fee, Lemon Squeezy’s non-US buyer fee, and Stripe’s international card fee under both Managed Payments and direct. They are outside the tax registrations in this model, so Stripe Tax does not apply to them.
- Revenue flat for three years, so the only thing that changes between columns is the fee.
- Separated stacks add a licensing service: $300, $600 and $1,200 a year for the three sizes, which is the shape of a licensing subscription at those volumes. Moonbase’s fee already includes licensing.
- Refunds, chargebacks, affiliate commissions, PayPal and payout fees are excluded throughout, on both sides.
Yearly payment and licensing cost
| Yearly revenue | Moonbase | Paddle + lic. | Lemon + lic. | Stripe MP + lic. | Direct + lic. |
|---|---|---|---|---|---|
| $30,000 | $2,882 | $2,185 | $2,432 | $2,698 | $1,701 |
| $150,000 | $14,412 | $10,023 | $11,261 | $12,591 | $7,604 |
| $400,000 | $38,433 | $26,328 | $29,628 | $33,177 | $19,877 |
The direct column does not yet include your tax compliance cost: the accountant, the filings, the hours. So the useful number is the difference between each MoR column and the direct column. That difference is your budget for doing tax yourself: if compliance costs you less than this, selling direct is cheaper; if it costs more, the MoR is earning its fee.
Three-year budget for doing tax yourself (MoR cost minus direct cost, over three years)
| Yearly revenue | vs Moonbase | vs Paddle | vs Lemon | vs Stripe MP |
|---|---|---|---|---|
| $30,000 | $3,543 | $1,452 | $2,193 | $2,991 |
| $150,000 | $20,424 | $7,257 | $10,971 | $14,961 |
| $400,000 | $55,668 | $19,353 | $29,253 | $39,900 |
Read the first row honestly. At $30,000 a year, the budget against the cheapest MoR is about $480 a year. That will not buy much accounting, and it certainly will not pay for the hours of learning how OSS returns work. At this size, a merchant of record is very likely the right call, and I would tell a friend so.
Now read the last row. At $400,000 a year, the gap is between roughly $6,500 and $18,500 a year. That is what you could spend on handling tax yourself, in fees, tools and your own hours, before direct selling became the more expensive option. It is not a quote from an accountant, and the MoR fee buys more than tax work: the chargeback liability and the checkout are in there too.
Still, the shape is the point. The fee is a percentage; most of the work behind it is not. A fourth country costs the MoR something; your ten thousandth sale in a country it already files in costs it very little. Compliance work does grow, but it grows with countries and complexity, not with your revenue, which is why the gap keeps widening long after the work behind it stopped.
So when does a merchant of record earn its cut?
A merchant of record is the right choice when most of these are true:
- Your yearly revenue is small enough that the budget in the table above would not cover professional tax help.
- You sell mostly to consumers across many countries and have no appetite for registrations and quarterly filings.
- You would rather never handle a chargeback.
- You are still finding out whether the product sells at all, and every hour belongs to the product.
Selling direct starts to win when these become true:
- Your revenue has grown to where the three-year budget comfortably pays for an accountant who knows digital VAT and US sales tax.
- A large part of your sales happen at discounted prices, where fixed fees and surcharges hit hardest.
- You sell to businesses, schools or studios that want invoices and purchase orders, which is a different tax picture from consumer sales.
- Your buyer mix is heavily outside the “standard” transaction your MoR’s base rate assumes.
And if you stay with a MoR, which is a perfectly good decision, run the per-sale table with your prices and your customer mix before choosing which one. The spread between them is wide enough to matter.
One cost that does not fit in a fee table
Every number above assumes you can move between these options when the math changes. Whether you actually can depends on whether your licensing lives inside your payment platform, which is its own question with its own costs. I wrote about it separately in Should your licensing live with your payments?
Do the math once a year
The headline rate on a pricing page is a starting point. The rate you pay is your prices, your discounts and your customers’ locations, run through someone else’s fee schedule. It changes as your business changes, which is why the right answer at $30,000 a year is rarely still the right answer at $300,000.
So put a date in the calendar. Once a year, take last year’s real sales, run them through the tables above and compare the result with a quote from an accountant. The fee is not hidden if you look at it.
This post is part of the Audio Plugin Business Reality series: how to actually build, ship and sustain an indie audio plugin business. Fees are as published on each vendor’s pricing page in September 2026; if a vendor changes its pricing, this post gets a dated update note. If you want a licensing layer that works the same with or without a merchant of record, that is what Keyzy does.