What's the difference between a payment processor and a merchant of record?

A payment processor (like Stripe or Helcim) moves the money, but you remain the seller of record and are responsible for collecting and remitting sales tax or VAT and handling compliance. A merchant of record (like Paddle or Lemon Squeezy) becomes the legal seller, so they take on tax calculation, remittance, and much of the liability in exchange for a higher fee. If global tax compliance is a headache you'd rather outsource, a merchant of record can be worth the premium.

Do I need separate tools for in-person and online payments?

Not necessarily. Platforms like Square and Stripe can handle both in-person and online sales under one account and set of reports, which keeps reconciliation simpler. That said, specialized needs (a busy restaurant, or a subscription SaaS) are often better served by a purpose-built tool even if it means running more than one system.

How do I compare processing costs fairly?

Look past the headline rate. Add up the monthly platform fee, per-transaction pricing, hardware costs, any gateway fees, and international or currency markups, then divide by your expected volume to get an effective cost per dollar. Interchange-plus or interchange++ pricing (offered by tools like Helcim, Adyen, and Checkout.com) is more transparent than flat-rate, and often cheaper at higher volume, but flat-rate can be simpler and fine for low volume.

Can I accept subscriptions and recurring payments with these tools?

Yes, though the depth varies. Stripe has built-in subscription billing, merchant-of-record tools like Paddle and Lemon Squeezy include it, and GoCardless specializes in recurring bank debit. If you need advanced revenue management, dunning, and churn tools on top of your processor, dedicated billing layers like Chargebee or Recurly are designed for exactly that.

How much does switching payment providers hurt later?

It depends on what you've built up. Moving stored card data, active subscriptions, and customer records can be involved, and some providers make export easier than others. Before committing, ask how you'd migrate saved payment methods and recurring plans, and favor tools that support portability so you're not locked in if your needs change.

Best Payment & POS Software (2026)

Payment and point-of-sale (POS) software is how your business actually gets paid. It covers online checkout, in-person card readers and terminals, recurring billing, and the behind-the-scenes plumbing that moves money from a customer's card or bank account into yours. For most SMBs it also touches sales tax, refunds, chargebacks, and the reports your bookkeeper lives in.

Every business that sells something needs a way to accept payments, but the right tool depends heavily on how you sell. A coffee shop needs hardware and fast tap-to-pay; a SaaS founder needs subscriptions, dunning, and tax handling; a creator selling a digital download just needs a link that works. Picking the 'biggest' brand often means paying for features you'll never use or fighting a system built for a different business model.

To choose well, start with your sales motion (in-person, online one-time, or recurring), then look hard at total cost: the headline processing rate is only part of it once you add monthly fees, hardware, gateway charges, and international markups. Also weigh who carries the compliance and tax burden, how easily it fits your existing stack, and how painful it is to leave if you outgrow it.

Our top Payments & POS picks

Who each pick is actually for

Two facts below, both arithmetic rather than opinion, taken from the review scores in our catalog. Neither is a recommendation, and a high score from a small group of users is a different claim from a high score at scale, so the sample size is shown alongside every figure.

Most reviewed

Shopify Payments

4.4 across 4,976 reviews

The largest sample in the category, which reflects how many merchants meet it as the default inside Shopify rather than through a deliberate comparison.

Highest rated

Square

4.6 across 1,208 reviews, a score it shares with one other tool here and holds on the largest sample

Treat rankings in this category with more caution than most: review counts here track how consumer-facing a product is rather than how good it is, which is why Stripe sits at 4.2 from 457 reviews and Adyen at 3.8 from 36. Developers processing millions do not leave reviews on business software sites.

None of that decides it for you

You take payment across a counter: Square - Hardware, POS software, and processing in one account with no monthly fee. Online-first processors treat in-person as an afterthought.
Payments have to be part of your product: Stripe - The best documented API in the category and the widest set of payment methods, which is why almost every marketplace and SaaS builds on it.
You run a restaurant: Toast - Menus, tables, kitchen display, and tip pooling built into the POS. Generic systems cannot model a check being split at the table.
You sell software worldwide and dread the tax: Paddle - Acts as merchant of record, so it owns VAT and sales tax registration in every jurisdiction instead of you. That is the whole reason to accept the higher rate.
You invoice the same customers every month: GoCardless - Collects by bank debit rather than card, which cuts both the percentage and the involuntary churn from expired cards.
Volume is growing and the rate matters: Helcim - Interchange-plus pricing with automatic volume discounts and no monthly fee, against the flat rate that gets expensive as you scale.

What to look for

Total cost of acceptance, not just the advertised rate: monthly fees, per-transaction pricing, hardware, gateway fees, and cross-border or currency markups add up fast.
Match to your sales motion: in-person retail and restaurants need hardware and offline modes, while online and subscription businesses need hosted checkout, billing, and dunning.
Who owns compliance and tax: a merchant of record handles global sales tax/VAT and liability for you, whereas a raw processor leaves that on your plate.
Integrations with the tools you already run: accounting, CRM, e-commerce platform, and your website builder should connect without custom code.
Payout speed, currency support, and reserves: check when money actually lands, which currencies are supported, and whether funds can be held.
Portability and lock-in: how easy it is to migrate saved cards, subscriptions, and customer data if you switch providers later.

Frequently asked questions

What's the difference between a payment processor and a merchant of record?: A payment processor (like Stripe or Helcim) moves the money, but you remain the seller of record and are responsible for collecting and remitting sales tax or VAT and handling compliance. A merchant of record (like Paddle or Lemon Squeezy) becomes the legal seller, so they take on tax calculation, remittance, and much of the liability in exchange for a higher fee. If global tax compliance is a headache you'd rather outsource, a merchant of record can be worth the premium.
Do I need separate tools for in-person and online payments?: Not necessarily. Platforms like Square and Stripe can handle both in-person and online sales under one account and set of reports, which keeps reconciliation simpler. That said, specialized needs (a busy restaurant, or a subscription SaaS) are often better served by a purpose-built tool even if it means running more than one system.
How do I compare processing costs fairly?: Look past the headline rate. Add up the monthly platform fee, per-transaction pricing, hardware costs, any gateway fees, and international or currency markups, then divide by your expected volume to get an effective cost per dollar. Interchange-plus or interchange++ pricing (offered by tools like Helcim, Adyen, and Checkout.com) is more transparent than flat-rate, and often cheaper at higher volume, but flat-rate can be simpler and fine for low volume.
Can I accept subscriptions and recurring payments with these tools?: Yes, though the depth varies. Stripe has built-in subscription billing, merchant-of-record tools like Paddle and Lemon Squeezy include it, and GoCardless specializes in recurring bank debit. If you need advanced revenue management, dunning, and churn tools on top of your processor, dedicated billing layers like Chargebee or Recurly are designed for exactly that.
How much does switching payment providers hurt later?: It depends on what you've built up. Moving stored card data, active subscriptions, and customer records can be involved, and some providers make export easier than others. Before committing, ask how you'd migrate saved payment methods and recurring plans, and favor tools that support portability so you're not locked in if your needs change.