With this latest release, FastSpring has added the ability to accept and manage recurring subscriptions using Pix Automático. As the only MoR offering this solution, FastSpring is the best partner for technology, gaming, and digital product companies to effortlessly enable subscriptions in the Brazilian market. With FastSpring, it’s easier than ever to operate in Brazil with zero localized compliance headaches, giving you a massive advantage in one of the world’s fastest-growing digital economies.

Why Local Payment Options Matter

• Market Expansion: Instantly reach Pix’s 150M+ monthly active users. This extends your addressable market far beyond credit cards (limited to ~35% of the population) and removes the friction of manual Boleto Bancário payments.
  
• Predictable Revenue: Replace manual payment cycles with a native auto-debit infrastructure supported by a network of 400+ participating banks. You can now architect your Brazil pricing with the same recurring confidence as in North America or Europe.
  
• Reduced Involuntary Churn: Improve your bottom line by bypassing card network limitations and international transaction filters. Pix Automático effectively eliminates the high authorization decline rates common with credit card transactions in the LATAM region.
  
• Operational Efficiency: Tap into Brazil’s R$1 trillion subscription opportunity without the administrative burden of chasing manual renewals or managing complex, bank-by-bank direct debit agreements.
  
• Buyer Trust: Leverage the Pix ecosystem to offer a transparent checkout experience. Customers can manage mandates directly in their banking apps, fostering the long-term trust required for recurring digital sales.

Ready to learn more about how you can expand your business in Brazil with Pix Automático? Take a look at our release documentation or explore our list of global payment methods to see how we support the entire global market. Schedule a demo with one of our global payment specialists to learn about how FastSpring can help you successfully expand into Brazil and beyond.

The post Scaling Subscriptions in Brazil: Introducing Pix Automático appeared first on FastSpring.

In this episode of Growth Stage, we interview Sudipto Manna and Lauren Steyn of FastSpring about their thoughts on how to approach payments and ecommerce in emerging markets, and some of the requirements needed to get access to local payment methods and currencies.

If you’re wondering how you’re going to get the most bang for your buck when it’s time for you to expand into new emerging markets, don’t miss this episode of Growth Stage. Watch or listen now!

Podcast Full Interview: Audio

Podcast Full Interview: Video

The post EP44: Optimizing Ecommerce for Emerging Markets With Sudipto Manna and Lauren Steyn appeared first on FastSpring.

Your payments infrastructure is the foundation that determines whether you can scale globally, retain customers, and actually make money on each transaction. AI app builders face unique monetization challenges — from evolving regulations and taxes to the potential for more frequent chargebacks — that require more than a basic payment processor can solve for.

Below, we walk through:

• The SaaS fundamentals every AI app business needs to master.
• Monetization challenges unique to AI businesses.
• How to monetize a web app versus a mobile app.
• How FastSpring can help.

FastSpring allows you to offload the complexity of global payments, VAT/GST and sales tax compliance, consumer payments support, and many other aspects of payments management. Spend less time managing your payments and compliance and more time building groundbreaking AI products! Set up a demo or try it out for yourself.

Start With SaaS Fundamentals

At their most basic, the majority of AI apps are still fundamentally SaaS businesses. Whether it’s a monthly subscription to your writing assistant or an annual plan for your analytics platform, the majority of AI tools run on recurring revenue.

So while you may be selling AI services instead of project management software, the core monetization principles are similar to those of subscription businesses.

Before diving into AI-specific challenges, you should nail the basics — things such as:

• Communicating well with customers around subscription terms, payments, and any changes to your business or delivery model.
• Managing and mitigating churn.
• Choosing a payment provider.

But subscriptions come with complexity. You also need to handle free trial conversions, manage failed payments through dunning processes, and deal with upgrades, downgrades, and cancellations.

Companies that have navigated this model (such as FastSpring customer Stardock) know you need a payment partner built specifically for subscription management — not just one that can process one-time charges.

Things to Consider When Selling Software or Apps Globally

When you’re selling AI apps worldwide, you need to solve several problems simultaneously:

Preferred payments and checkout that vary by region. Localized payment methods are critical for conversion. Customers expect to see prices in their currency and be able to pay using familiar methods. Customers in the U.S., for example, expect to see Apple Pay and Google Pay, while customers in Brazil prefer to pay with Pix, and customers in India want to use UPI.

Global tax calculation and remittance. If you’re selling digital services to customers based in the EU, you need to collect VAT at each buyer’s local rate and file those taxes accordingly. In the U.S., sales tax requirements vary state by state, and some states even let individual counties or cities set their own rates and rules. Each requires separate filing. Handling this yourself means registering with tax authorities in, potentially, hundreds of jurisdictions. Plus, you’re liable for any fines or penalties resulting from doing so incorrectly.

Data and platform governance. You need to process payment data securely according to regional requirements, meet data residency rules in certain jurisdictions, and maintain PCI compliance. These aren’t optional — they’re legal requirements that can shut you down or cost you hefty penalties if not followed.

Why You Want a Merchant of Record (Not Just a Payment Processor)

When choosing how to handle payments, your first and crucial choice is whether to use a basic payment service provider (PSP) or partner with a merchant of record (MoR).

A payment service provider (such as Stripe) gives you the tools to process transactions, but you remain legally responsible for every transaction. You’re in charge of calculating, collecting, and remitting taxes — in every jurisdiction where your customers live — and you carry the liability for any fraud. (Stripe is launching an MoR service, but how it will perform is still unknown.)

A merchant of record, on the other hand, becomes the legal seller of your product. FastSpring is an MoR, so we assume liability for transactions — meaning you can spend less time worrying about managing taxes and chargebacks and more time building a great product.

As the liable party for the sale, an MoR such as FastSpring handles:

• Global tax compliance. You don’t need to figure out VAT rates across EU countries, navigate state-by-state sales tax rules in the U.S. (and in some cases even city-by-city variations), or file returns in those jurisdictions. An MoR automatically calculates, collects, and remits those taxes for you.
• Consumer support for payment issues. When someone’s card declines or they have a billing question, your MoR’s support team handles it.
• Fraud prevention and risk management. Using a simple payment service provider and acting as your own merchant of record could lead to less financial industry credibility, as AI services are often perceived as riskier than other tech verticals — and in turn, that could lead to lower approval rates. Conversely, the established credibility of an experienced merchant of record such as FastSpring (with over two decades of experience!) helps improve transaction approval rates, which means higher revenue and less headaches.
• Checkout and payment localization. Instantly offer global payment localization including currency conversion, checkout translation, global tax management, and localized payment processing.
• Global compliance. Your MoR maintains PCI-DSS certification, data protection regulations, and customer authentication requirements so you don’t have to. Learn more in FastSpring’s Trust Center.

FastSpring allows you to offload the complexity of global payments, VAT/GST and sales tax compliance, consumer payments support, and many other aspects of payments management. Spend less time managing your payments and compliance and more time building groundbreaking AI products! Set up a demo or try it out for yourself.

Questions to Ask When Evaluating Payment Solutions

Before committing to a payment solution — be it a payment processor or merchant of record — ask these questions to help you evaluate:

• Does it handle global tax collection and remittance automatically, or do you need to register, collect, and file in every jurisdiction where your customers live?
• Which payment methods are supported? Can customers in your target market(s) use their preferred options?
• How does it handle subscription management? What about usage-based or metered billing? Does it offer a portal for customers to self-manage subscriptions, billing, and payment methods on file?
• Does providing consumer payment support fall to you or to your payment provider?
• Does it integrate with your existing tech stack?
• What are your actual, all-in costs — including processing fees, tax filing, compliance management, and operational overhead? 

What Makes AI Different: Unique Monetization Challenges

Once you’ve nailed the fundamentals for subscription-based businesses, you can begin to grapple with the unique challenges of monetizing an AI app.

Operating in a Young, High-Growth Market = Constant Change

AI companies are scaling globally faster than almost any previous software category. You’re not gradually expanding into new markets over several years — you’re able to serve customers worldwide pretty much from day one.

This creates challenges that more mature software categories simply didn’t face when they were at the same stage. Burgeoning AI companies are now faced with:

• Regulatory landscapes that vary dramatically by region, especially as they apply to digital services businesses. Evolving tax regulations (especially on digital goods or services) create compliance requirements that change based on where your customers are located — and these regulations will continue to emerge, grow, and evolve across the globe. For example, in 2024, five U.S. states simplified their criteria for tax nexus, which meant more businesses might meet the criteria for nexus sooner than they expected to — including digital goods businesses. And in 2025, the Philippines extended its VAT legislation to cover digital services supplied by foreign companies to consumers in the Philippines. If you use an MoR such as FastSpring, the MoR will worry about staying up to date with those types of regulations so you don’t have to.
• Evolving customer expectations and pricing norms. Unlike established software categories where pricing patterns are well understood, AI pricing is more fluid. Customers aren’t yet sure what they should pay, and you may not be sure what you should charge. To quickly and easily pivot your pricing as needed, choose a payment partner with agile pricing tools. For instance, FastSpring’s flexible Store Builder Library makes it easy for software and app sellers to update their product pricing quickly.
• Overly cautious payment processors. As we mentioned above, because the category is new and patterns aren’t established, some payment processors may be more likely to treat AI as high-risk. But since FastSpring processes billions of dollars across numerous software categories and has been for 20+ years, partnering with us means that you’ll benefit from better approval rates. Banks see transactions coming from a known, trusted entity with a proven track record, not an unproven AI startup.
• Technical challenges with usage-based billing. Unlike SaaS products that have been more commonly monetized with traditional monthly or annual subscriptions, AI services are particularly well served by usage-based billing, so support for that feature is something you’ll likely want from a monetization partner. If you want to be able to charge users in combination with real-time metering and tracking of usage, your backend needs to integrate with your payment systems. FastSpring supports usage-based billing through API integration and webhooks.

Monetizing AI Web Apps vs. AI Mobile Apps

Your monetization strategy will differ depending on whether you’re building a web app, a mobile app, or both.

AI Web Apps: The Direct Approach

Web-based AI apps have built-in advantages for monetization:

• No mandatory iOS and Android platform fees.
• Full control over the customer relationship.
• Direct access to first-party customer data.

To make web monetization work, you need:

• An optimized checkout experience with multiple payment methods, localized currencies, and trust signals that convince customers you’re legitimate and secure.
• A subscription management portal where customers can self-serve to upgrade, downgrade, view usage, update payment methods, and access their billing history.
• Integration flexibility through APIs for usage-based billing, webhooks for entitlements, and backend system connections that tie everything together.

FastSpring’s JavaScript Store Builder Library lets you quickly create a branded, seamless checkout experience that feels native to your app environment, while handling all the back-end complexity for you.

AI Mobile Apps: The App2Web Opportunity

If you’re building a mobile AI app, you’re facing 15-30% platform fees that eat into your margins. For AI apps with high compute costs, losing nearly a third of revenue to platform fees can strain the calculus at best  —  or make the economics totally unworkable at worst.

But that’s the cost of doing business with iOS and Android, right?

Not necessarily.

With app2web and web2app monetization strategies, you can sell an AI app outside popular app stores. You can recover some of that lost revenue by building a web store to monetize via the web and offering customers some kind of incentive — discounts, upgrades, in-app usage bonuses, etc. — for buying directly from you.

By doing so, you:

• Minimize the transactions on which you incur those hefty commission fees.
• Gain access to valuable first-party customer data that enables smarter acquisition campaigns, personalized promotions, and better lifecycle marketing.
• Improve margins, which is crucial when you’re paying for compute on every transaction.

While regulations around in-app steering and promotion of outside payment options vary from region to region and are ever evolving, you can always:

• Distribute your product through a web store. Selling your app’s solution directly to your consumers through your own store is an increasingly common and effective monetization strategy.
• Market your web store outside the app through social media, Discord communities, Reddit threads, email campaigns, and other channels where you aren’t restricted by app store rules.
• Build a web presence for existing users, and incentivize web store visits through exclusive offers or better pricing.

Making User Acquisition Smarter With First-Party Data

When you monetize through the web, you unlock first-party data that holds the power to supercharge your user acquisition strategy.

You can track attribution accurately, understanding which campaigns drive conversions.

You gain access to email addresses, payment preferences, referral sources, and session behavior — data points that enable sophisticated segmentation.

Then you can turn that valuable data into:

• Localized user acquisition strategies with geographic and behavioral segmentation, region-specific pricing and promotions, and language/payment method optimization.
• Targeted social campaigns where you build custom audiences from web purchasers, create lookalike audiences based on high-intent users, and retarget with actual conversion data instead of guesswork.
• Email marketing automation that drives users to web purchases, re-engages lapsed customers, and converts free users to paid plans.

Monetize Your AI App With FastSpring

FastSpring is built specifically for digital-first businesses that need to monetize globally, without getting bogged down building their own global payments infrastructures — or cobbling them together via disparate payment tools.

Our platform offers:

• Complete merchant of record services covering global tax compliance across 200+ jurisdictions, local payment methods and currencies, fraud prevention and risk management, and PCI compliance and data security.
• AI-friendly billing capabilities including out-of-the-box subscription management, flexible product catalog management, multiple pricing models (flat, tiered, hybrid), and support for usage-based billing (with proper integration).
• Developer-first integration through RESTful APIs for backend connections, webhooks for real-time event notifications, our JavaScript Store Builder Library, integration with RevenueCat for mobile apps, and backend integration for usage-based billing.
• Customizable checkout experiences with branded checkout; your choice of embedded, pop-up, or web storefront experiences support for trials, coupons, and promotions; and management of multiple subscription tiers.
• Fast implementation with quick setup for standard configurations, flexibility for complex requirements, pre-existing  compliance infrastructure, and the ability to focus your engineering resources on AI instead of payments.

FastSpring helps AI app developers navigate the complexity of global monetization and scale successfully. We’ve spent over 20 years helping digital-first companies grow, and we’ve built our platform specifically for businesses like yours.

FastSpring allows you to offload the complexity of global payments, VAT/GST and sales tax compliance, consumer payments support, and many other aspects of payments management. Spend less time managing your payments and compliance and more time building groundbreaking AI products! Set up a demo or try it out for yourself.

The post AI Monetization: How AI App Builders Can Handle Pricing, Global Expansion, and Compliance appeared first on FastSpring.

However, many founders quickly discover that the biggest hurdle to global growth isn’t product-market fit — it’s the structural drag of an entirely different set of Western administrative and regulatory requirements.

Companies are often caught off guard by the technical requirements and administrative realities. Moving into the West is not just about switching currencies; it’s a fundamental shift in how you manage your customer lifecycle and your business’s legal footprint.

Every new market demands its own web of legal entities, localized contracts, domestic banking, and tax registrations. That means that a lean, engineering-led startup can quickly become bogged down in legal and finance operations.

Based on FastSpring’s own internal data and our experience helping thousands of sellers scale, here are six proven strategies to navigate the high-stakes transition from APAC into Western markets.

FastSpring is how companies in APAC enter the western market online and in more places around the world. We handle every payment need — from subscription management to tax collection, remittance, and more — so your business can go farther, faster. We’re also the leading merchant of record for global software companies, powering over a billion dollars in worldwide transactions every year. We’ll manage your checkout, VAT and sales taxes, compliance, and more, freeing you to focus on what you do best: building great software. Set up a demo or try it out for yourself.

1. Leverage the Merchant of Record (MoR) Model

Selecting the right financial architecture is the most critical decision an APAC seller can make when selling beyond their home region. For many, the merchant of record (MoR) model provides a shortcut through the bureaucratic hurdles that typically accompany international growth. The MoR serves as the legal entity responsible for every transaction, allowing your team to focus on the product experience while the MoR handles the heavy lifting of global commerce.

• Immediate Market Entry: An MoR eliminates the need for APAC companies to establish local legal entities in the U.S. or Europe, enabling global expansion in days rather than months. Entity setup is not just a one-time cost — it creates ongoing legal, financial, and operational overhead.
• Compliance Outsourcing: The MoR handles the calculation, collection, and remittance of sales taxes and VAT, and it assumes the risk for fraud and chargebacks. And while taxes are very important, this is also critical  for companies using traditional PSPs, because it is just one part of a much bigger operational burden.

2. Meet Digital Goods Regulations in Europe

Europe has moved aggressively to standardize the digital economy, introducing frameworks that require absolute precision in data handling and tax reporting. Navigating these rules requires a proactive approach to ensure your checkout process remains both compliant and conversion-friendly. 

The following recent and ongoing mandates represent a hard line for international sellers, where universal requirements have replaced previous exemptions for smaller companies. 

• VAT in the Digital Age (ViDA): As of Jan. 1, 2025, previous VAT registration thresholds have been eliminated. Every B2C digital sale, no matter how small, is now a taxable event that must be reported through the One Stop Shop (OSS) system.
• The EU Data Act: Starting in September 2025, European customers have a “cancel anytime” right for cloud services, allowing them to terminate contracts with two months’ notice regardless of legacy terms. Providers must also ensure data portability, and by early 2027, all “switching fees” will be prohibited.
• Privacy as a Trust Factor: Beyond legal mandates such as GDPR, 2026 marks a shift toward “Privacy by Design.” Western buyers increasingly treat data transparency as a competitive requirement, so showing clear, auditable trails for data residency and automated decision-making is no longer just a legal hurdle but a primary driver of customer trust.

3. Navigate US Tax and Subscription Enforcement

The United States market is currently defined by complex state and federal regulations. Success in the U.S. requires a keen eye on shifting state legislation and a commitment to clear, accessible user terms that protect your business from regulatory scrutiny. 

Balancing these local tax obligations with federal consumer protection rules is essential for any APAC brand looking to establish a long-term presence.

• The Nexus Maze: Many U.S. states now impose sales tax on digital downloads and SaaS. For example, starting July 1, 2025, Maryland enacted a 3% sales tax specifically on technology services.
• Subscription Transparency: The FTC continues to aggressively enforce subscription transparency under the Restore Online Shoppers’ Confidence Act (ROSCA). Companies must offer simple, accessible cancellation options and clear disclosures about auto-renewal terms or risk significant penalties.
• Data Minimization: In line with the FTC’s focus on consumer protection, Western brands are shifting toward “data minimization”: the practice of only collecting what is strictly necessary. For APAC companies accustomed to data-rich “super-app” models, adopting a lean data approach is essential to avoid the multi-million-dollar settlements that are common under U.S. state privacy laws such as California’s CCPA.

4. Bridge the Gap Between Design and UX

APAC and Western customers often operate on different visual logic. While many high-growth Asian interfaces thrive on information density (such as surfacing multiple options, promotions, and data points all at once to show value), Western users typically favor minimalism and progressive disclosure. In the U.S. and EU, consumers don’t view a cluttered UI as feature-rich; instead, they perceive it as overwhelming and even spammy.

Here are a few tips on how to design for these audiences as you expand your business:

• Design for Focus, Not Completeness: Western SaaS buyers prioritize speed and ease. They expect a clean, minimalist layout with a single, clear call-to-action (CTA). In Western markets, whitespace is a functional tool for guiding the eye; removing it can lead to higher bounce rates.
• The Trust of Transparency: While APAC buyers often build trust through multi-sensory engagement, Western buyers build trust through visual clarity. This includes clear typography, a subdued color palette (moving away from high-energy reds and golds), and a direct, step-by-step onboarding flow that reveals features only as needed.
• Actionable Adjustment: Audit your marketing site and product dashboard for visual noise. Shift from a high-density, all-in-one layout to a streamlined experience that highlights one specific outcome at a time. This reduces the mental effort required for a Western buyer to say “yes” to your product.

5. Optimize Payment Performance and Risk

Cross-border payment performance is a silent variable that can either accelerate your growth or quietly drain your revenue through high decline rates. Friction at the point of purchase is often the result of poorly localized payment methods, or of inadequate fraud management that flags legitimate international buyers. 

For APAC companies, the most significant hurdle is often infrastructure: transitioning from a region where digital wallets and real-time payments are the primary engine of commerce to Western markets that remain deeply rooted in one-click payment systems.

• Local Optimization: Adding local payment methods (such as iDEAL in the Netherlands) can increase checkout conversion rates by up to 30%. Successful brands use dynamic checkouts that automatically detect a user’s location to display relevant currencies and billing frequencies.
• Managing Risk: Fraud and risk are harder to manage internationally. For example, while India’s UPI transactions are generally irreversible, Western credit cards offer robust consumer protections that make disputes easy. Utilizing an MoR can help mitigate this by assuming the legal and financial risk for fraud and chargebacks, protecting your bottom line from the volatility of international payment disputes.

6. Implement Advanced Pricing Strategies

Simply converting your home-market pricing into USD or EUR is rarely a winning strategy. To truly capture the market, APAC brands must adopt sophisticated pricing models that reflect the actual purchasing power and billing expectations of Western customers. These adjustments aren’t just cosmetic — they’re data-backed methods for increasing the lifetime value of every user you acquire.

• Purchasing Power Parity (PPP): Universal pricing often fails. SaaS companies that implement PPP-adjusted pricing — reflecting local economic conditions — see up to 18% higher growth rates and 25% higher revenue per customer.
• Annual vs. Monthly Billing: While monthly retention in Asia often hovers around 75% compared to 85%+ in the West, annual subscription retention is nearly identical globally. Understanding how customers like to buy (e.g., promoting annual plans) can help stabilize revenue and offset higher Western acquisition costs.

Scale Efficiently With FastSpring

Global expansion can get expensive quickly when each new market adds more internal complexity. FastSpring handles the global checkout, tax management, and regulatory compliance so you can focus on building your SaaS or software business rather than managing administrative overhead.

Ready to scale your SaaS beyond borders? Schedule a demo today.

The post 6 Proven Strategies for APAC Companies to Successfully Enter Western Markets appeared first on FastSpring.

• Xsolla is a merchant of record (MoR) that serves video game companies.
• FastSpring is an alternative MoR with deep video game and mobile game experience and key features such as global payments, gaming-specific fraud prevention, and gamer support.
• Other Xsolla competitors include Stripe, Coda Payments, Appcharge, Tebex, Aghanim, and Paddle.

Xsolla is a leading merchant of record (MoR) payment provider that serves the video game industry. The platform includes a broad feature set that provides video and mobile gaming companies with the infrastructure needed to sell online and accept payments globally.

You can read more about Xsolla’s features and benefits on their website, but if you’re considering additional choices for the best payment provider for you, we hope you find this article helpful.

In this guide, we share seven Xsolla competitors, starting with an in-depth look at our solution, FastSpring. 

Are you shopping for competitors of Xsolla that can help you expand your video game monetization strategy? FastSpring is an experienced merchant of record that provides an all-in-one payment platform for video games, mobile apps, and other digital-first businesses, including VAT and sales tax management, payment localization, and player payments support. Learn more about FastSpring for video games at fastspring.gg.

7 Xsolla Alternatives

• FastSpring
• Paddle
• Aghanim
• Tebex
• Appcharge
• Coda Payments
• Stripe

FastSpring

FastSpring is an MoR and D2C payment system for video games and in-game purchases that’s  similar to Xsolla.

Our solution enables game publishers to collect direct-to-consumer (D2C) payments for your video games and in-game purchases, embed payments in your game or on your web store,  and enjoy many of the benefits of selling on a game marketplace for a fraction of the cost.

Video game publishers who work with FastSpring can instantly accept localized D2C payments from across the globe, with gaming-specific fraud protection and support for the top payment methods across jurisdictions and in 20+ languages.

Our solution not only gives you global reach on payments, but also includes key features to streamline and automate VAT and other sales tax compliance for you, including calculating, collecting, and remitting taxes. 

Beyond global payment processing, FastSpring also helps you create a seamless checkout flow with customizable, localized checkout experiences in game and on your website, ensuring player experience is consistent and easy across multiple touchpoints.

Why You Should Monetize Your Video Game With FastSpring

The biggest advantage to working with FastSpring is our experience. To compare, we’ve been an MoR for more than two decades, and we have a long history of working with video game companies. We’re also committed to working in partnership with game developers to help you grow.

For example, we worked hand-in-hand with Out of the Park Developments to localize checkout for their benchmark game in South Korea — a change that helped them grow sales in the region by 4x.

“We have been delighted with everything about FastSpring — from the robust platform to the helpful customer service that supports our company growth goals.”

– Richard Grisham, CMO + COO,
Out of the Park Developments (makers of OOTP Baseball)

Learn even more about how Out of the Park Development succeeded with FastSpring’s help in their case study.

More Than 20 Years’ Experience

FastSpring is trusted by video game companies from around the world, from smaller publishers like DITOGAMES to major brands like Rovio.

FastSpring was founded in 2005 to enable D2C payments for downloadable software, PC games, premium mods, and other digital products.

Today, our platform delivers:

• Extensive payments infrastructure with the most popular local payment options around the world.
• A highly-optimized video game risk model.
• Easily embeddable components for your web store.
• Specialized data signals to help your whales transact seamlessly.
• Developer-first APIs/webhooks to support your live service systems and in-game entitlements. 

Our extensive video game experience and capabilities combined help make FastSpring an MoR that gets gaming.

High Approval Rates and Advanced Gaming-Specific Fraud Protection

FastSpring’s platform boasts higher-than-average approval rates for payment providers, likely higher than you can achieve on your own.

This is thanks to the trust FastSpring has established with global payment processors and smart payment routing that routes FastSpring’s transactions between multiple payment processors based on the best approval rates, types of transactions, and jurisdictions in which transactions are processed.

FastSpring’s multi-homed payment processing approach helps you achieve better processor uptime and approval rates globally than using a single payment processor such as Stripe alone.

Our advanced, gaming-specific fraud prevention and risk engine is built specifically for video games and the types of transaction fraud that game developers are likely to encounter.

Any patterns in risky behavior, for example, are learned and applied across all our video game customers, and specific fraud rules can be applied just for your games. So if a nefarious transaction or buyer gets flagged by one customer, the flag applies to every video game customer of FastSpring, helping to proactively prevent chargebacks and loss of revenue.

Additionally, we give you the ability to dynamically flag players as safe (e.g., whales) or not trusted (e.g., new players), which we can use to optimize our fraud rules specifically for you, making them more or less strict as needed.

Our fraud model accommodates revenue spikes in line with key offers and events, and we’ll work with you to ensure it’s prepared to anticipate the behavior you expect.

If you expect players to purchase many times in quick succession because of a unique sale, for example, we’ll work with you ahead of time to ensure that we understand your player segments and make sure your VIP players have uninterrupted purchase flows through player whitelisting and targeted fraud rules.

Our multi-homed processor workflow combined with advanced video game-specific fraud protection helps make your player experience great and helps you deliver a great big GAME OVER to your payment cheaters.

Amazing Support — for You and Your Players

If you need assistance, our award-winning customer support team is always happy to provide hands-on help — whether that’s for setting up initial integrations, ongoing maintenance, extra support for your whales, or localizing your checkout for a new region — and we’re always working to improve the customer experience.

Our AI-assisted documentation, for example, makes it easier than ever to get the help you need when you need it, or you can work with a real human at any time to help you troubleshoot and find a resolution to more complex questions.

Additionally, FastSpring provides friendly and direct support for your players who have payment issues related to their purchase experience. This means your team doesn’t have to provide that support, saving you time and helping your players get the right help faster.

A Global Presence You Can Trust

Originally founded in Santa Barbara, California, FastSpring has continued to expand globally, including two offices in the U.S. and additional offices in Canada, the EU, the UK, the Netherlands, and Singapore.

Our global presence means we’re always here when you need us, and our knowledge of — and strict adherence to — compliance regulations and sanctions means you can rest easy knowing that such a critical part of your business is in safe hands.

FastSpring is a profitable company with plenty of proceeds available to support our business, and we’re backed by top-performing and highly reputable investment firm Accel-KKR. FastSpring has the resources to help you scale and the excellent corporate, privacy, and security governance to give you peace of mind.

Visit our Trust Center for more information about privacy, security, and more. 

Are you shopping for competitors of Xsolla that can help you expand your video game monetization strategy? FastSpring is an experienced merchant of record that provides an all-in-one payment platform for video games, mobile apps, and other digital-first businesses, including VAT and sales tax management, payment localization, and player payments support. Learn more about FastSpring for video games.

Paddle

Paddle is an MoR and subscription billing platform. It offers similar features to the other apps on this list, including:

• Global payments.
• Multiple payment gateways.
• Secure checkout.
• Fraud protection.

With that said, Paddle is primarily built for SaaS and other subscription businesses — the feature-set leans more toward subscription-based billing. So, while an MoR, Paddle may not be as well-optimized for video games or D2C monetization of mobile apps and games.

Learn more about Paddle alternatives.

Aghanim

Launched in 2024, Aghanim is the newest of newcomers in this space, but the founders aren’t — the whole founding team came from Xsolla. Unlike many of the other alternatives on this list, Aghanim is hyper-focused on D2C monetization for mobile games exclusively.

Aghanim offers similar features to Xsolla and its alternatives:

• Conversion-optimized checkout.
• Fraud protection.
• Merchant of record services.

But the platform also includes a feature-set specific to mobile game developers, including:

• A customizable, no-code web builder.
• Automated marketing and player segmentation.
• A player journey, outreach, and events builder for liveops.

Tebex

Tebex is a merchant of record that was originally built specifically to monetize game servers, later expanding to also monetize in-game creator content. The company has been around since 2011 and was acquired by Overwolf in 2022, at which time it appears Overwolf pivoted Tebex to become a more traditional merchant of record for games. 

The platform currently offers many of the same features as Xsolla, including:

• Global payments.
• In-game shop and webstore sales.
• Checkout.
• Sales tax and compliance.
• Chargebacks and fraud prevention.

Tebex also has risk mitigation and fraud prevention, offering an insurance policy against any chargeback-related losses.

Appcharge

Appcharge is a merchant of record that has features similar to those of other merchants of record like Xsolla or FastSpring.

The relatively young Appcharge was launched in 2022. As a gaming-focused merchant of record, this is one to keep an eye on; it may be worth a try if you’d like the influence of being one of their earlier customers, and if you’re okay with some possible growing pains as Appcharge ramps up as a payment provider.

Coda Payments

Coda Payments is a Singapore-headquartered competitor to Xsolla that enables video game companies to accept payments globally. Depending on the package customers choose, Coda Payments may or may not act as the MoR.

The company’s Codapay product competes most directly with Xsolla, offering payment experiences embedded in a publisher’s web storefront or in-game experience, or the use of Coda’s web store.

Stripe

Stripe is a well-known DIY payment processor (sometimes referred to as a payment gateway, though they’re not the same) that enables businesses to accept credit cards, debit cards, and mobile payments.

The most important thing to note here is that Stripe’s base product is not an MoR.

Stripe’s base pricing tends to be lower than the managed services a merchant of record provides — because those prices don’t include any of the tax compliance vendors, fraud management, and development time needed for you to build and manage integrations with Stripe and stay compliant internationally.

There are now three options when choosing Stripe: 

• Source and pay for all of the separate vendors you’ll need for payments, compliance, taxes, and more — and dedicate some of your own valuable time to managing them.
• Navigate Stripe’s many complicated packages and add-ons to piece together a workable solution for global commerce.
• Try Stripe’s untested Managed Payments MoR product, something they’ve been building after purchasing Lemon Squeezy in 2024 but which is just launching in early 2026.

The most common mistake is comparing Stripe’s base pricing — at face value — against any alternatives that include merchant of record services. In addition to the management time and complexity this adds, Stripe often has a higher total cost of ownership than a merchant of record like Xsolla or FastSpring.

That’s not even to mention the time wasted while your game development-centric engineering organization is distracted with back office financial systems and compliance — time they could be using to make your games better.

As we mentioned above, Stripe purchased Lemon Squeezy in 2024 and has built an MoR product that is just now being released, but as it is new, little is known about how it performs or whether early adopters will be satisfied with the offering.

Frequently Asked Questions About Xsolla Alternatives

Learn more about FastSpring for video games.

The Choice to Power Your D2C Game Is Yours

We’d love the chance for FastSpring to earn your business, but we know the choice is yours. As you continue your research for Xsolla alternatives, we hope you find these suggestions helpful, and we wish you all the best in making the right choice for you.

If you’d like more information about FastSpring, you can schedule a demo with one of our video game monetization specialists to explore pricing, answer questions, and get more details on the many great benefits of FastSpring.

Are you shopping for competitors of Xsolla that can help you expand your video game monetization strategy? FastSpring is an experienced merchant of record that provides an all-in-one payment platform for video games, mobile apps, and other digital-first businesses, including VAT and sales tax management, payment localization, and player payments support. Learn more about FastSpring for video games.

Related Reading

• Wondering how to monetize a web store? Learn more about Using a Gaming Payment Gateway to Monetize Your Game’s Web Shop and how merchant of record FastSpring makes monetization easy.
• Trying to market to more gamers? Check out highlights and listen to our Growth Stage podcast episode, Marketing Your Video Game Outside of Game Marketplaces & App Stores.
• Get a gaming industry news roundup and learn more about the direct-to-consumer situation around the world in our post on How a Lack of Direct-to-Consumer Options Hurts Players.
• As the landscape around video games ecommerce solutions is ever changing, Epic Games has played an active role in driving some of those changes. Hear from FastSpring’s CEO in Is What Epic Wants for App Stores What Other Game Developers Actually Want?
• Easily keep an eye on revenue and cash flow metrics, customer churn and LTV, trends across regions and products, and other important ecommerce data points with FastSpring’s Revenue Overview and Subscription Overview Dashboards. 
• Learn more about merchant of record functionality plus other payment solutions and commerce platforms in Top 10 International Payment Gateways: An In-Depth Guide.
• Considering a subscription monetization model? Learn about recurring billing and subscription management platforms in Billing and Subscription Management: A Detailed Comparison of 5 Options.

The post 7 Best Xsolla Competitors in 2026 appeared first on FastSpring.

Yet, there is conversation in the market that enterprise SaaS growth is beginning to slow. Finding new ways to grow can be especially hard for large companies that already have many subscribers, or which are chasing growth through new subscription services in addition to their usual offerings. 

The big question remains: How do you overcome the complex financial and technical hurdles of doing business globally? 

Spoiler alert: Global enterprise growth has an “easy button” with a merchant of record. Let’s take a look at how this powerful payment platform model solves enterprise-grade headaches.

FastSpring is how Enterprise game companies sell online in more places around the world. We handle every payment need — from subscription management to tax collection, remittance, and more — so your business can go farther, faster. We’re also the leading merchant of record for global software companies, powering over a billion dollars in worldwide transactions every year. We’ll manage your checkout, VAT and sales taxes, compliance, and more, freeing you to focus on what you do best: building great software. Set up a demo or try it out for yourself.

Enterprise Global Expansion = High Stakes, Higher Friction

Enterprise leaders currently face three primary challenges that prevent them from capturing international market share:

1. High Investment and High Risk in Emerging Markets: You know the opportunity is massive, but the investment required to build local entities, hire tax experts, and establish banking relationships is astronomically high. While North America remains the largest market, Asia-Pacific is now the fastest-growing region globally, with a 24.6% CAGR in virtual fitness as an example. Effectively capturing new users in this space requires native options for buyers or local entities, but the risk of getting it wrong in a regulated market often stalls expansion plans before they begin.
2. The Architecture Gap: You need an enterprise-grade payment architecture that is resilient, localized, and compliant. However, correctly building all of that takes significant time, money, and specialized experience. Most organizations try to solve this with a domestic-only infrastructure, resulting in the “entity gap”: a state in which your regional web traffic is ready to buy, but sales can’t proceed because you don’t support local payment methods or don’t have local entities, leading to high cross-border decline rates.
3. The Need for Flexibility: You want the ability to adjust your rollout based on real-time data without incurring unexpected costs or risk. Traditionally, capturing 100% of market potential in regions such as India, Brazil, or Indonesia has required permanent local subsidiaries, which take years to establish. But you need the flexibility to test markets without being locked into analog-era banking setups that make it difficult to pivot.

These challenges can make it exceedingly complex or slow to expand into new global markets, even for well-established enterprise SaaS companies.

So What Is a Merchant of Record (MoR)?

Simply put, a merchant of record is a service provider that acts as your software’s reseller. While you maintain the brand experience and customer relationship, the MoR assumes the majority of the liability for the transaction.

The MoR model allows a company to “go live tomorrow.” Because the MoR already holds local entities and tax registrations across 200+ regions, you can leverage its infrastructure as your own. This is the strategic solution to the entity gap. For global enterprises, the barrier to international revenue is rarely a lack of demand — it’s the infrastructure.

Why Do Traditional Payment Providers Fail at Scale?

Most enterprises start with a standard payment service provider (PSP) such as Stripe, PayPal, or Square. However, as you expand into multiple regions (some with complex tax rules and regulations), the limitations of a PSP create a revenue ceiling:

• Missed Opportunities: It’s common for global leaders to see significant web traffic from regions like India or Mexico, only to find they can’t process a single transaction because they lack a local legal entity. One FastSpring customer was losing 20% of web traffic in India before implementing an MoR that accepted local payment methods, which are otherwise inaccessible without a local entity.
• Unnecessary Discounts: When internal infrastructure can’t support global growth, teams look for scrappy, alternative growth tactics that provide a quick revenue boost but which don’t maintain profit margins over the long term. A merchant of record provides a sustainable alternative to this by making it easy to unlock untapped revenue in new territories rather than slashing prices in existing markets.
• Administrative Burden: When your expansion plans reach your tax and legal departments, they’re often vetoed due to the complexity of managing local taxes and varying economic nexus laws (nexus is the defined threshold for tax liability on sales). 
• Tax Law Fragmentation: Beyond tax calculation, enterprises struggle with data fragmentation. A fragmented payment setup creates a reconciliation nightmare, where transaction data lives in silos. A robust MoR provides a single source of truth, ensuring that every transaction — regardless of currency or country — carries a consistent data schema that meets global KYC (Know Your Customer) and AML (Anti-Money Laundering) standards.

How to Scale With Speed and Flexibility

Every large company fears the need to “rip and replace” an existing infrastructure, even if that means sticking with a solution that’s not meeting their needs. Modern MoR solutions such as FastSpring address this through something called “headless deployment.” Let’s look at an example.

Avid, a leader in creative software, needed a global online payments solution that would leverage its recent investment in a new composable commerce stack. By implementing FastSpring as its MoR, they didn’t have to abandon their existing proprietary subscription engines or dunning logic. Instead:

• Avid managed the customer experience, subscriptions, and dunning.
• They layered FastSpring on top to manage the back-end: global payments, tax collection, and compliance.
• They went live in just three weeks and saw 4% of transactions come in through newly added payment options such as Apple Pay and Google Pay, which supports long-term retention through buyer-friendly payment methods. 

This headless approach is critical for organizations using middleware platforms for orchestration and entitlements. Instead of a brittle, hard-coded integration, an enterprise-grade MoR uses webhooks and robust APIs to push real-time transaction data into your data lake or BI tools (like Snowflake or Tableau). This enables real-time revenue recognition, a necessity for both public companies and those preparing for an exit.

That’s how you scale without friction.

Even Your Back-Office Team Will Rejoice

Internal tax and finance teams are often the strongest skeptics regarding global expansion. An MoR turns these skeptics into advocates by providing:

• Liability Offloading: The MoR is responsible for calculating, collecting, and remitting all global taxes. If you get audited in Indonesia, the MoR handles it — not your internal team.
• One Report to Rule Them All: Instead of reconciling thousands of transactions across dozens of currencies and banks, your finance team receives a single, consolidated payment and a clean data set.
• ERP Integration: Leading MoR solutions such as FastSpring provide data that flows seamlessly into SAP Commerce, S/4HANA, and other enterprise backends, ensuring the cycles of planning, execution, and analysis are always data-driven and efficient.

This isn’t just about a CSV export — it’s about automated GL mapping. Leading MoR solutions allow you to map transaction types directly to your internal chart of accounts (COA). This turns a week-long, manual month-end close into an automated process, reducing human error and ensuring that your ERP sub-ledgers are always in sync with your actual cash flow.

Lessons From the Field: Navigating LATAM and APAC

Enterprise expansion often fails in these regions due to the infrastructure barrier. According to a Baymard study, businesses that enable regionally preferred payment methods see 21% higher growth rates than those that don’t.

Treating a Brazilian or Indian transaction as “cross-border” by routing it through a U.S. or EU bank is a recipe for involuntary churn. For a local bank, a foreign-processed transaction poses a security risk, leading to higher decline rates.

With an MoR as your local legal entity, the transaction stays “in-country.” This shift doesn’t just lower fees; it fundamentally stabilizes your leaky funnel by ensuring valid customers aren’t blocked by banking security flags.

Similarly, forcing a mobile-first economy into a credit-card-only checkout creates another barrier. While credit cards dominate the West, they are the exception in high-growth regions. 

In India for example, credit card penetration is under 5%, while UPI (Unified Payments Interface) accounts for over 75% of digital retail transactions. Similarly, in Brazil, Pix has surpassed 150 million users. It’s not necessarily about having more payment methods; it’s about having the right ones.

Bridging the Entity Gap for Global Growth

The transition from a domestic success story to a global enterprise powerhouse is no longer a matter of simply “turning on” new regions. For the modern SaaS leader, the merchant of record model is more than a compliance shortcut — it’s a strategic lever for revenue operations. It represents the end of the entity gap, allowing your organization to:

• Reclaim Lost Revenue: Stop losing 20% or more of your international traffic to avoidable cross-border declines.
• Decouple Growth from Headcount: Scale into 200+ countries without hiring a team of tax experts or managing dozens of local entities.
• Empower the Back Office: Transform your finance and tax departments by offloading the liability and complexity of global nexus and tax laws.

Global expansion in 2026 isn’t about being present in every market — it’s about being native to every market. By partnering with an MoR like FastSpring, you ensure that your infrastructure is as agile as your code.

The demand is there. The customers are ready. It’s time to close the gap.

You built the software. Let FastSpring build your global payments strategy.

FastSpring is how Enterprise companies sell online in more places around the world. We handle every payment need — from subscription management to tax collection, remittance, and more — so your business can go farther, faster. We’re also the leading merchant of record for global software companies, powering over a billion dollars in worldwide transactions every year. We’ll manage your checkout, VAT and sales taxes, compliance, and more, freeing you to focus on what you do best: building great software.

Ready to try FastSpring? Set up a demo or try it out for yourself.

The post Headache-Free Global Growth: The Enterprise Guide to Merchant of Record appeared first on FastSpring.

Why Local Payment Methods Matter

For companies looking to expand into South Korea, success depends on moving beyond a “one-size-fits-all” global approach. Here’s how FastSpring’s latest integration drives growth in South Korea:

• Wider Market Reach: Expand market reach to Toss’s 19 million+ active users. Used by over 90% of South Korean smartphone owners, Toss Pay is an essential part of any company’s growth strategy in South Korea.
• Boosted Conversions: While global cards are common, the combined dominance of Toss Pay and Kakao Pay means that it’s essential to capture Gen Z and Millennial shoppers who prioritize the frictionless, biometric one-tap checkout experience these apps provide.
• Operational Efficiency: As your Merchant of Record, FastSpring doesn’t just add a button to your checkout; we handle localized tax collection, compliance, remittance, and currency conversion to KRW automatically.
• Better Margins & Insights: Leveraging local payment rails reduces transaction friction and costs, directly improving your bottom line. Plus, our platform provides the region-specific data you need to forecast growth accurately.

Ready to learn more about Toss Pay? Take a look at our release documentation or take a look at our list of global payment methods to see how we support the entire global market. Schedule some time with our team today to learn about how FastSpring can help you expand into global markets.

The post Expand Your Reach in South Korea: Announcing Toss Pay Support on FastSpring appeared first on FastSpring.

In this episode, we interview payments veteran Lindsay Walker about her thoughts around what it takes to build a global payment offering that players will love. Lindsay shares her thoughts on what good looks like, what really matters when it comes to local payment methods, and how you can think about your payment strategy based on the kinds of games you’re making.

If direct payments outside of app stores or marketplaces is a new topic for you, and you’re wondering how you’ll take full advantage of the new trends in D2C, don’t miss this episode of Growth Stage. Watch or listen now!

Podcast Full Interview: Audio

Podcast Full Interview: Video

The post EP42: Act Global, Play Local: What it Takes to Build Global Payments for Games With Lindsay Walker appeared first on FastSpring.

Now, you’re looking outward. The goal is no longer just regional dominance; it is global expansion.

But selling software to a customer in Texas or Berlin is fundamentally different from selling to one in Rio. Many high-growth LATAM founders fall into the trap of thinking global expansion is just a matter of translating their website and adding a few currency options.

The reality is that once you cross borders, the rules of the game change completely. You’re suddenly exposed to a tangled web of tax liabilities, cross-border payment friction, and operational headaches that can stifle your growth before it truly begins.

Here are the four hidden barriers to global scaling — and how savvy founders overcome them.

1. The Tax Trap

A common misconception among international founders is that your company’s location determines your tax liability. You might think, “”I’m a Brazilian company, so I follow Brazilian tax laws.”

Unfortunately, in the world of digital product sales, tax obligations are almost always determined by where your customer sits, not where you sit.

Here are just a few common examples:

• The U.S. Nexus Maze: If you sell to buyers in the United States, you aren’t just dealing with “U.S. tax.” You’re dealing with economic nexus. Nexus is the legal status you reach when you cross a specific sales threshold. Once you sell more than that amount in a jurisdiction, you must start collecting its local taxes. With rules varying by state, county, and even city, you could find yourself owing taxes in 50+ different jurisdictions, each with its own rates and filing requirements.
• The VAT Burden: Similarly, if you sell into the European Union, you are responsible for collecting Value-Added Tax (VAT) at the buyer’s country’s rate (e.g., 19% in Germany vs. 20% in France) and remitting it to the local authorities.

For a growing finance team, international taxes can be an administrative nightmare. You’re forced to either hire expensive international tax firms or risk audits and fines that could cripple your business.

2. The Payments Paradox

When you expanded within LATAM, you learned that offering trusted local methods like Pix or Mercado Pago was critical to regional success. It’s tempting to apply the same logic globally by adding every possible payment option to your checkout page.

However, an overwhelming number of payment methods can actually backfire, creating decision fatigue or even confusion — which lowers conversion rates.

A customer in the Netherlands wants to see iDEAL. A customer in the U.S. expects credit cards or Apple Pay. If a German buyer lands on your checkout and sees a list of irrelevant options intended for Brazilian or American shoppers, trust erodes immediately.

You don’t need more payment methods; you need a dynamic checkout experience — a system that automatically detects a user’s location and device and displays only the currencies and payment methods relevant to them.

3. The Leaky Funnel

It’s natural to assume that a conversion occurs when a customer clicks “Buy.” In reality, cross-border sales face hidden obstacles that silently kill conversions and erode margins.

First, you face false declines caused by a lack of local acquiring.

• What Is Local Acquiring? It’s the ability to process a payment through a bank in the buyer’s own country. Without it, your transaction looks “foreign” to the buyer’s bank, triggering security flags and declining valid customers. This creates involuntary churn: Your product works, the customer wants to pay, but the banking infrastructure rejects them.

Second, you face value erosion.

• What Is Value Erosion? Even when payments succeed, standard payment service providers (PSPs) often apply high foreign exchange (FX) fees on every transaction. You might be making the sale, but you aren’t capturing the full value of the revenue.

4. The Finance Burden

Selling globally is exciting for the sales team, but without a unified platform, it creates a resource drain on your back office.

The core problem is fragmentation.

• What Is Fragmentation? If you sell in USD, EUR, GBP, and JPY using standard PSPs, your finance team is forced to reconcile multiple merchant accounts, inconsistent report formats, and varying settlement dates.

What should be a simple month-end close turns into weeks of spreadsheet wrangling to consolidate data. This operational debt scales with your growth — the more you sell, the harder it becomes to report on it.

The Solution: A Merchant of Record

The do-it-yourself approach to global sales — piecing together a PSP like Stripe with third-party tax tools and fraud plugins — often leads to a bloated total cost of ownership.

This is why high-growth SaaS companies partner with a merchant of record (MoR) like FastSpring.

When you sell through FastSpring, we become the legal seller of the product. This shift offers three critical advantages:

1. Immediate Tax Compliance: We handle the calculation, collection, and remittance of taxes in more than 240 countries worldwide, including all U.S. tax jurisdictions. You don’t need to register your business in Berlin or Texas; we are already there.
2. Higher Approval Rates: Because FastSpring processes payments locally in major regions, we see significantly higher authorization rates than standard PSPs. We also manage dunning behind the scenes to recover revenue that would otherwise be lost to churn.
3. One Wire, One Report: You can sell in 20+ currencies to maximize conversion, but FastSpring converts and remits a single, clean transfer to your bank account. We absorb the complexity so you can focus on your product and your business’ growth.

Go Global Without the Headaches: Partner With FastSpring

You’ve built a world-class product in LATAM. Don’t let the complexity of global bureaucracy slow you down.

By partnering with FastSpring, you gain a liability shield against tax risk and fraud, while delivering a seamless, localized experience to buyers anywhere in the world.

Ready to scale your SaaS beyond borders? Schedule a demo today and let us handle the complexity.

The post 4 Mistakes LATAM SaaS Companies Make When Selling Abroad — and How to Overcome Them appeared first on FastSpring.

• Stripe, 2Checkout, and FastSpring all offer differing levels of services, especially when it comes to managing tax calculation, collection, and remittance. 
• Stripe is a payment services provider (PSP), not a merchant of record (MoR). 2Checkout offers both PSP and MoR options. FastSpring is an MoR and always includes tax calculation, collection, and remittance with its services.
• Businesses that want more comprehensive tax management services for selling digital products should opt for a merchant of record like FastSpring.

If you’re currently using 2Checkout (now part of Verifone) or Stripe to sell digital goods but are considering switching — from one to the other, or to other options such as FastSpring — you may be wondering whether there are substantial differences between the platforms and their services.

In fact, there are some major differences when comparing 2Checkout vs. Stripe vs. FastSpring.

TL;DR: Stripe markets themselves as a payment services provider (PSP), 2Checkout is a payment service provider with an upgrade option to make them your merchant of record (MoR), and FastSpring is a comprehensive merchant of record from the outset.

What does all of that mean?

In this article, we’ll break down key differences between payment service providers and merchants of record, then we’ll explain what each of the above companies are and what main features they offer.

• Payment Service Providers vs. Merchants of Record: One Major Difference
• What Is Stripe and Who Is It For?
• What Is 2Checkout (by Verifone) and Who Is It For?
• What Is FastSpring and Who Is It For?
• Key Payment Processing Features of 2Checkout vs. Stripe vs FastSpring
• Key Platform Features of 2Checkout, Stripe, and FastSpring
• Handling Tax Calculation, Collection, and Remittance by 2Checkout, Stripe, and FastSpring
• Final Takeaways: 3 Different Levels of Service
• Partner With FastSpring, a Merchant of Record

If you’ve been looking at payment services providers but want a more comprehensive merchant of record to help you grow your business internationally, we can help. FastSpring provides an all-in-one payment platform for SaaS, software, video games, and other digital products businesses, including VAT and sales tax management, payment localization, and consumer support. Interested? Set up a demo or try it out for yourself.

Note: Information in this article was validated at time of publishing and is subject to change.

Payment Gateways, Payment Processing, PSPs, MoRs — What’s the Difference?

Step one of understanding the differences between 2Checkout vs. Stripe vs. FastSpring means clarifying a few helpful definitions:

• Payment services provider (PSP).
• Merchant of record (MoR).

Payment Services Provider

A payment services provider (PSP) is a platform that serves as a bridge between businesses wanting to sell a product, and the more specialized services and networks you need on the back end such as payment gateways, payment processors, and a merchant account. 

A PSP makes it easier for those businesses to sell their products online because the businesses don’t have to directly interface with payment gateways and payment processors — the businesses can just use the PSP, and the PSP will handle payment connections in the background. 

TL;DR: What’s happening behind the scenes is all pretty complicated.

• A payment gateway acts as a secure super highway to connect businesses to payment processors. It collects, encrypts, and transmits the sensitive information needed for a transaction.
• A payment processor is the piece on the back end that connects the payment gateway with the merchant’s account and card association networks. The issuing and acquiring banks can then authorize or deny the transaction request.
• A merchant account is a business-specific bank account that allows you to accept and process payments from credit and debit cards; it’s where the funds are held until the transaction is completed.

If all of that sounds really complicated to you, that’s because it is — which explains the appeal of a payment services provider that can handle all of that for you.

Merchant of Record

A merchant of record (MoR) includes the services of a payment services provider, but much more — it becomes the entity technically selling the product.

This means the MoR becomes the entity worrying about card brand rules, regulatory rules in many geographies, risk, and even taxes — which means you don’t have to. FastSpring’s experts will use the latest tools and techniques to manage risk, and we’ll even be responsible for calculating, collecting, and remitting taxes.

Merchant of record and payment services provider platforms may each offer varying levels of additional features, such as integrations and API connections, subscription management functionality, customer support, and more. 

If you’ve been looking at payment services providers but want a more comprehensive merchant of record to help you grow your business internationally, we can help. FastSpring provides an all-in-one payment platform for digital-first businesses, including VAT and sales tax management, payment localization, and consumer support. Interested? Set up a demo or try it out for yourself.

2Checkout vs. Stripe vs. FastSpring: What Are They and Who Are They For?

What Is Stripe and Who Is It For?

Stripe is a payment services provider that focuses on payments, payouts, and managing business online.

The many products on Stripe’s menu are sometimes bundled and sometimes separate for an additional cost, which can get a little confusing as you click through various product pages. 

The core offering for payments is their Payments product, which includes the products Checkout, Payment Links, and Elements, but there are many features even within those products that are additional costs, such as additional payment methods, bank debits and transfers, point-of-sale (POS) Terminal, and post-payment invoices. 

Stripe pricing starts low per transaction, but it will add up quickly if you’re looking for a more robust service.

Is Stripe a merchant of record? 

No. Stripe as a PSP does not assume the same responsibilities an MoR does, such as managing risk, assisting with chargebacks, and handling taxes. When rules change in any jurisdiction where your customers live, you’re responsible for updating your checkout to comply.

Stripe does offer Radar, a product with two different levels of fraud and risk management tools, but if you want the advanced tools, it will cost extra per transaction.

Stripe also offers a Tax product that will calculate, collect, and report taxes in 90+ countries, and they can register in various countries for you — but the price goes up very quickly as you add additional countries, and there are limits on the number of tax filings and registrations per year as well as the number of transactions per month. 

Because Stripe is not a merchant of record, it can be used for selling physical goods, but its platform and services may not be as tailored to businesses that were built to sell only digital goods, software, SaaS, and similar.

What Is 2Checkout and Who Is It For?

2Checkout (now part of Verifone) bills themselves as a monetization platform for both digital goods and retail businesses. The pricing page at 2checkout.com shows that with their 2Sell base product, you can “sell any type of product.”

They offer three different levels of products: 2Sell for mobile and online payments worldwide, 2Subscribe to add on subscription management features, and 2Monetize to further add features such as global tax and regulatory compliance, invoice management, and more payment methods. 

They also have additional add-ons for renewal recovery, premium support, affiliate partnering for 2Monetize, complex subscription billing for 2Sell, and an enterprise pricing package called 4Enterprise.

Is 2Checkout a merchant of record?

2Checkout offers both a payment services provider model and a merchant of record model. While their 2Monetize page and MoR guide page do not reference each other, 2Monetize is apparently 2Checkout’s MoR product.

What Is FastSpring and Who Is It For?

FastSpring is a merchant of record that for over two decades has been serving B2B and B2C sellers of SaaS, software, video games, mobile apps, AI, eLearning, and other digital goods. 

Our payments features help businesses go global instantly, but because we are inherently an MoR, we also help businesses increase profitability while mitigating risk — all while reducing your payments, sales tax, and subscription management tech stack down to one solution.

FastSpring offers global payments, multiple kinds of checkouts, subscription management tools for every stage of the subscription life cycle, fraud prevention, chargeback management, tax compliance, and more — all of which are included. 

We’re connected to multiple payment gateways (increasing payment authorization likelihood), and we’re laser focused on making it super easy to ensure you’re following all the rules — because our experts are responsible for risk and chargebacks. 

FastSpring’s pricing is a simple, single-package pricing model — not a base plan that requires lots of expensive add-ons. Our team will work with you to figure out a rate based on your transaction type and volume.

Note that there is no minimum transaction volume to use FastSpring, as we want to be the digital commerce partner that helps your business grow. 

For more pricing information, reach out to our team.

Is FastSpring a merchant of record?

Yes! FastSpring is a merchant of record, which means that we’ll handle payment services, but we’ll also become the party actually selling the product, so we’ll manage risk, chargebacks, and global VAT and taxes — so you don’t have to.

If you’ve been looking at payment services providers but want a more comprehensive merchant of record to help you grow your business internationally, we can help. FastSpring provides an all-in-one payment platform for digital-first businesses, including VAT and sales tax management, payment localization, and consumer support. Interested? Set up a demo or try it out for yourself.

Key Features

If you’re considering implementing a payment services provider or merchant of record for your business — or considering switching providers — there are many features you may need to know about before making a decision. 

Here are some important options to consider, with details on how 2Checkout, Stripe, and FastSpring handle each of them.

2Checkout vs. Stripe vs. FastSpring: Payment Processing Features

Each provider’s basic payment capabilities include some combination of debit and credit card payments, alternative payment types, localized currencies, chargeback handling, fraud detection, and more to help ensure a successful sale. 

Stripe

Stripe accepts around 17 different cards, including global brands like Visa and Mastercard, Discover, Europe’s Cartes Bancaires, and Asia’s China Union Pay. They also take various bank debits such as ACH and SEPA, redirects, and transfers that connect directly to bank accounts, and they work with many popular wallet payment systems (such as Apple Pay, Google Pay, and PayPal). To learn more, visit their documentation page on payment methods. 

Stripe supports processing charges in over 135 currencies. Currency conversions get a little complicated, so check out their documentation on currency conversions for all the details.

Additional fees are applied for currency conversion and cross-border transactions.

Chargeback protection and fraud protection are also available, both for additional fees per transaction. 

2Checkout

2Checkout accepts major worldwide credit and debit cards such as Visa and Mastercard, as well as various other regional cards across Europe, Asia, Brazil, and India. Various major digital wallets are also accepted, as are some online banking and direct debit payment options.

For offline payment methods, 2Checkout also facilitates wire/bank transfers, purchase orders, and a few region-specific options; visit the Verifone documentation page on payment methods for more details. 

On their documentation page for pricing localization, it details that pricing localization settings can be enabled to display different prices based on geolocation by IP address, but that this feature is only available to 2Checkout Enterprise Edition accounts. 2Checkout offers around 100 billing currencies.

Risk and fraud protection are included in all three packages, 2Sell, 2Subscribe, and 2Monetize. 2Checkout states that while banks handle chargebacks directly, 2Checkout is still involved in the resolution of the dispute, acting as a mediator between the bank/PayPal, the buyer, and you. 

FastSpring

FastSpring accepts many major worldwide credit cards and debit cards such as Visa, Mastercard, American Express, Discover, JCB, and UnionPay, as well as ACH direct debit and SEPA direct debit. Wire availability is available in select countries and currencies, as well as PayPal, Apple Pay, SOFORT, and various other popular payment options which are detailed on FastSpring’s documentation page for payment methods.

FastSpring enables its users to set up their stores to display currency localization in many different ways, based on what’s best for your business. FastSpring can make the conversion, or you can set a fixed price in each currency for each of your products; which currency is displayed based on location can be chosen by FastSpring, by you, or by the shopper. 

To remain a leader in fraud and risk support, FastSpring is partnered with global risk analysis and fraud prevention leader Sift to ensure secure payment transactions and PCI compliance, with increased accuracy in fraud decisions and better approval rates (and fewer false positives). 

And since FastSpring is a merchant of record, we’re responsible for keeping fraud rates and chargebacks under certain thresholds.

If you need support assistance with chargebacks, our Risk team can help, and the FastSpring platform also includes a Chargeback Overview Dashboard to help you keep track of chargeback rates, which products are most frequently involved, and a comprehensive log of the most recent chargebacks with filters to help you drill down for analysis.

2Checkout vs. Stripe vs. FastSpring: Platform Features

Besides the online payment processing features and services that are core to PSPs and MoRs for online businesses, the platforms and how they integrate with your business (and website) can make or break how well they help your business move product and support a successful sale. 

Here are rundowns on checkout, payouts, integrations, APIs, reporting, and analytics for 2Checkout, Stripe, and FastSpring. 

Stripe

Stripe offers a hosted, brandable checkout for both one-time payments and recurring billing, which can be embedded on your own site, or you can pay a monthly fee to use their hosted checkout with a custom URL of your own. They have a tool to walk prospects through the customizations they offer so you can see what the checkout page might look like. 

Many factors go into how and when you can receive payouts from Stripe, especially dependent on your country, so be sure to check out their documentation page for more information. But if you’re in an eligible country, you may be able to receive daily payouts (although weekly, monthly, or manual schedule options may also be available).

Stripe’s multi-currency support for payouts appears to include the same currencies as their presentment currencies, meaning that if you can process payments in a currency with Stripe, you can receive a payout in that currency.

Stripe has a directory of partners that may offer easy integrations or connections to Stripe for ease of use, but they offer limited support in this area and refer users to the third parties for assistance when needed. They also have a REST API, with Payment objects used to facilitate payments, as well as SDKs. 

Some of Stripe’s financial reports are free, but for more advanced tools, you’ll need to upgrade your account and/or request beta access. For example, Advanced Revenue Reporting is still in beta, and their custom reporting offering using SQL, called Sigma, starts at $15 per month for up to 250 charges (plus 6¢ per additional charge).

Stripe offers some strong analytics tools, such as via their payment authentication report, but that requires their Sigma product.

2Checkout

2Checkout offers a few checkout types. Users can choose between one-step or multi-step popup experiences with their Inline cart, or users can choose the hosted checkout option that redirects shoppers to a 2Checkout page.

A third option for users of popular ecommerce platforms like Shopify, Magento, and Woocommerce is to integrate 2Checkout with that site’s native online shopping cart; a list of those sites can be found on their website.

2Checkout also offers a few integration connectors with popular CRMs like Salesforce and Adobe Analytics. Also available are an API and webhooks. 

By default, 2Checkout’s payouts occur on a weekly, biweekly, or monthly basis depending on the type of 2Checkout package you use, and minimums of 50 or 100 USD/EUR/GBP also apply. Those are the only three currencies in which 2Checkout will facilitate payouts.

2Checkout’s Business Intelligence, an engine for custom reporting and scheduled reports, is included in all three of their pricing packages, but advanced features like user log audits, subscription analysis, and financial reporting are not available in their base package of 2Sell. 

Analysis can be done using the reporting dashboard, and third-party analytics tools such as Google Analytics can be connected to your account for cart web analytics (on request for 2Sell and 2Subscribe users; included in 2Monetize).

FastSpring

FastSpring offers three types of checkouts:

• A Web Storefront hosted by FastSpring serves as the default option, allowing users to use product catalogs from their own websites or to utilize FastSpring’s platform to display products.
• A Popup Checkout utilizes your own website’s catalog and then provides a same-page experience by displaying the checkout window in front of your webpage. 
• Embedded Checkout keeps the checkout experience on your site without the need for redirects or popups. 

For payouts, most FastSpring sellers have a two per month frequency, but this can also be set to monthly. FastSpring can also change the minimum payment amount at your request. There are five currencies available for payouts — USD, EUR, GBP, AUD, and CAD — but there is a small currency conversion fee for payouts in currencies other than USD.

FastSpring’s dashboards enable users to dig into reporting around revenue, subscriptions, and even chargebacks. See transaction rates, net sales, refund rates, and more to assess maximum revenue impacts by each product. Understand critical subscription trends across regions, over time, and by individual products with built-in widgets for MRR, customer lifetime value, rate of churn, and more.

That data can be exported to CSV or JSON, or you can use FastSpring’s data API and webhooks to generate revenue and subscription reports to take your data wherever you need it.

FastSpring offers many tools that work in combination to empower your integrations: extensions, webhooks, APIs, and the FastSpring Store Builder Library (our JavaScript library). These are the tools and systems that help businesses get up and running quickly on FastSpring, so they can go global faster.

The developer-friendly, ready-to-deploy FastSpring Store Builder Library (SBL) enables you to pass sensitive information in an encrypted format — which is great for integrations — but it’s also great for setting up your store initially. This highly customizable JavaScript library helps quickly embed FastSpring ecommerce experiences into your website or application. 

Webhooks work with your backend or third-party systems for advanced integration and tracking events, and the FastSpring API lets you easily query your sales and subscription data via GraphQL or REST format on a programmatic basis.

Extensions such as MailChimp for emails, AdRoll for retargeting, and Google’s Analytics, AdWords, and Tag Manager make it easy to integrate FastSpring’s platform with other helpful business tools.

2Checkout vs. Stripe vs. FastSpring: Calculating, Collecting, and Remitting Taxes

Tax calculation, collection, and remittance are very important actions a business needs to take to stay compliant wherever its product is being sold. 

Each payment services provider may handle different combinations of those functions, while a merchant of record should handle all of them. Knowing which pieces your provider takes care of for you (and if you’ll need to handle any yourself) is key to keeping your business compliant — and avoiding hefty tax fines. 

Stripe

By default, Stripe won’t calculate or collect taxes for you, and it won’t file or remit any of those taxes either. 

If you upgrade to the Stripe Tax product at the Basic level, it will automatically calculate and collect taxes for you, but there are per-transaction fees that vary based on the kind of integration you use.

If you upgrade to Stripe Tax Complete, they will manage obligation monitoring, registrations, calculations, collections, and filings, starting at $90 per month with a minimum one-year contract, and additional fees if the registrations and filings are outside of the U.S. — but that only includes two registrations per year, 200 transactions per month, 2,000 calculation API calls per month, and four filings per year. The slider-bar pricing tool on the Stripe Tax page suggests that per-month fee will get expensive quickly based on the number of registrations, transactions, API calls, and filings you need. 

Key takeaway: If you’re looking for a turnkey tax solution, Stripe probably isn’t what you want.

2Checkout

Since 2Checkout offers either a PSP or a MoR model, there are different levels of tax handling with each type. 

For businesses using their PSP packages (2Sell or 2Subscribe), there is a tax calculator that can be activated, but it is based on your tax data supplied to 2Checkout and comes with a disclaimer to that end. There appears to be a rather lengthy process to get the tax calculation feature set up and activated. 

For businesses using their 2Monetize package, global VAT and sales tax collection and handling are included, and 2Checkout handles VAT and compliance.

FastSpring

FastSpring is intrinsically a merchant of record, so tax calculation, collection, and remittance in over 200 regions around the world is always included for businesses using our services. 

You also won’t need to register for tax purposes in all of those regions, since FastSpring is the entity actually selling your product. Our tax experts stay up to date on global VAT, GST, and sales taxes so you don’t have to, and we file and pay $50M+ in taxes for our customers every year.

Final Takeaways: 2Checkout vs. Stripe vs. FastSpring

In summary, Stripe is an entry step into using a payment services provider, but it isn’t a merchant of record and won’t handle your taxes for you unless you upgrade with expensive add-ons. You can accept payments, but you’ll still have a lot of other business management to handle on your own or with additional partners besides Stripe. 

If you have a small business or startup, Stripe may be a serviceable option at first, but you could quickly outgrow it if you take your business global.

For starters, you’ll have dozens of jurisdictions to manage risk and taxes in, you’ll need to decide how to manage chargebacks, and you’ll need to set up subscription management tools and settings like dunning for rebilling, etc. — or you can watch the Stripe or third-party transaction fees stack up as you add on more products to cover as much of that as they can.

2Checkout offers either just PSP services or an upgrade to MoR services, but some platform features like pricing localization and certain reports are only available on a limited or upcharge basis. Their PSP-only services will calculate taxes for you, but that’s based entirely on tax data you supply to them, so you’ll still need to worry about those if you don’t upgrade to 2Monetize.

To compare, FastSpring handles both payments and taxes by offering one comprehensive MoR service. Choose between multiple checkout types with localized pricing, integrate with other important business tools, and stop worrying about global taxes as your business grows.

This makes FastSpring very user friendly for B2B and B2C SMBs selling SaaS, software, video games, mobile apps, AI, eLearning, and other digital goods.

FAQs

Partner With FastSpring 

If you’ve been looking at payment services providers but want a more comprehensive merchant of record to help you grow your business internationally, we can help.

FastSpring provides an all-in-one payment platform for digital-first businesses, including VAT and sales tax management, payment localization, and consumer support.

If you think FastSpring could be the right payments and MoR solution for your business, reach out to our team or set up a free account.

Related reading: SaaS Companies: Four Signs You’ve Outgrown Stripe: Growth expert Fred Linfjärd (a former FastSpring user himself) explains the disadvantages of DIY-ing a payments solution with Stripe, and how FastSpring frees up dev resources to focus on your core product instead of payments and monetization.

This post was originally published in October 2023 and has been updated.

The post 2Checkout vs. Stripe vs. FastSpring: Comparing Payments, Taxes, and Platform Features (+ Pricing) appeared first on FastSpring.

If you haven’t seen this prompt on your screen, you may have been living under a rock for the past two years. For everyone else, this is the instantly recognizable greeting from OpenAI’s ChatGPT.

It goes without saying that AI is more than just hype or a passing phase. In fact, it has permanently altered the way we work, shop, write, research, and even think. The global AI market is projected to swell from over $638 billion in 2024 to $3.68 trillion by 2034, and with 71% of organizations now using generative AI, global expansion isn’t just an opportunity — it’s a necessity.

So, what can high-growth AI companies do to break into these markets effectively while remaining compliant with local, rapidly changing legislation?

Luckily, FastSpring has the answer.

These companies need a strategy to navigate the complex global tax, payments, and compliance landscape. As your SaaS, API, or token-based service becomes accessible worldwide, your team is suddenly liable for a tangled web of complex regulations.

This is where most AI startups get stuck. They are forced to divert precious engineering resources to build and maintain a global billing and tax compliance machine. For this reason, they often deploy a basic Stripe implementation; however, time and again, companies realize that Stripe costs more and doesn’t account for all the challenges and complexity that come with a global sales strategy.

Instead, partnering with a full-stack merchant of record (MoR) such as FastSpring removes the operational burden of payments, taxes, and subscriptions, so you can focus on enhancing your product and increasing market share.

Global Compliance Is Not One Size Fits All

While your team is focused on training models rules, a different set of rules is coming for your company as you expand globally: tax and regulatory compliance. And for AI companies, this challenge is even more acute than it is for traditional SaaS.

Take global sales tax for example. This is the most immediate and costly challenge. If you sell digital services to a customer in the European Union, you are required to collect VAT at the buyer’s local rate (which, at the time of writing, varies from 17% to 27%) and then file those collected taxes with the correct authorities.

The shift away from simple compliance isn’t unique to the EU. In the United States, the rules are even more fragmented. Sales tax rules for digital services vary by state. Some states, such as Colorado, even allow individual counties and cities to set their own tax rates, resulting in thousands of potential tax jurisdictions. Each one requires a separate filing.

Failing to manage this tax complexity not only risks fines but also compromises your ability to operate.

Beyond taxes, your checkout itself becomes a barrier:

• Localized Payments: Credit cards are not king everywhere. In the Netherlands, customers prefer iDEAL. In Brazil, it’s PIX. Failing to offer these payment methods risks a high cart abandonment rate.
• Localized Currencies: 76% of shoppers prefer sites that display pricing in their home currency. Failing to do so kills conversion.
• Data Governance: You will be responsible for processing payment data securely in accordance with regional requirements, such as PCI compliance.

Why AI Is Different

In the payments world, AI is increasingly being treated as a high-risk category. The AI industry, especially B2C tools, is far more prone to high chargeback rates. A user might dispute a charge because they “didn’t like” the quality of the generated text or art, claiming it wasn’t what they were promised.

This means AI companies don’t just need a payment solution — they need a sophisticated partner with intelligent models to manage this new and specific type of risk. 

When an AI company partners with a trusted merchant of record such as FastSpring, it gains a crucial advantage. FastSpring maintains dedicated, advanced risk models that actively prevent unwarranted chargebacks. More importantly, partnering with an established MoR provides immediate payment credibility with banks and acquirers.

This credibility translates directly to better approval rates.

The reason is twofold: First, you gain a known, respected partner advocating on your behalf; second, the millions of successful transactions flowing through FastSpring’s trusted network signal to banks that they are processing on behalf of a reliable entity. Ultimately, higher approval rates mean less lost revenue and more profit in your pocket.

How FastSpring Solves for AI Scaling

At FastSpring, we know that seamless compliance and checkout transactions drive conversion and revenue. As your merchant of record, FastSpring becomes the legal seller of your product. The moment a customer clicks “Buy,” they are purchasing from us.

Our goal is simple: to give you the compliance and payment infrastructure that generates meaningful revenue so that you can focus on your code.

• Comprehensive Product and Entitlement Management: FastSpring provides robust in-app tools to manage your entire product catalog, including subscriptions, coupons, and promotional offers. We go further by integrating directly with your backend systems; this ensures that your internal usage monitoring doesn’t just track costs — it actively informs subscription status, controlling product access and feature availability automatically.
• Complete, Offloaded Tax and Compliance: You don’t need to register for VAT in Spain, calculate sales tax in rural Colorado, or remit payments to the Japanese government. FastSpring does all that. We are responsible for calculating, collecting, and filing all global sales taxes and VAT.
• Global Payment Localization: Our platform comes pre-integrated with international payment methods and major currencies. We automatically detect the user’s location and offer them the currencies and payment types they trust, including iDEAL, Pix, UPI, Kakao Pay, and more.
• Intelligent Fraud Prevention and Risk Management: Because FastSpring processes billions of dollars in secure traffic, our reputation with banks can help drive higher authorization rates. Our intelligent fraud models are tuned to identify and block bad actors, reducing your chargebacks and mitigating the cross-border payment risk that is unique to the AI industry.
• Flexible Billing for AI Models: FastSpring provides robust tools to facilitate sophisticated subscription management, perfectly suited for metered and usage-based AI services. For example, with FastSpring’s Managed Subscriptions, your system retains control over billing logic. Your platform monitors customer usage (tokens used, compute time, API calls, etc.) and then leverages our API to dynamically set the price and trigger the charge. This seamless integration allows you to bill variable, usage-based amounts on your own schedule — while offloading all the underlying payment and compliance complexity to us.
• Full-Service Payment Support: If a customer has a problem with a payment, our global support team handles it, not yours.

To learn more about HomeDesigns AI or see their FastSpring checkout, visit their website.

Go Global With FastSpring

Expanding into new markets doesn’t have to be complex. Your company’s core mission is to build groundbreaking AI, not to become an expert in EU VAT returns.

With FastSpring’s Merchant of Record platform, you get a partner that handles the entire complexity of global commerce. You can tap into high-growth economies, reduce cart abandonment, and increase revenue, all while dedicating 100% of your resources to building the future of AI. 

Book a demo today to see how our AI-specific solution protects your revenue and empowers sustainable growth.

The post Payment Solutions for AI Startups: How a Merchant of Record Solves Global Compliance appeared first on FastSpring.

• Unlike payment service providers (PSP), which handle only the processing of payments, a merchant of record (MoR) handles the end-to-end payment flow and takes on full liability for the transaction.
• Partnering with an MoR simplifies the financial and legal operation — and the timeline — required for digital-first businesses to sell globally, by handling tax collection and remittance, regulatory compliance, checkout localization, and more.
• The MoR model is often more cost-effective than ad hoc payments solutions.

Digital-first companies can easily sell to customers around the world, right? So why not market your product globally?

Anyone who does business across borders can tell you: It’s not that simple. 

• Do you need to translate your website?
• Do you accept their country’s form of currency?
• Do you know local privacy and tax regulations?

We spoke to a software entrepreneur based in the Caribbean who was facing this issue.

Customers liked his products, and his company was growing rapidly. “But my country has less than a million people,” he told us. “If I really want to grow my business, I need to expand to other markets.”

He knew that selling his software in other countries would create a variety of tax, transaction processing, and compliance problems.

“That’s why I need a merchant of record,” he explained.

In this piece, we’ll explain what a merchant of record is — and why using one can make it much easier for digital-first companies to go global.

If you’re looking for a merchant of record to help you grow your business internationally, we can help. FastSpring provides an all-in-one payment and subscription platform for thousands of SaaS, software, video games, and digital products businesses, including VAT, GST, and sales tax management, payment localization, and consumer support. Interested? Set up a demo or try it out for yourself.

What Is a Merchant of Record?

A merchant of record (MoR) is the legal entity that sells goods or services to a customer. Companies can be their own MoR, but you can also outsource this work to entities that sell goods or services on behalf of a business and, by doing so, take on the legal liabilities related to the transaction for you.

The merchant of record model helps you stop worrying about the regulatory and tax compliance issues involved with accepting payments from around the globe — so you can skip the hassle and focus on what you do best: building great products.

How Is a Merchant of Record Different From a Payment Service Provider?

A payment service provider (PSP) such as PayPal or iDeal is a platform that acts as a bridge, connecting sellers with back-end networks required for processing payments, such as payment gateways, payment processors, and merchant accounts.

You’re probably already working with one or two PSPs — whichever are most popular in your country or the country of your customers.

A PSP only handles the processing of payments, not anything else that goes into an order process, such as VAT (value-added tax), GST (goods and services tax), and sales taxes or payment disputes.

Some PSPs like Stripe accept multiple currencies — which is a big step towards being able to support customers from multiple countries, regions, or jurisdictions.

But various PSPs are popular in different places. And while PSPs are equipped to accept payments in different countries, they’re not responsible for helping you comply with tax requirements for each jurisdiction.

In comparison, a merchant of record handles all of that. The MoR becomes the seller of record (SoR) and, as such, the one to worry about differing rules across credit and debit card brands, regulations in each jurisdiction, consumption taxes, and general risk and liability.

Unlike with a PSP, when you partner with a merchant of record, it takes the lead on risk management, chargebacks, and global VAT, GST, and sales taxes for every transaction.

8 Reasons to Use a Merchant of Record

For many digital-first companies, taking the business global is a no-brainer. But doing so isn’t as simple as just deciding to. You need to think about:

• Navigating sales tax, VAT, and GST regulations.
• Figuring out how to accept multiple currencies.
• Understanding the nuances of regulatory compliance in various countries.
• Staying up to date on all of the above as regulations flux and evolve.

Solving for the above — and more — can add unnecessary complexity to your operations and slow down expansion plans.

That’s where a merchant of record can help your business grow more quickly, and with less liability, too.

1. A Merchant of Record Handles Sales Tax, VAT, and GST for Digital Goods

It’s one thing to ignore transaction-related taxes or kick the can down the road on figuring them out. But it’s a common mistake for companies to assume that sellers of digital goods aren’t required to collect or remit sales taxes, VAT, GST, and other consumption taxes for digital goods sold via online payments.

That just isn’t true. Sales of digital goods — including software, video games, mobile apps, etc. — often require the same consumption taxes as sales of physical products.

Ignoring that fact or putting off figuring it out could have disastrous consequences that reach well beyond just back taxes, ranging from exorbitant interest fees and penalties to multi-million dollar valuation adjustments.

A merchant of record is the ideal solution, allowing you to offload the complexity of sales, VAT, and GST tax collection and remittance. You can expand into new markets and regions quickly, all while avoiding the consequences of ignoring global tax laws altogether.

2. An MoR Covers Your Foundational Billing Tasks

Even before you add global selling into the mix, many software and SaaS companies struggle with foundational billing tasks, such as:

• Ensuring compliance with PCI-DSS standards for cardholder information, along with the EU General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA), and Data Privacy Framework (DPF) requirements. (Visit our Trust Center here.)
• Decreasing payment failure rates.
• Managing and maintaining relationships with merchant banks, financial institutions, and payment processors.
• Negotiating payment processing fees.
• Handling payment disputes, refunds, and chargebacks.
• Calculating, filing, and remitting software sales tax, VAT, GST, and other consumption taxes.
• Risk analysis and fraud prevention.
• Reconciling transactions, payments, refunds, cash flow, and more.

Some of this work may be done for you by your accountant, subscription management platform, or payment processor, but they’re probably not doing everything — such as helping you decrease customer churn or issuing refunds.

Most likely (unless you’re already working with an MoR), you’re doing some of this work internally — or not at all.

All of the above is just one step. When you sell products to buyers in another country, things get even more complicated.

This kind of patchwork approach to billing tasks makes it easy for things to fall through the cracks — and it’s likely costlier than an all-in-one payments solution.

3. A Merchant of Record Calculates and Remits VAT, GST, and Sales Taxes for Digital Goods Based on the Buyer’s Location

When selling software or digital goods, VAT, GST, and sales tax are almost always calculated based on the location of your customer, not the location where you do business.

(This is different from professional services, which are often taxed based on where the service is performed, rather than the location of the buyer.)

For example, let’s say you sell software (or a digital product) and you choose a simple payment processor (such as Stripe or PayPal).

In that situation, if you have enough customers in Canada to meet the Canadian threshold for tax filing, then you must track, file, and remit taxes in Canada — regardless of your location or where your company is headquartered.

With a merchant of record, you’ll outsource the sales tax, GST/HST/QST, and many of the compliance responsibilities to your MoR — who will track, file, and remit taxes on your behalf, in Canada and in all the various countries where your customers live — instead of you doing that on your own.

(Did you know that, unlike the simpler VAT system that many countries and regions utilize, Canada actually has GST, HST, PST, QST, and even RST depending on the province? Canada applies several different tax types depending on the province or territory, so navigating compliance can get tricky quickly. If you didn’t already know that — and you don’t want to have to learn — a merchant of record might be what you need for your digital products business.)

If you multiply the above example by the number of countries where you have customers, you can see why so many digital-first companies choose the MoR model over simple payment processing when they expand globally.

With a merchant of record, you can grow your business much faster, with much less stress and hassle and much less cost from accountants and tax professionals.

4. A Merchant of Record Keeps Up With Ever-Changing Global Payment Rules for You

The specific requirements for doing business across borders vary from country to country, and they can vary further based on how much business you’re doing there, the structure of your business, and a variety of other factors.

Common steps for setting up successful cross-border business include, at a minimum:

• Learning the preferred local payment methods of a given region.
• Handling currency conversions when taking global payments.
• Understanding foreign tax requirements, including whether your offerings are subject to a value-added tax (VAT) or goods and services tax (GST).
• Detecting and handling fraud, which can be more prevalent on international payments.

That’s work you do per country, which means if you have a lot of customers in ten different countries, that’s ten sets of the above steps to figure out — a timely and costly process.

And this is the most important reason why it’s so helpful to use a merchant of record service when you’re ready to go global.

At FastSpring, we build and maintain relationships with tax law specialists around the globe, so we’re always up to date on laws and regulations if and when they evolve.

5. An MoR Simplifies Your Financial Operations

You didn’t start a software company to spend your days figuring out complex tax rules in countries all over the world. You started it because you had a great idea for a product, and you knew how to build it.

A merchant of record focuses on the selling, so you can get back to what you do best: making a great product.

The MoR acts as a reseller, buying the software from you, then reselling it to your customer. Instead of working directly with customers and myriad financial service providers, you communicate with just one entity — your MoR.

Your customers will still visit your website to buy software, games, in-game items, mobile app subscriptions, or other digital products — or to update their subscriptions — but when they’re ready to check out, they buy the products from the MoR.

They’ll receive a receipt from the MoR, and the MoR will be the company name listed on their bank account/bank statement or credit card statement. This is how the MoR becomes the liable party for the sale.

MoRs maintain robust ecommerce platforms to manage payment and tax processes — in addition to checkout localization and optimization.

At FastSpring, we also provide other services such as digital invoices and interactive quotes that are a part of our customer’s financial system.

6. A Merchant of Record Is Cost-Effective

If you’re paying a lawyer or accountant to figure out the tax obligations and business regulations of each country where your customers live, those costs add up fast. That’s before you even start localizing your payment platform, such as making sure your site accepts the preferred payment method of each country.

As an MoR, FastSpring already has an understanding of local taxes, payment gateways, and more. This makes it the most cost-efficient way to collect customer payments and remit taxes from a global customer base.

In summary, cobbling together a payment infrastructure that encompasses all the functions an MoR handles is a lot more costly and complex than dealing with one MoR partner.

7. A Merchant of Record Enables You to Go Global Immediately

Localizing pricing, currency, and your checkout flow for an optimal customer experience is a project that often takes years for companies that build those features on their own.

Since an MoR already has everything set up and ready to go, as soon as you become a customer of a global MoR, the currency, preferred payment options (from credit cards to digital wallets to global PSPs), and checkout experience can be customized for your customers right from the start.

8. A Merchant of Record Helps You Stay Compliant

Each country has its own sales and privacy regulations, and they’re always changing. This means you’ll need to keep a lawyer on retainer who’s familiar with the ever-changing global tax regulations if you’re handling compliance internally.

Once again, an MoR will do this work for you, avoiding costly fines and lawyer fees.

Frequently Asked Questions

What Does It Mean to Be a Merchant of Record?

A merchant of record (MoR) is the legal entity that sells goods or services to a customer. Companies can be their own MoR, but you can also outsource this work to entities that sell goods or services on behalf of a business and, by doing so, take on the legal liabilities related to the transaction for you.

What Is the Difference Between a Merchant of Record and a Payment Service Provider?

A payment service provider (PSP) is a platform that acts as a bridge, connecting sellers with back-end networks required for processing payments, such as payment gateways, payment processors, and merchant accounts.

A PSP only handles the processing of payments, not anything else that goes into an order process, such as tax calculations and remittance, payment disputes, or regulatory compliance.

To compare, a merchant of record handles all of that. The MoR becomes the seller of record (SoR) and, as such, the one to worry about differing rules across credit and debit card brands, regulations in each jurisdiction, consumption taxes, and general risk and liability.

Your MoR, then, takes the lead on risk management, chargebacks, and global VAT, GST, and sales taxes for every transaction.

What Are the Benefits of Partnering With an MoR?

The most important benefits of partnering with an MoR include:

• Reducing the financial and legal burden on your company.
• Allowing you to expand globally immediately.
• Freeing you from having to calculate and remit taxes in every jurisdiction you sell to, and from having to stay up to date on ever-shifting regulations.
• Saving you money with a more cost-effective, all-in-one platform versus patchwork payment processing, subscription management, and accounting solutions.
• Improving your customer experience and boosting conversions thanks to features like advanced payment routing to mitigate payment failures, localized checkout, acceptance of preferred payment methods around the globe, consumer support, and more.

What Are the Key Responsibilities of an MoR?

Key responsibilities of an MoR include:

• Global online payment processing.
• Tax and regulatory compliance.
• Fraud prevention and risk management.
• Handling payment disputes, refunds, and chargebacks.
• Subscription management.

In summary, an MoR handles the end-to-end payment infrastructure, from localizing your checkout flow and processing payments to calculating and remitting consumption taxes like sales tax, VAT, GST, and more.

How FastSpring Can Help

FastSpring is the leading full-stack merchant of record service for growth-stage SaaS, software, video game, mobile app, and other digital products businesses. If you’re looking for a merchant of record to help your business expand globally, we’re here to help.

Our platform serves as an all-in-one payment and subscription platform that handles everything from payment and checkout localization; to sales, VAT, and GST tax management; to customer support for end consumers, and so much more.

Learn more about how FastSpring can help you grow your business globally: Set up a demo or try it out for yourself.

This post was originally published in 2021 and has been updated.

The post What Is a Merchant of Record? (And Why Should You Care?) appeared first on FastSpring.