💸 Getting Paid

Selling directly to customers

If you want to sell directly to customers on your website, you could use a PSP (Payment Service Provider) such as Stripe or PayPal to accept payments. As web developers, that probably seems like an easy option at first.

However, this makes you liable for tax compliance, reporting, and remittance in the customer’s country, payment disputes, refunds, chargebacks, and more. That’s a lot of work and probably not what you want to spend your time worrying about. If you are going this route, you should probably hire an accountant, and use services like Stripe Tax, TaxJar, Avalara and such, to help with the process.

To make selling internationally easier, you need a Merchant of Record service.

Merchants of Record services

A Merchant of Record (MoR) is the entity that sells goods or services to a customer. It can be you, your company, or an external service. These external services sit between you and your customers and act as a proxy for tax remittance, managing payments, subscriptions, and other matters. FastSpring, Paddle, Lemon Squeezy, Gumroad, and Patreon are general-purpose MoRs. Xsolla, Sanlo, and 1D3 are game-specific MoRs. Itch.io has a good comparison between handling payments yourself versus using an MoR service (they support both).

Make sure to compare the fees of each MoR, particularly if you intend to have microtransactions or sell a high volume of low-cost items, as flat fees can quickly add up and eat into your profits.

We can also leverage stores like Steam, the App Store, Google Play, and itch.io to act as merchants of record.

With these platforms, if you are based outside of the US, you will likely have to submit a W-8BEN form, to declare your tax residency. It is usually pretty easy to do directly via the platform’s website.

The following services do not act as MoR: Shopify, Ko-Fi, Buy me a coffee.

Note that MoR services take care of sales taxes, but you are still responsible for paying income taxes in your own country and for having the appropriate legal status to receive payments as a business. If you are a solo developer, you can set up a sole proprietorship, which is typically easier than setting up a corporation.

Disclaimer: The information on this page does not constitute tax or legal advice. You should consult a tax professional for advice on your specific situation.